Glencore Merafe Chrome Venture responds to NUMSA on potential retrenchments
Producer says current Eskom tariff conditions threaten long term viability amid ongoing negotiations to stave off job losses
South Africa’s ferrochrome sector has been facing deepening pressure over electricity costs, labour unrest and possible retrenchments, and the Glencore Merafe Chrome Venture has issued a formal response to the National Union of Metal Workers of South Africa after the union warned that job losses could occur if industry saving tariff solutions fall short.
Backstory: Tariff Talks and Industry Strain
Electricity, supplied almost exclusively by Eskom, is the biggest cost driver for ferrochrome smelters. Under current pricing, operations have become uncompetitive compared with global rivals, leading many smelters to cut production or halt operations entirely.
Only a fraction of South Africa’s ferrochrome smelter capacity remains active, partly due to high power costs and fierce overseas competition.
In February 2026, Eskom and government officials announced a proposed discounted tariff of about 62 c/kWh for key ferrochrome producers, intended to keep smelters open and preserve employment. However, the discounted tariff is subject to approval by the National Energy Regulator of South Africa and dependent on detailed contractual terms that have not yet been finalised.
Unions such as NUMSA have been vocally calling for a competitive tariff that can sustain local smelter production and prevent widespread job losses. Part of NUMSA’s broader critique has been that without relief on electricity pricing, continued retrenchments across ferrochrome and other metal smelting industries are likely.
Glencore Merafe’s Response
In its statement, the Glencore Merafe Chrome Venture acknowledged NUMSA’s engagement and Government’s involvement in tariff discussions.
However, the company said it remains in urgent negotiations with Eskom and government on the detailed terms and conditions associated with the proposed tariff solution, which must ultimately be approved by NERSA before it can take effect.
The Venture said a careful review of the tariff conditions showed many would leave its operations commercially unworkable and unsustainable in the long term, making current terms unsuitable for reopening smelters on a competitive basis.
As a result, the company submitted a final counterproposal on 12 March 2026 to ensure terms that support stable, long term production. If approved internally, those revised terms will be submitted to NERSA for final regulatory approval.
While smelter operations have been suspended since April 2025, the Venture noted it has continued to pay affected employees in full to date in efforts to soften the impact on workers and their families.
The company made clear that unless commercially viable tariff terms are agreed and submitted in time, it may have no choice but to proceed with Section 189 retrenchments, a last resort it says it will continue to avoid if possible.
