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

Glencore's South African ferrochrome smelting division announced on Monday that it had cancelled plans to lay off up to 1,500 employees after the country's energy regulatory agency 'approved discounted electricity costs for the sector.

South African smelters face rising electricity costs due to the growing competition of Chinese producers. Only 11 out of 66 smelters in South Africa are still operational.

Glencore's Merafe Resources, which produces ferrochrome, suspended production in its Boshoek smelter, Wonderkop smelter, and Lion smelter, citing viability issues, on May 20, 2025. The joint venture then started job cuts in September.

The government's intervention to lower?power rates by 54%, to 0.62 Rand ($0.0382)/kilowatt-hour has brought relief to smelting firms in distress.

Merafe stated in a statement that the discounted power tariff was "another step towards stabilising the operations and progressing the phasing restart of the business".

Merafe, a ferrochrome manufacturer that negotiated the tariff cut with Samancor Chrome, stated that the discount extended to the entire industry.

South Africa, the world's largest chrome ore producer has lost its top position in the processing of ferrochrome from China, mainly because of high electricity costs. A sharp rise in electricity costs forced dozens of smelting facilities to close.

Electricity is consumed by smelters that combine iron and chromium to make ferrochrome. This is primarily used in the production of steel.

(source: Reuters)