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.

Bushveld Mineral

South African Output Cuts to Boost China's Vanadium-Nitrogen Exports

Rising Exports Driven by Lower South African Production and Strong US Demand

China’s vanadium-nitrogen exports are expected to see significant growth in 2025, primarily due to output cuts from a major South African producer, increasing demand from the US, and strong export interest from Chinese producers. Market participants anticipate a boost in global vanadium-nitrogen trade, benefiting China’s export numbers.

Impact of South African Output Cuts on Global Vanadium-Nitrogen Supply

South African vanadium-nitrogen production has been notably impacted by ongoing equipment maintenance at Bushveld Minerals Vametco plant. From mid-December to March 2025, the plant will operate at reduced capacity due to a cash shortage. In 2024, Bushveld’s production fell by 19%, amounting to 1,387 tonnes. This reduction in South African output is expected to continue in 2025, with the producer operating at low run rates due to negative profit margins. Consequently, China is positioned to capitalize on these cuts by increasing its exports.

Global vanadium-nitrogen alloy production is heavily concentrated in China and South Africa, with other countries lacking the necessary technology due to intellectual property restrictions. While European and US steel mills often prefer using ferro-vanadium (80% grade) over vanadium-nitrogen, China’s export increase in vanadium-nitrogen reflects changing dynamics in the alloy market.

Surge in China’s Vanadium-Nitrogen Exports and US Market Demand

China’s vanadium-nitrogen exports more than doubled in 2024, reaching 2,523 tonnes, up from 945 tonnes in 2023. This growth can be attributed to South Africa’s lower output and China’s expanded export activities. Notably, in December 2024, China’s vanadium-nitrogen exports surged five-fold to 377 tonnes, compared to just 67 tonnes a year earlier.

The US was the largest buyer of Chinese vanadium-nitrogen in 2024, importing 892 tonnes, more than double the 335 tonnes purchased in 2023. Canada also saw a dramatic increase in imports, with 323 tonnes imported, a more than five-fold rise from 60 tonnes in 2023. India’s demand also increased by 69%, reaching 317 tonnes in 2024. The US demand for vanadium-nitrogen is expected to continue to rise, as the US government, under President Trump, has pledged to boost domestic construction activities, which will likely increase the demand for steel alloys.

Export Prices and Market Dynamics

Chinese export prices for vanadium-nitrogen are currently in the range of $20.30 to $21 per kilogram, lower than European prices of $23.80 to $24.20 per kilogram. Chinese smelters are more inclined to sell to overseas markets to address domestic oversupply issues. In 2024, China produced 41,500 tonnes of vanadium-nitrogen, surpassing domestic steel mills' consumption of 34,800 tonnes. However, some alloy smelters reduced production from 2023 levels due to negative profit margins and weaker steel demand.

Merafe to close two South Africa ferro-chrome smelters after tariff talks stall

Merafe Resources

Merafe to close two South Africa ferro-chrome smelters after talks with the government failed to deliver relief. Merafe Resources will place the Wonderkop and Boshoek smelters on care and maintenance. Merafe to close two South Africa ferro-chrome smelters because power costs and weak demand crushed competitiveness. Therefore, the decision raises fresh concerns about jobs and industrial capacity.

Glencore runs the assets through a joint venture with Merafe. The venture suspended operations at Wonderkop and Boshoek in May after a February competitiveness review. Meanwhile, low ferro-chrome prices and soft demand reduced margins. As a result, high electricity tariffs became the dominant constraint.

Electricity tariff disputes drive shutdown risk and potential job cuts

South Africa introduced a tariff realignment programme in October 2024. Cyril Ramaphosa announced the programme to ease pressure on industrial users. However, Merafe said tariff talks produced no agreement on its most urgent need. Therefore, Merafe to close two South Africa ferro-chrome smelters while it continues discussions.

The venture warned that job cuts could follow within weeks. It expects further government feedback but needs immediate clarity. Meanwhile, labour outcomes will depend on whether tariffs change quickly. As a result, the smelter closure timeline is now a political and economic flashpoint.

ferro-chrome

Chinese competition and weak European steel demand squeeze ferro-chrome margins

Merafe cited a structural squeeze across the value chain. Cheap Chinese ferro-chrome and high local power costs undermine South African production. Meanwhile, weak demand from the European steel industry reduces pricing support. Therefore, profitability has deteriorated across multiple plants.

The company produced 110,000 tonnes of ferro-chrome in the third quarter. That output fell 51% year on year. The new shutdowns follow earlier closures at Lydenburg in 2020 and Rustenburg in 2024. As a result, Merafe to close two South Africa ferro-chrome smelters as part of a multi-year contraction.

