South Africa’s energy utility, Eskom, has signed a landmark deal with major ferrochrome producers Samancor and Glencore-Merafe, aiming to stabilize the sector and protect thousands of jobs threatened by rising electricity costs and global market pressures. The agreement comes as smelters across the country have faced severe operational challenges, leading to partial shutdowns and retrenchment processes that have jeopardized employment in key industrial regions.
This Eskom Deal represents a coordinated effort between the utility, the government, and industry leaders to ensure the long-term sustainability of South Africa’s ferrochrome sector, which is critical to both industrial growth and export revenues.
Under the MoU, Eskom, Samancor, and Glencore-Merafe will form a multi-stakeholder task team to develop sustainable solutions for the energy-intensive ferrochrome industry. The agreement includes:
Eskom leadership emphasized that the intervention is designed to avoid passing additional costs onto regular electricity customers, ensuring household and small business users are not impacted.
The ferrochrome sector is a major employer in several South African provinces, and shutdowns have already threatened thousands of positions. Analysts estimate that more than 5,000 jobs were at risk before the Eskom Deal.
Resuming operations not only secures these jobs but also supports the regional economy, including local suppliers, logistics providers, and downstream industrial operations. Preserving employment in the ferrochrome sector is crucial for social stability, particularly in regions heavily reliant on smelter activity.
The sector has been struggling due to a combination of factors:
Before the Eskom agreement, many smelters had issued Section 189 retrenchment notices to manage operating costs, signaling potential large-scale job losses. The Eskom Deal effectively halts these retrenchments while providing a pathway for operational recovery.
Officials from Eskom and the Department of Mineral Resources and Energy have welcomed the agreement. In a statement, Eskom CEO emphasized:
“This MoU is a step toward stabilizing a critical industry, protecting jobs, and ensuring energy interventions are sustainable without impacting the wider public.”
The government highlighted the importance of industrial beneficiation, stressing that keeping ferrochrome smelters operational preserves South Africa’s ability to process raw ore into value-added products, maintaining export competitiveness and economic value.
South Africa is a global leader in ferrochrome production, and the sector contributes significantly to export revenues. Smelter shutdowns threatened not only local jobs but also the country’s industrial export capacity, as idle furnaces reduce the amount of ferrochrome available for international markets.
By easing electricity costs and restarting production, the Eskom Deal helps stabilize output, ensuring that South Africa remains competitive in the global ferrochrome market. This intervention is also expected to support industrial diversification, as local processing reduces dependency on raw ore exports.
The multi-stakeholder task team will monitor progress closely, working with the regulator NERSA to approve interim tariffs and implement long-term solutions. Key steps include:
Industry analysts note that continuous monitoring and proactive energy management will be essential to ensure that the Eskom Deal delivers lasting benefits.
Experts have described the agreement as a positive development for South Africa’s industrial sector. Analysts highlighted that:
This approach reinforces the idea that targeted interventions can stabilize critical sectors without creating additional burdens on taxpayers or consumers.
The Eskom Deal marks a significant milestone in South Africa’s efforts to support energy-intensive industries amid ongoing challenges. By providing electricity relief, halting job losses, and enabling smelters to resume production, the agreement safeguards both employment and export capacity.
As the country navigates a complex energy landscape, such partnerships between government, utilities, and industry serve as a model for sustainable industrial recovery. The success of this deal could have long-term implications for job security, industrial competitiveness, and South Africa’s position in the global ferrochrome market.
