02 December 2025 2 min

Electricity Challenges Force Glencore and Merafe to Begin Layoffs as Smelter Operations Face Unsustainable Costs

Written by: BizCommunity Editor Save to Instapaper
Electricity Challenges Force Glencore and Merafe to Begin Layoffs as Smelter Operations Face Unsustainable Costs

South Africa holds approximately 80% of the world's known chrome ore reserves, according to Glencore, positioning the country as a key player in global ferrochrome production.

However, problems with power cuts, rising electricity prices and other pressures forced the companies to suspend production at the venture's Boshoek, Wonderkop and Lion ferrochrome smelters in May.

Merafe said in a statement that after talks with South African power utility Eskom, the proposed new power tariffs presented on November 28 would allow continued operations only at the Lion smelter.

"Regrettably, the proposal does not provide a sustainable solution for the long-term viability of the Boshoek and Wonderkop smelters," Merafe said.

The two smelters will be placed on care and maintenance from 1 January in the absence of an alternative plan, it added.

Formal retrenchment notices and voluntary severance package approvals took effect on 1 December and remain conditional until 8 December, it said.

If no viable solution from the South African government emerges by then, the retrenchments will become binding from 9 December, Merafe said.

South Africa's government agreed in June to examine power tariffs alongside the ferrochrome industry. It approved a proposal for a tax on chrome ore exports as part of efforts to stop the decline of the ferrochrome industry.

Chrome producers and ferrochrome smelters have rejected the proposed export tax, arguing instead for competitive electricity tariffs as the primary intervention required to restart idled smelters.

The Minerals Council South Africa and the Ferro Alloy Producers Association said in a joint statement that electricity tariffs had surged by more than 900% since 2008, making domestic smelters uncompetitive and unprofitable.

"Without an intervention that directly addresses the electricity cost burden, no trade measures, including a chrome ore export tax or quotas, will restore meaningful viability to the country's ferroalloy smelters," they said.

Total Words: 307
Published in Press Articles

Press Release Submitted By

MyPressportal

We submit and automate press releases distribution for a range of clients. Our platform brings in automation to 5 social media platforms with engaging hashtags. Our new platform The Pulse, allows premium PR Agencies to have access to our newsletter subscribers.

Latest from

  1. 2026 SME SA Funding Summit Calls On Tech Startups Seeking Practical Guidance Funding Opportunities And Support
  2. AI Now Powers Sixty Percent Of Global Warehouses Driving Major Shifts In Productivity Resilience And Jobs
  3. Steadying The SA Tourism Ship As Acting CEO Darryl Erasmus Prioritises Stability Growth And Global Competitiveness
  4. Times 3 Technologies Earns Sage Platinum Club Recognition For Driving Innovation And Sustainable Business Growth
  5. Private Equity Emerges As Powerful Driver Of Youth Empowerment And Transformation In South Africa
  6. Waterfall City Park Unveiled As A Leading Outdoor Events Hub Integrating Business Leisure And Culture
  7. Tourism SMMEs Urged To Maximise December Revenue Through Strong Digital Profiles And Memorable Experiences
  8. South African Skills Conference Celebrates National Candour Community Spirit And A Refreshingly Human Tone
  9. Dstv Confirms Loss Of Sixteen Warner Bros Discovery Channels Following Unsuccessful Contract Talks
  10. Landmark Cooperation Agreement Sees SA And Mozambique Expand Joint Efforts In Higher Education And Skills Growth
  11. New PayJustNow Insights Show South Africans Moving To Planned Value Driven Digital Shopping This Black Friday
  12. Lesotho Communications Authority Sanctions Vodacom For Unfair Airtime Practices Following User Complaints
  13. Time Out’s Joy Revolution Launches In South Africa Highlighting Joy As A Critical Brand Strategy For 2026
  14. Whitehouse & Continental Linen Achieves 100 Store Expansion Underscoring Commitment To Local Job Creation
  15. TDMC Unveils Record Black Friday Results Highlighting Strategic Digital Excellence And Consumer Momentum