South Africa-based ferrochrome producer Merafe Resources has confirmed that high electricity costs are forcing the Glencore-Merafe Chrome Venture to begin layoffs and prepare for partial shutdowns.
Following consultations with South African electricity company Eskom, the venture concluded that the proposed electricity-tariff structure would allow only the Lion smelter to continue operating, leaving the Boshoek and Wonderkop smelters without a sustainable path forward. As a result, the venture has issued conditional retrenchment notices and voluntary severance package (VSP) approvals, effective December 1, 2025, with decisions becoming final on December 8 if no government intervention emerges. If unresolved, formal retrenchments take effect on December 9, and the Boshoek and Wonderkop units will be placed on care and maintenance from January 1, 2026.
Merafe stressed that it will continue engaging with stakeholders to preserve operational sustainability wherever possible.
Smelters uncompetitive after electricity price increase
Mining industry employers’ organization Minerals South Africa stated that the ferroalloy industry urgently requires globally competitive electricity prices to restore viability. Over the past 17 years, South African electricity tariffs have risen more than 900 percent, rendering domestic smelting operations uncompetitive against international producers. According to the industry association, no measure other than substantially reducing power costs will restart idled smelters.
Smelter operators are exploring renewable-energy procurement as a longer-term solution. Although this transition will take time, it is expected to reduce reliance on Eskom, improve cost competitiveness and minimize exposure to upcoming Carbon Border Adjustment Mechanism (CBAM) penalties on carbon-intensive exports.