PRETORIA, Jan 30 – South Africa’s energy regulator has approved a temporary electricity tariff reduction for two ferrochrome producers, granting relief to smelters facing sustained pressure from high power costs that have led to closures and job losses across the sector.
The National Energy Regulator of South Africa approved Eskom’s request to cut electricity tariffs by 35 percent for Samancor Chrome and a joint venture between Glencore and Merafe Resources. The decision aims to prevent further shutdowns at energy intensive smelters that have struggled to remain viable amid rising operating costs.
More than a dozen ferrochrome smelters have closed in South Africa in recent years, resulting in thousands of job losses. Electricity prices have risen by more than 900 percent since 2008, according to industry data, placing pressure on local processors and weakening the country’s competitiveness.
Eskom applied for the tariff reduction in December after Samancor Chrome and the Glencore Merafe joint venture began steps to shut down operations and lay off workers. Both companies cited high electricity costs as a key factor undermining profitability.
The reduced tariff will apply for 12 months starting in January 2026. Under the arrangement, the two firms will pay 87.74 South African cents per kilowatt hour, compared with the current tariff of 1.36 rand per kilowatt hour, with the government will fund the difference.
Majola said the cost of the shortfall would not be passed on to standard electricity customers. He added that the relief is intended to stabilise operations and protect jobs while broader challenges in the power and mining sectors persist.
South Africa is the world’s largest producer of chrome ore but has lost its position as the leading processor of chrome into ferrochrome to China. Industry participants attribute the shift largely to electricity costs, which have made local smelting less competitive.
The regulator’s decision highlights ongoing efforts to support energy intensive industries while balancing costs within the power system.
