Eskom says regulator approves discounted power tariff for ferrochrome smelters
2026-06-01 11:34:37 [Print]
South African utility Eskom announced on Friday that energy 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 to Reuters that the tariff has been set at 0.62 rand ($0.0383) per kilowatt-hour.
Eskom applied for regulatory approval for the discounted tariff last month, and a public hearing was held earlier this week.
The durations of the agreements vary, Eskom said, with a five-year term for Samancor Chrome and a three-year term for the Glencore-Merafe venture.
South Africa, the world's largest producer of chrome ore, has lost its position as the top processor of chrome into ferrochrome to China, largely due to high electricity costs. Since 2008, power costs for smelters have increased roughly tenfold, forcing dozens of plants to shut down.
Eskom said the framework requires no additional government fiscal support and includes an equitable upside-sharing arrangement linked to market performance.
These energy-intensive smelters combine chromium and iron to produce ferrochrome, which is primarily used in steel manufacturing.
A Nersa spokesperson confirmed to Reuters that the tariff has been set at 0.62 rand ($0.0383) per kilowatt-hour.
Eskom applied for regulatory approval for the discounted tariff last month, and a public hearing was held earlier this week.
The durations of the agreements vary, Eskom said, with a five-year term for Samancor Chrome and a three-year term for the Glencore-Merafe venture.
South Africa, the world's largest producer of chrome ore, has lost its position as the top processor of chrome into ferrochrome to China, largely due to high electricity costs. Since 2008, power costs for smelters have increased roughly tenfold, forcing dozens of plants to shut down.
Eskom said the framework requires no additional government fiscal support and includes an equitable upside-sharing arrangement linked to market performance.
These energy-intensive smelters combine chromium and iron to produce ferrochrome, which is primarily used in steel manufacturing.
Ferro-chrome Cr 60%min, C 0.1%max IW Rotterdam
Unit:USD/lb Cr
China low carbon ferrochrome producers' number MoM output increase statistics by province by month
Unit: pcs
