Major Mining Ventures Demand Deeper Electricity Discounts to Secure 2,400 Smelter Jobs

The Glencore-Merafe Chrome Venture warns of potential job cuts at smelters unless electricity tariffs are reduced to sustainable 2026 levels.

By: AXL Media

Published: Feb 18, 2026, 9:31 AM EST

Source: Information for this report was sourced from BusinessTech

Interim Tariffs vs Long Term Sustainability

The recent recommissioning of the Lion Smelter in Steelpoort marks a temporary victory for the ferrochrome industry. Following NERSA’s approval of a 12 month interim tariff, the facility achieved its first production tap on February 16, 2026. However, Merafe Resources maintains that this rate is merely a short term fix. The joint venture, which is a significant player in the R1.4 trillion Glencore portfolio, insists that all three of its primary smelter operations require a significantly lower base rate to remain globally competitive against rising input costs.

The Economic Impact of Retrenchments

The stakes for the local economy are high, as approximately 2,400 workers currently face potential job losses if the Boshoek and Wonderkop smelters remain idled. The joint venture has been engaged in Section 189 consultations since late 2025 but suspended them temporarily following an MOU with Eskom and the government. As the February 28 deadline approaches, management is intensifying negotiations with regulators and labor unions to avoid permanent closures that would devastate mining communities in Limpopo and the North West province.

Public Pressure and Eskom’s Pricing Dilemma

The request for deeper discounts has sparked a debate over energy equity in South Africa. Eskom CEO Dan Marokane has cautioned that negotiated pricing for energy intensive firms often shifts the financial burden onto ordinary households, who typically pay over R2 per kWh. While Electricity Minister Kgosientsho Ramokgopa supports discounted tariffs to preserve industrial capacity, the utility must balance these concessions against its own debt stabilization goals. The outcome of these 2026 tariff talks will set a major precedent for the future of the South African ferroalloys industry.