Glencore faces shutdown and 1,500 job cuts amid South Africa power crisis

Glencore’s ferrochrome operations in South Africa are facing uncertainty as negotiations with the government over a discounted electricity package stall, raising concerns about the future of its energy-intensive smelters and the jobs they support.

Japie Fullard, CEO of Glencore Ferroalloys, confirmed that company representatives are actively engaging with officials regarding the disputed electricity tariff package.

“The conditions, as they stand, unfortunately do not allow me to sign. This means that, if no agreement is reached, we will walk away from the 62-cent deal,” he told delegates at a recent mining conference in Johannesburg.

Power Costs Threaten Viability of Smelters

Eskom, South Africa’s state-owned electricity utility, offered steeply discounted rates to Glencore and Samancor Chrome on February 27, aiming to keep the plants operational. Final approval from the National Energy Regulator of South Africa (Nersa) is still pending, and the terms of the deal remain undisclosed.

Fullard stressed that without lower power costs, Glencore’s unprofitable smelters cannot remain viable, putting up to 1,500 jobs at risk. To give talks a chance to succeed, the company has postponed layoffs until March 31. In contrast, Samancor Chrome has indicated it will proceed with workforce reductions despite ongoing discussions.

South Africa’s power sector continues to face serious challenges, with rising energy costs, nearly ten times higher than in 2008, making running smelters increasingly unprofitable. This comes amid competition from cheaper Chinese producers, which has further intensified pressure on local operations.

Of the 66 potential ferrochrome operations in the country, only 11 remain active. If Glencore exits, it will add to a growing list of industrial closures, highlighting the urgent need for electricity pricing and generation reforms to sustain local mining operations and safeguard employment.