KEY POINTS
- Eskom reduced electricity prices by 29% for two ferrochrome producers to help them avoid shutting down.
- The companies will now pay 62c per kWh instead of 87.74c, easing pressure from soaring energy costs.
- Government says more power-price relief may be extended to the wider smelting sector to save jobs.
South Africa’s power utility, Eskom, has announced a major electricity price cut of about 29% for two struggling ferrochrome producers.
The decision is aimed at helping the companies stay afloat and preventing large-scale job losses in an industry that has been hit hard by rising energy costs.
The discounted tariff will allow Samancor Chrome and a joint venture involving Glencore and Merafe Resources to pay about 62 cents per kilowatt hour.
That is significantly lower than the temporary rate of 87.74 cents per kilowatt hour approved earlier this year by the National Energy Regulator of South Africa.
Why Electricity Prices Matter So Much
Electricity is the biggest cost in the smelting business, and over the years, prices in South Africa have risen sharply by more than 900% since 2008.
That surge has forced many smelters to shut down and pushed others to the edge of collapse.
Because ferrochrome production uses huge amounts of power, even small changes in electricity tariffs can determine whether plants keep running or close their doors. Industry leaders have warned that without relief, thousands of jobs could disappear.
The Minister of Electricity and Energy, Kgosientsho Ramokgopa, explained that the immediate price cut targets the two companies that had already begun planning layoffs. According to him, the government is also looking at broader electricity support for the entire smelting sector to protect more jobs and stabilise production.
Officials say the move is not just about helping companies survive but also about protecting communities that depend on mining and smelting for income and local economic activity.
