Thousands of jobs on the line as closure of Glencore Merafe smelters looms

South Africa's ferrochrome processing industry is under growing threat due to the high and increasing cost of electricity.

Merafe Resources announced on Tuesday that its Boshoek and Wonderkop smelters in the North West province will be 'placed on care and maintenance' from 1 January 2026.

The Glencore-Merafe Chrome Venture has issued formal retrenchment notices and approvals of voluntary severance packages (VSPs) with effect from 1 December 2025, the company said in a Sens update.

RELATED: Major miner to meet Electricity Minister as rising power prices threaten ferrochrome industry

This follows its consultations with power utility Eskom, where a proposal regarding electricity tariffs was presented on 28 November.

While the proposal remains subject to further approval processes, it says, the Venture's analysis shows that it supports only the continued operation of the Lion smelter in Limpopo Province.

The irony is that these kinds of smelters make up some of Eskom's biggest, paying customers, says Professor Sampson Mamphweli from the South African National Energy Development Institute (Sanedi).

"The price of electricity has gone up by more than 900% between 2008 and now, and the smelters use a lot of electricity - an average of about four Megawatt hours per tonne of the metal that's produced."

In view of this cost, competing globally is the biggest challenge.

Prof. Mamphweli highlights how rival China has offered their smelters at a low electricity rate to encourage companies to process the metal domestically to create jobs.

"Eskom's other big customers are municipalities that owe them close to R100 billion, so they can't afford to let the smelters close down at this rate. If you look at the economics of scale, Eskom should be able to offer the smelters slightly lower tariffs because their volumes are quite high AND they are paying customers."

To hear more detail, scroll back up to the audio player