Glencore's South African smelter cancels planned job cuts after electricity deal

June 1 (Reuters) - Glencore's South African ferrochrome ​smelting unit ⁠said on Monday it ​has cancelled plans to lay off as many as 1,500 workers after ​the ‌country's energy regulator approved discounted electricity costs for the sector.

South African ⁠smelters are battling electricity costs which have ⁠risen tenfold since 2008 ​amid growing competition from Chinese producers. Only 11 of the country's 66 smelters are still operational.

Glencore's ferrochrome business Merafe Resources suspended production ​at ‌its Boshoek, Wonderkop and Lion smelters in May 2025, citing viability problems. The joint venture then began job cut proceedings the following September.

However, government interventions to reduce power ​tariffs by 54% to 0.62 rand ($0.0382) per kilowatt hour have ‌brought relief to distressed smelting companies.

The discounted power tariff approved by the National Energy Regulator of ‌South Africa marked "a further step towards stabilising operations and progressing the phased restart of the business", Merafe said in a statement.

The ​discount was extended to the entire ferrochrome industry, said Merafe, which negotiated ‌for the tariff cut alongside fellow ferrochrome producer Samancor Chrome.

South Africa, the world's biggest chrome ore producer, has lost its position ⁠as ⁠the top processor of chrome into ferrochrome ‌to China mainly due to high electricity costs, with a sharp increase in ​power costs ​forcing dozens of smelting plants to shut.

Smelters ‌which combine chromium and iron to produce ferrochrome, mainly used in steel production, consume huge amounts of electricity.

Glencore