Chrome miners and the government are engaged in urgent, high-stakes negotiations to prevent the collapse of a deal that would protect thousands of smelter workers from retrenchment.
The deal, which offers Glencore and Samancor a substantial power discount in exchange for keeping its ferrochrome smelters running, is now on a knife’s edge after the miner gave Eskom less than a week to agree to its latest terms.
The power utility has already granted the sector a hefty 54% electricity tariff reduction as part of a broader smelter support package announced in February.
In a statement on Wednesday, however, Glencore said certain conditions in the power utility’s smelter relief package may be “commercially unworkable and unsustainable for ferrochrome producers”.
The group said it submitted a counterproposal to Eskom and the government earlier this month, which remains subject to approval by South Africa’s national energy regulator (Nersa).
If the revised proposal is not submitted to Nersa by March 31, the company will proceed with retrenching 2,500 workers as originally planned.
It said moving the deadline from its original date of February 28 had come at “significant cost” and that all affected workers had been paid in full, even with certain smelting operations having been halted since April 2025.
Glencore’s hardball approach is hardly a surprise, with Glencore Ferroalloys CEO Japie Fullard warning that the company might walk away from talks earlier this month, due to some unfavourable conditions, which are yet to be made public.
Still, Glencore said it will “continue to do everything within its control to avoid” the collapse of the deal.
Levelling the playing field
The ferrochrome sector’s controversial rescue package came after more than a year of threats by the chrome industry, which blames uncompetitive power costs for its shrinking market share.
The discount aims to revitalise South Africa’s ferrochrome smelting sector by levelling the playing field with China.
By keeping smelters online, it would also protect Eskom’s bottom line, given that Glencore and Samancor, the other chrome smelting giant in line for relief, are major customers of its power.
By extending the offer of affordable power across the sector, many more mothballed smelters could restart operations in the coming years, in a revival that energy minister Kgosientsho Ramokgopa says would add nearly R18bn to Eskom’s bottom line and R76bn to the country’s export earnings.
But the cost of power is a widespread criticism, extending far beyond ferrochrome smelting, and Glencore’s substantial discount could cause many distressed consumers to demand similar relief, raising questions about funding the package without raising the cost for households or small businesses.
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