The 720,000 t/yr Lion smelter will remain the only operational plant owned by the venture. Operations at Lion paused in June for scheduled maintenance. It is expected to restart, but the venture has not confirmed the restart date. Therefore, near-term supply will hinge on Lion’s restart timing and power cost stability.

The Metalnomist Commentary

Ferro-chrome smelters live or die on electricity pricing and uptime. Meanwhile, repeated closures risk eroding skills and maintenance integrity across the fleet. Therefore, South Africa must align tariff policy with export competitiveness or accept further capacity loss.

ARM Nkomati Nickel Mine Restart Moves Closer With Boliden Concentrate Deal

African Rainbow Minerals

ARM Nkomati nickel mine restart prospects have strengthened after African Rainbow Minerals signed a multi-year nickel concentrate sales agreement with Swedish mining and smelting group Boliden. The agreement could support the return of one of South Africa’s important multi-metal nickel assets.

The ARM Nkomati nickel mine has been on care and maintenance since 2020. ARM and Norilsk Nickel placed the operation into suspension after profitability weakened because of lower output.

The ARM Nkomati nickel mine produced nickel, copper, cobalt, chrome and platinum group metals. Its potential restart would therefore add more than nickel units to the market, supporting several metals linked to batteries, stainless steel, alloys and industrial supply chains.

The deal with Boliden remains conditional. It depends on approval to recommence open-pit mining of nickel-bearing ore at Nkomati, responsible sourcing due diligence by Boliden and other regulatory clearances.

Boliden Agreement Gives Nkomati a Processing Route

The sales agreement gives ARM a potential outlet for Nkomati nickel concentrate if mining restarts. Boliden expects the concentrate to be shipped to its Harjavalta smelter in Finland.

Harjavalta produces nickel matte, making it a logical destination for nickel-bearing concentrate. The route would connect South African mine supply with European smelting capacity.

This matters because nickel concentrate needs secure processing access before a restart can become commercially meaningful. A mine can have geological potential, but it still needs offtake, logistics, smelting capacity and customer qualification.

Boliden’s responsible sourcing due diligence is also important. European smelters and customers increasingly require stronger documentation around mine origin, ESG standards and supply-chain integrity.

The agreement therefore does more than provide a buyer. It gives the Nkomati restart a possible downstream pathway into a European refining and smelting system.

For ARM, the deal could improve the commercial case for reopening the mine. For Boliden, it could provide another concentrate source for its nickel operations at a time when secure non-Indonesian nickel supply remains strategically relevant.

South African Nickel Supply Could Regain Strategic Relevance

Nkomati’s ownership structure has changed since the mine entered care and maintenance. Nornickel’s South African subsidiary agreed in November 2023 to transfer its 50% stake to ARM, and the transaction was finalised in July 2025.

Full ARM control gives the South African company more direct strategic flexibility. It can evaluate restart options without the same joint-venture complexity that previously shaped the asset.

The potential restart comes at a time when nickel markets remain divided. Indonesia dominates new supply growth, but European and western buyers are increasingly interested in diversified, traceable and geopolitically balanced feedstock.

Nkomati’s multi-metal profile adds to its relevance. Nickel remains important for stainless steel, batteries and superalloys. Cobalt supports batteries and high-performance alloys. Platinum group metals serve automotive catalysts, hydrogen technologies and industrial applications.

However, restart economics will be the decisive issue. The mine was suspended because lower output weakened profitability. Any recommencement will need a stronger operating plan, stable grades, reliable processing economics and clear market support.

The Boliden agreement is an important step, but not the final decision. The project still needs operational approval, regulatory clearance and successful due diligence before concentrate flows can resume.

The Metalnomist Commentary

The ARM-Boliden agreement shows that idled nickel assets can regain value when buyers prioritise diversified and traceable supply. Nkomati’s restart will depend less on headline nickel prices alone and more on whether ARM can rebuild a reliable mine-to-smelter route.

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.

Hillside Aluminium Smelter Future Hinges on South32 Eskom Power Deal

Hillside Aluminium

Hillside aluminium smelter operations beyond 2031 will depend on a new long-term power agreement between South32 and South African utility Eskom. The companies are negotiating a replacement contract for the KwaZulu-Natal smelter before its current discounted electricity supply arrangement expires.

The Hillside aluminium smelter is one of South Africa’s most important energy-intensive industrial assets. Securing competitively priced power is essential because aluminium smelting depends on stable, large-scale and affordable electricity.

South32 and Eskom have created a working group to explore ways to bring competitively priced renewable energy into South Africa’s national grid. The goal is to support Hillside’s future power needs while also benefiting Eskom’s wider customer base.

The talks come shortly after South32 moved its Mozal aluminium smelter in Mozambique into care and maintenance after failing to secure a new electricity supply agreement. That decision highlights the strategic risk facing smelters when power contracts expire without a commercially viable replacement.

