On February 27, Eskom, the state-owned electricity utility, offered steeply discounted rates to South Africa’s two largest ferrochrome producers, including Glencore, in an effort to keep the plants operational.
Japie Fullard, CEO of Glencore Ferroalloys, confirmed that company representatives are actively engaging with government officials over the disputed electricity tariff package.
In contrast, Samancor Chrome, another leading ferrochrome producer that received a discounted electricity offer, has indicated it will move forward with its workforce reductions despite ongoing discussions.
South Africa’s mounting electricity challenges
The country’s power sector has struggled for years, plagued by aging infrastructure, frequent outages, and chronic underinvestment.
Rising energy costs, now nearly ten times higher than in 2008, have made running energy-intensive smelters increasingly unprofitable, particularly as Chinese producers offer cheaper alternatives in the global market.
Glencore Ferroalloys CEO Japie Fullard said the current terms are unacceptable. “The conditions, as they stand, unfortunately do not allow me to sign. This means that, if no agreement is reached, we will walk away from the 62-cent deal,” he told delegates at a mining conference in Johannesburg.
In the meantime, Glencore has postponed layoffs at its plant until March 31 to give talks a chance to continue.
If Glencore exits, it would add to a growing list of industrial closures, underscoring how critical electricity pricing and generation reforms are to sustaining local mining operations and safeguarding employment.