Glencore-Merafe Lion Smelter Restart Highlights South Africa’s Ferro-Chrome Power Challenge

Glencore-Merafe

Glencore-Merafe Lion Smelter restart has brought some relief to South Africa’s ferro-chrome sector. The joint venture restarted production at Lion Smelter in Limpopo on 16 February. It has currently brought back 50pc of the smelter’s operating capacity. As a result, Glencore-Merafe Lion Smelter restart marks an important operational recovery.

This restart matters because Lion is now the venture’s only active smelter. Boshoek and Wonderkop have remained offline since last year’s suspensions. That leaves Lion carrying the near-term production burden. Therefore, Glencore-Merafe Lion Smelter restart is strategically important for the venture’s output profile.

The company expects Lion to reach full operating capacity by 31 March 2026. That target gives the market a clearer recovery timeline. However, the restart does not solve the venture’s deeper structural problem. South Africa ferro-chrome power costs still remain too high for long-term competitiveness.

South Africa Ferro-Chrome Power Costs Still Threaten Sustainability

South Africa ferro-chrome power costs made this restart possible, but only on a temporary basis. The National Energy Regulator approved a 12-month interim tariff of 87.74¢/kwh. That gave Glencore-Merafe enough short-term relief to restart Lion. Consequently, the company could bring some capacity back online.

However, Merafe made its position clear. The venture says it needs a tariff of 62¢/kwh to operate sustainably. That means the current relief does not provide a durable economic solution. Therefore, South Africa ferro-chrome power costs remain the main constraint on the business.

This issue also affects the two idle smelters. Boshoek and Wonderkop both need the same lower tariff to restart. Without that pricing relief, the venture cannot justify bringing them back. Meanwhile, the company faces a deadline to begin consultation on possible retrenchments.

Ferro-Chrome Competitiveness Remains Under Heavy Pressure

Ferro-chrome competitiveness is now the bigger issue behind this restart. Glencore-Merafe’s ferro-chrome production fell 63pc in 2025. High energy costs and weak market conditions drove that decline. As a result, the venture has lost ground in a very competitive global market.

Inner Mongolia producers remain a major challenge. They benefit from lower production costs and stronger power economics. South African smelters cannot compete effectively under the current cost structure. Therefore, Glencore-Merafe Lion Smelter restart is positive, but still fragile.

The company now wants a long-term tariff solution by 28 February. That deadline matters because employment, capacity planning, and future production all depend on it. Without structural energy reform, South Africa’s ferro-chrome sector may keep losing share. Consequently, ferro-chrome competitiveness now depends as much on power policy as on metal markets.

The Metalnomist Commentary

Lion’s restart is encouraging, but it does not change the core reality. South Africa’s ferro-chrome industry still faces a power cost problem that temporary relief cannot fix. If no long-term tariff solution emerges soon, this restart may look more like a pause in the downturn than the start of a real recovery.