S.Africa's Eskom says regulator approves discounted power tariff for ferrochrome smelters

JOHANNESBURG, May 29 (Reuters) - South African ​utility Eskom ⁠on Friday said regulator ​Nersa has approved an interim discounted power tariff for struggling ferrochrome ​producers Samancor ‌Chrome and a joint venture between Glencore and ⁠Merafe Resources.

* A Nersa spokesperson confirmed the ⁠tariff at 0.62 rand ($0.0383) ​per kilowatt-hour to Reuters.

* Eskom last month applied for regulatory approval for the discounted tariff, with a public ​hearing ‌held earlier this week.

* Agreement durations differ, Eskom said, with a five-year term for Samancor Chrome and three years for the Glencore-Merafe venture.

* 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 smelters hit by a roughly tenfold increase in power costs since 2008 that has ​forced dozens of plants to shut.

* Eskom said the framework ‌requires no additional government fiscal support and includes an equitable upside-sharing arrangement linked to market performance.

* "The framework is structured ⁠within a ⁠regulated environment, includes appropriate risk-sharing mechanisms ‌and does not place additional financial obligations on standard tariff customers or ​taxpayers," chief ​executive Dan Marokane said.

* Energy-intensive smelters combine ‌chromium and iron to produce ferrochrome, which is mainly used in steel production.

Glencore