Power Security Becomes the Main Aluminium Constraint

Electricity is the defining cost factor for primary aluminium. Smelters need continuous power, and even modest changes in tariffs can determine whether production remains competitive.

The Hillside aluminium smelter currently benefits from a discounted power contract that runs until 2031. A new agreement would secure the plant’s operating future beyond that date and reduce uncertainty for workers, suppliers and downstream customers.

South32’s experience at Mozal shows what is at stake. The Mozambican smelter was moved into care and maintenance after its electricity contract expired at the end of March and no new agreement was reached.

That outcome gives urgency to the Hillside negotiations. Without a competitive long-term power solution, South32 could face difficult decisions about one of its key southern African aluminium assets.

For Eskom, the talks also carry wider industrial policy significance. South Africa needs to preserve energy-intensive manufacturing while managing grid constraints, decarbonisation pressure and the transition toward cleaner power.

Renewable Power Could Support Low-Carbon Aluminium

The working group’s focus on renewable energy shows how aluminium supply is becoming tied to decarbonisation. Buyers increasingly want lower-carbon aluminium, especially in automotive, packaging, construction and industrial applications.

A renewable-linked power solution could improve Hillside’s long-term competitiveness. It would help South32 reduce emissions exposure while keeping the smelter connected to South Africa’s industrial base.

However, the challenge is execution. Renewable power must be competitively priced, reliable and integrated into the national grid in a way that supports continuous smelter operations.

The agreement could also set a precedent for other energy-intensive industries in South Africa. If Eskom and South32 can structure a viable low-carbon power model, it may help attract or retain industrial investment in metals, chemicals and manufacturing.

For the aluminium market, the message is clear. Future smelting capacity will depend less on ore or alumina access alone and more on long-term power security, grid reliability and carbon intensity.

The Metalnomist Commentary

The Hillside power talks show that aluminium competitiveness is now an energy strategy question. South32 and Eskom must prove that South Africa can keep heavy industry alive while moving toward lower-carbon electricity.

Merafe Temporarily Suspends Lion Ferro-Chrome Smelter

Merafe Resources

Maintenance Shutdown Amid Weak Market Conditions

Merafe Resources has suspended operations at its Lion ferro-chrome smelter in South Africa for scheduled maintenance and planned rebuilds. The facility has a nameplate capacity of 720,000 metric tonnes per year, making it one of the largest in the region. The temporary suspension underscores both operational requirements and broader market headwinds affecting the ferro-chrome sector.

The company, which operates the smelter as part of a joint venture with Switzerland-based Glencore, has already halted production at its Boshoek and Wonderkop smelters earlier this year. Boshoek was idled on 1 May, followed by Wonderkop on 31 May, both due to difficult market conditions and weaker demand.

South African Ferro-Chrome Industry Under Pressure

The joint venture’s ongoing capacity reductions reflect sustained challenges across the South African ferro-chrome industry. The Lydenburg smelter was permanently closed in 2020, while the Rustenburg smelter was placed under care and maintenance in 2024. These moves highlight the structural oversupply, rising energy costs, and weaker stainless steel demand weighing on the ferro-chrome market.

As a result, producers face mounting pressure to balance production efficiency with profitability. Maintenance schedules, cost discipline, and potential future restarts will likely depend on global ferro-chrome price recovery and improvements in stainless steel demand, particularly from China.

The Metalnomist Commentary

Merafe’s latest suspension highlights the fragility of South Africa’s ferro-chrome industry, where high energy costs and market volatility remain persistent risks. With multiple smelters idled or closed, supply-side discipline may support future price stabilization, but global demand recovery will be essential for sustainable operations.

Implats PGM Production 2025 Down Despite Sales Growth and Minor Metal Support

Implats PGM

Implats PGM production 2025 fell 5% year-on-year to 2.60 million ounces in the nine months ending 31 March, according to the group's latest update. The drop reflects planned maintenance at the company’s South African smelters, which impacted output volumes across its platinum group metal operations.

Output Drops Across Group and Joint Ventures

Impala Platinum (Implats) reported a 5% decline in 6E PGM production—platinum, palladium, rhodium, ruthenium, iridium, and gold—over the reporting period. Joint venture production also fell by 2% to 403,000 ounces. The company attributed the overall production decline to essential smelter maintenance in South Africa, which was scheduled to sustain long-term asset reliability.

Despite the output constraints, Implats managed to slightly increase 6E PGM sales volumes by 1% to 2.55 million ounces. CEO Nico Muller noted that the group experienced additional spot demand beyond its contractual obligations, highlighting a degree of resilience in market appetite.

