June 1 (Reuters) – Glencore's South African ferrochrome smelting unit said on Monday it had canceled plans to lay off more than 1,500 workers after the country's energy regulator approved subsidized power costs for the sector.
South African smelters are struggling with electricity costs that have increased tenfold since 2008 amid increasing competition from Chinese producers. Of the country's 66 smelters, only 11 are still operational.
Glencore's ferrochrome business Merafe Resources suspended production at its Bostock, Wonderkop and Lion smelters in May 2025, citing feasibility problems. The joint venture then began job reduction proceedings the following September.
However, government intervention to reduce electricity tariffs by 54% to 0.62 rand ($0.0382) per kilowatt hour has brought relief to beleaguered smelters.
The concessional electricity tariff approved by South Africa's national energy regulator is “another step towards stabilizing operations and progressing the phased restart of the business”, Merafe said in a statement.
The exemption was extended to the entire ferrochrome industry, said Merafe, who had negotiated the tariff reduction with fellow ferrochrome maker Samancor Chrome.
South Africa, the world's largest chrome ore producer, has lost its position as the top processor of chrome in ferrochrome to China mainly due to high electricity costs, with dozens of smelting plants forced to close due to a sharp rise in electricity costs.
Smelters that combine chromium and iron to produce ferrochrome, which is used primarily in steel production, consume huge amounts of electricity.