Glencore-Merafe has announced the start of retrenchments at its idle Wonderkop and Boeshoek smelters in South Africa, with additional roles affected in its Alloys division, as southern Africa’s ferrochrome sector continues to feel the pressure of rising energy costs.
This follows the failure to secure a new electricity tariff that had been under negotiation with the South African government, MiningMx reported.
According to the trade union Solidarity, about 2 425 direct jobs and more than 17 000 indirect jobs are at risk. Glencore said its Lion smelter would remain operational, while Wonderkop and Boshoek would be placed on care and maintenance.
The company blamed the retrenchments on the government’s inability to provide a competitive electricity tariff.
“Despite its engagement with Government, no viable interventions or solutions have been presented to address the severe challenges impacting our ferrochrome operations, the most pressing requirement being the provision of a competitive energy tariff. As a result, in the absence of any viable solution from the Government, retrenchments will commence within the next couple of weeks.”
Glencore first flagged potential job cuts on 1 September when it initiated a Section 189 process in terms of South Africa’s Labour Relations Act. The joint venture had already suspended operations at the Boshoek and Wonderkop smelters following the closure of 10 other smelters across the country. Production at the Lion Complex was also halted for maintenance.
The retrenchments highlight the mounting strain on South Africa’s ferrochrome industry, which is one of the country’s most energy-intensive sectors. For years, producers have faced rising electricity tariffs, recurring load shedding and grid constraints that make it increasingly difficult to compete with cheaper Chinese ferrochrome, which benefits from lower energy costs and state-backed production. South Africa, historically one of the world’s largest ferrochrome suppliers, has been steadily losing market share as the cost of Eskom power has increased more than five-fold since 2008.
The decline of the sector has major economic implications. Smelters are key employers in North West and Limpopo, regions that already face limited industrial activity. Analysts warn that continued shutdowns could accelerate deindustrialisation and weaken South Africa’s position in the global stainless-steel value chain, which relies heavily on ferrochrome.
Government had previously signalled willingness to assist intensive energy users. Earlier this year, Electricity
Minister Kgosientsho Ramokgopa said the Cabinet had approved a framework for competitive tariffs for large power users and indicated that the government intended to help restart smelters. However, Glencore’s announcement suggests that no concrete agreement was reached, raising doubts about the state’s ability to provide timely support to struggling heavy industries.
