Glencore's South African smelter cancels planned job cuts after electricity deal

The logo of commodities trader Glencore is pictured in front of the company's headquarters in Baar, Switzerland, July 18, 2017. Reuters/Arnd Wiegmann

South African smelters are battling electricity costs, which ​have risen tenfold since 2008 amid growing competition from Chinese producers. Only 11 of the country's 66 smelters are still operational.

Glencore's ferrochrome business, Merafe Resources, suspended production at its Boshoek, Wonderkop and Lion smelters in May 2025, citing viability problems. The joint venture then began job cut proceedings the following September.

However, government interventions to reduce power tariffs by 54% to R0.62 ($0.0382) per kilowatt hour have brought relief to distressed smelting companies.

The discounted power tariff approved by the National Energy Regulator of South Africa marked "a further step towards stabilising operations and progressing the phased restart of the business", Merafe said in a statement.

The discount was extended to the entire ferrochrome industry, said Merafe, which negotiated for the tariff cut alongside fellow ferrochrome producer Samancor Chrome.

South Africa, the world's biggest chrome ore producer, has lost its position as the top processor of chrome into ferrochrome to China mainly due to high electricity costs, with a sharp increase in power costs forcing dozens of smelting plants to shut.

Smelters, which combine chromium and iron to produce ferrochrome, mainly used in steel production, consume huge amounts of electricity.