South Africa's Power Play: Eskom's Tariff Reduction to Resuscitate Ferrochrome Sector

South Africa's energy regulator approved a significant tariff reduction for Eskom to aid struggling ferrochrome operations. This move aims to prevent further smelter closures and job losses due to surging electricity costs. The plan requires government support to cover the tariff shortfall, ensuring relief for distressed firms.

In a decisive move, South Africa's energy regulator approved Eskom's application to slash electricity tariffs by 35% for two ferrochrome operations, alleviating high power costs which have previously shuttered numerous smelters across the nation.

The state utility, in December, sought approval to aid Samancor Chrome and a Glencore-Merafe joint venture, aiming to avert additional smelter closures and save jobs amidst viability challenges exacerbated by high electricity costs.

The tariff reduction, effective from January 2026, mandates government intervention to fund the discrepancy between current and reduced tariffs. Majola emphasized the need for this cost not to burden standard customers, as the nation fights to reclaim its former status as the top ferrochrome processor.

(With inputs from agencies.)