Glencore to Idle Two South Africa Smelters on Power Costs
(Bloomberg) -- Glencore Plc’s ferrochrome unit in South Africa will idle two plants and cut jobs because of soaring electricity prices — the latest blow to the country’s declining smelting industry.
The Swiss commodity trader’s joint venture with Merafe Resources Ltd. issued retrenchment notices and voluntary severance packages to employees effective Monday, it said in a statement. The company also announced it will mothball the Boshoek and Wonderkop smelters — where operations were suspended earlier this year — from the start of 2026.
South Africa is the world’s largest producer of chrome ore — a key ingredient in stainless steel — but its processing industry has been hammered in recent years by skyrocketing electricity prices and fierce competition from China, the top ferrochrome supplier.
Glencore-Merafe has held talks with state-owned Eskom Holdings SOC Ltd. about power tariffs, but the utility’s proposal only supports continued operations at the more modern Lion smelter, the joint venture said. That would leave just one of the venture’s five smelting complexes running.
Approval of the notices and severance packages is conditional for one week. “In the absence of a viable solution from the South African government” within that period, they will become binding from Dec. 9, the company said. Glencore-Merafe didn’t say how many jobs may be affected, but it employs nearly 3,000 people in the smelting business.
The country’s other major ferrochrome producer — Samancor Chrome Ltd. — said in late November that it may cut almost 2,500 jobs as it considers closing or scaling down operations because of high energy costs, according to labor union Solidarity, citing the company.
The South African government has acknowledged the pressures on ferrochrome smelters. The cabinet approved a plan in June to support the industry by negotiating revised electricity tariffs and introducing potential controls and taxes on chrome-ore exports. Those reforms have yet to be finalized.
On Monday, lobby groups representing South Africa’s mining and smelting sectors jointly rejected the need for export taxes or restrictions. Instead, they urged the government to prioritize “globally competitive electricity prices as the primary intervention required to restart idled smelters.”
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(Updated with information throughout.)
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