The production of Ferrochrome, a combination of chromium and iron used primarily in stainless steel production requires vast amounts of electricity, making power tariffs a decisive factor in global competitiveness.
Since 2008, electricity costs in South Africa have risen by more than 900%, forcing dozens of smelters to shut down.
Ramokgopa said initial relief measures would focus on two smelters that had already begun retrenchment processes, with broader tariff support under consideration for the wider sector. He added that government intervention could significantly restore operations.
“As a result of this intervention, we expect that by December of this year, we’re going to have 45 smelters operating and by December 2027, we will have 49 smelters operating,” he said during a media briefing.
South Africa moves to ease pressure with lower energy costs
In a bid to stem further job losses, state power utility Eskom announced a 29% reduction in electricity tariffs for two distressed ferrochrome producers.
Samancor Chrome and Glencore’s joint venture with Merafe Resources will now pay 62 South African cents per kilowatt-hour, down from an interim tariff of 87.74 cents approved earlier this year.
At the end of 2025, the smelters were paying as much as 1.36 rand per kilowatt-hour – a level widely viewed by industry players as unsustainable.
However, restoring South Africa’s dominance in ferrochrome production will depend on whether energy reforms can deliver sustained cost relief in a sector where margins remain thin and global competition – particularly from China, is intensifying.
