- Utility cuts power tariffs by more than half since January
- Move meant to avert thousands of job losses
- South African smelters losing out to Chinese competitors
- Only 17% of smelters currently operational
Feb 27 (Reuters) - South Africa's power utility Eskom on Friday announced a further 29% reduction in electricity prices for two distressed ferrochrome firms in a bid to avert thousands of job losses.
Samancor Chrome and Glencore's joint venture with Merafe Resources will now pay 62 South African cents per kilowatt-hour under the new tariff regime, down from an interim tariff of 87.74 cents per kilowatt-hour approved by South Africa's energy regulator in January.
The smelters were paying 1.36 rand ($0.0851) per kilowatt-hour at the end of 2025.
South Africa's smelting sector has been hit by electricity costs that have risen more than 900% since 2008, forcing dozens of plants to shut.
Electricity Minister Kgosientsho Ramokgopa said initial relief would target two smelters that had begun retrenchment processes, adding the government was considering broader tariff support for the sector.
Only 11 of a possible 66 smelters are operating, mainly due to high power costs, he told a media briefing.
"As a result of this intervention, we expect that by December of this year, we're going to have 45 smelters operating and by December 2027, we will have 49 smelters operating. So this is significant," Ramokgopa added.
Merafe Resources, which jointly owns three smelters with Glencore, said on February 18 it had resumed operations at one of the three smelters it shut down in May 2025 after the January 2026 power tariff reduction.
The other two smelters would require a lower tariff of 62 cents per kilowatt hour, the company said.
South Africa, the world's biggest chrome ore producer, has lost its position as the world's top processor of chrome into ferrochrome to China mainly due to high electricity costs.
Energy-intensive smelters combine chromium and iron to produce ferrochrome, which is mainly used in steel production.
($1 = 15.9750 rand)
Reporting by Nelson Banya; Editing by Alexander Winning and Nivedita Bhattacharjee
Source: Reuters