Minor PGMs See Pricing Support, but Margins Stay Tight

Implats emphasized that pricing support for minor PGMs—such as iridium and ruthenium—was a key market feature this quarter. While overall PGM prices have modestly rebounded from earlier lows, the group continues to face compressed margins due to elevated costs and a fragile macroeconomic environment.

The company is closely monitoring pricing trends and cost structures as it navigates supply pressures, inflationary impacts, and global economic volatility. Physical tightness in specific PGM sub-segments is helping to stabilize demand, though not yet enough to drive a significant margin recovery.

The Metalnomist Commentary

The decline in Implats PGM production 2025 underscores the operational challenges tied to infrastructure maintenance and market volatility. However, firm spot demand and minor PGM tightness offer glimmers of support in an otherwise pressured pricing landscape.

Tharisa underground chrome and PGM project extends Bushveld mine life

Tharisa

Tharisa underground chrome and PGM project plans mark a major shift in its South African operations. The Tharisa underground chrome and PGM project will replace the existing open pit mine as it depletes, securing long-term output from the Bushveld complex. This strategic move aims to stabilise chrome and PGM supply while leveraging stronger platinum prices and future demand growth.

Long-life strategy for Bushveld chrome and PGM supply

Tharisa will invest $547mn over the next decade to develop the underground complexes, Apollo and Orion. These underground units will enter first production in 2031, as the open pit approaches depletion. The Tharisa underground chrome and PGM project is designed to match and then exceed the current 5.6mn t/yr ore mining capacity.

As a result, Tharisa expects to maintain existing chrome and PGM concentrate output levels and create room for expansion. The underground expansion will extend the life of the overall operation by more than 50 years. This life extension is critical for downstream smelters, refiners and automotive PGM users planning long-term contracts.

Recent production trends highlight why the transition matters. PGM output fell by 6.5pc year on year in April–June, with chrome concentrate down by 3.9pc. However, quarter-on-quarter volumes recovered, with PGMs up 6.2pc and chrome concentrate up 3.9pc from January–March. The Tharisa underground chrome and PGM project therefore seeks to smooth volatility and anchor a more predictable supply profile.

Platinum price strength supports underground investment case

Platinum prices have recently surged to their highest level in 11 years. Benchmark assessments put platinum around $1,592/troy oz, with palladium at $1,285/troy oz. This price environment strengthens the economic rationale for deep, capital-intensive underground development.

Therefore, the Tharisa underground chrome and PGM project benefits from supportive revenue expectations, even as near-term production dips. Underground operations typically deliver higher resource recovery and better grade control than mature open pits. Over time, this can offset higher operating and capital costs.

Meanwhile, chrome concentrate remains a key revenue pillar for Tharisa, tied to stainless steel and alloy demand. The combined chrome and PGM basket from the Tharisa underground chrome and PGM project will help diversify risk across stainless, auto catalyst and emerging hydrogen-related applications. For global buyers, this project adds another long-dated node of supply in a market wary of concentration risk.

The Metalnomist Commentary

Tharisa’s move underground signals confidence in long-run PGM and chrome fundamentals despite short-term market noise. For downstream users, the key questions will be project execution, cost control and how this new supply interacts with other Bushveld and global expansions. If delivered on schedule, the project should reinforce South Africa’s role at the core of the PGM and chrome value chain well into the second half of this century.

Global Aluminium Output Slightly Rises in August Amid Production Slowdown in China

Global Aluminium

Global aluminium output in August saw a modest rise compared to the same period last year but dipped from the record production levels reached in July, as growth in China, the world’s largest producer, stalled. According to data from the International Aluminium Institute, global production reached 6.18 million tonnes, marking a 1.2% year-on-year increase. Daily production rates averaged 199,300 tonnes, slightly lower than July’s revised figure of 199,500 tonnes.

China's Aluminium Output Stalls

China produced 3.69 million tonnes of aluminium in August, reflecting a 1.32% rise compared to the same month last year, but remained unchanged from July. Earlier in the summer, China had ramped up production due to new projects coming online in Inner Mongolia during the second quarter. Strong aluminium prices in China further incentivized existing smelters to maximize output for better profitability. However, growth plateaued in August as existing capacity reached its limits.

In other regions, aluminium production largely mirrored this trend, with slight year-on-year increases but flat growth compared to the previous month. North America produced 334,000 tonnes, a 0.3% increase from last year but down slightly from July. Western Europe saw a 5.65% year-on-year rise to 243,000 tonnes, while Asia, excluding China, produced 408,000 tonnes, showing a 3.03% rise. South American production rose by 4% to 130,000 tonnes.

The Middle East edged up 0.57% to 530,000 tonnes, while Russia and Eastern Europe increased production by 4.73% to 354,000 tonnes. In contrast, Australasia saw a decline of 3.75% to 154,000 tonnes, and African output remained steady at 135,000 tonnes.