The Glencore-Merafe Chrome Venture has once again decided to extend the deadline for the conclusion of Section 189 retrenchment consultations with employees at its ferrochrome smelters—this time moving the date to April 9. Section 189 refers to a legal process in South Africa where companies consult with workers before retrenching staff.
This updated extension follows an earlier shift from March 31 to April 7, which had been announced the previous week. Merafe, a company listed on the JSE, confirmed these changes in a recent statement.
“Shareholders are hereby advised that, at Eskom ’s request, the Glencore-Merafe Chrome Venture has agreed to a further extension of the Termination Date to 9 April 2026,” Merafe said in its statement.
Eskom, South Africa’s power utility, was reportedly reviewing a counter proposal regarding the terms for a 62c/kWh electricity tariff offer. This offer, first announced on February 27, aims to prevent further shutdowns of smelting operations by ferrochrome producers such as Glencore-Merafe and Samancor Chrome. The 62c/kWh rate is considered competitive and crucial for the industry’s sustainability.
Glencore-Merafe initially described Eskom’s tariff offer conditions as “unworkable.” However, the company later expressed hope that a mutually beneficial and practical solution could still be reached.
Meanwhile, the National Energy Regulator of South Africa (Nersa)—which must approve any new electricity tariffs for the ferrochrome industry—confirmed it has started a process to evaluate the existing negotiated pricing agreement (NPA) between Eskom and the ferroalloys producer Transalloys.
In a related development, Nersa reported that Transalloys had approached Eskom in November last year to highlight financial hardship resulting from the “take-or-pay” contractual terms of their NPA—meaning Transalloys is required to pay for a minimum amount of electricity, whether or not it uses that amount. This arrangement can be particularly challenging during periods of reduced production.
Transalloys, which operates a manganese ferroalloys smelter in Mpumalanga, has publicly called for any electricity tariff deal granted to the ferrochrome sector to also be extended to the broader ferroalloys industry, ensuring fair treatment across different metals producers.
The company also informed Eskom that, given current market conditions, it would need to reduce production. This could lead to its electricity consumption dropping below the minimum 80 GWh threshold specified in its NPA, potentially affecting its contractual obligations.
Nersa has set a deadline of Thursday, April 30 for written comments regarding a proposed temporary amendment to the NPA, inviting public input on changes that could affect the industry.
Earlier this year, the Electricity Regulator approved Eskom’s application to provide temporary tariff relief to ferrochrome producers Samancor Chrome and the Glencore-Merafe Chrome Venture for 12 months. This decision came after both companies reported difficulties with the existing tariff and terms included in their NPAs with Eskom.
Eskom subsequently applied to Nersa for approval to supply electricity to the smelters owned by these entities at a temporary tariff of 87.74c/kWh. At the same time, Eskom indicated its intention to continue pursuing a 62c/kWh tariff, reflecting industry feedback that this lower price would make South African smelting operations more competitive.