Glencore-Merafe Ferro-Chrome Retrenchments Delayed as Energy Talks Continue

Merafe

Glencore-Merafe ferro-chrome retrenchments were delayed until 9 April as the joint venture continued discussions with Eskom and the South African government over energy pricing. The extension gives South Africa’s ferro-chrome sector another brief window to seek relief from high power costs.

The Glencore-Merafe ferro-chrome retrenchments had already been extended from 31 March before the latest delay. Merafe Resources, the junior partner in the joint venture with Glencore, said the new extension came at Eskom’s request.

The decision highlights the severe pressure on South African ferro-chrome smelters. Low ferro-chrome prices, high electricity costs and competition from lower-cost Chinese producers have made domestic smelting increasingly difficult to sustain.

Energy Costs Continue to Undermine Ferro-Chrome Smelting

South African ferro-chrome producers are struggling because smelting is highly power-intensive. Even after energy regulator Nersa approved a lower Eskom tariff, producers still viewed the relief as insufficient to restore competitiveness.

The tariff reduction was designed to support South Africa’s beneficiation sector, which converts chrome ore into higher-value ferro-chrome. However, the market signal remains weak because selling chrome ore has become more profitable than smelting it domestically.

This is a major industrial policy problem. South Africa holds major chrome resources, but high power costs are pushing the value chain away from local processing and toward raw material exports.

China Competition Deepens Pressure on South African Beneficiation

The Glencore-Merafe ferro-chrome retrenchments reflect a wider structural challenge in the global ferro-chrome market. Chinese producers continue to benefit from lower-cost processing conditions, while South African smelters face expensive electricity and weaker margins.

South African ferro-chrome production dropped sharply in 2025 as low prices and high energy costs forced capacity reductions. Samancor, the country’s other major ferro-chrome producer, has already proceeded with retrenchments despite the lower tariff.

The extended deadline does not remove the underlying risk. Unless energy pricing becomes more competitive, South Africa may continue losing ferro-chrome smelting capacity, weakening domestic beneficiation and reducing industrial value capture from its chrome ore base.

The Metalnomist Commentary

The Glencore-Merafe delay shows that South Africa’s ferro-chrome crisis is now an electricity competitiveness crisis. Without a durable power solution, the country risks exporting more chrome ore while losing the smelting capacity that once anchored its beneficiation strategy.