Archive photo for illustration purposes only. (Photo: Transalloys).
Employees of ferrochrome smelters in the vicinity of Witbank are waiting on hot coals for Kgosientsho Ramokgopa, the minister of energy and electricity, or Eskom to quickly come up with a solution on power tariffs.
Because the disputed deadline of 28 February, which was agreed with Eskom, arrives on Saturday.
By Thursday afternoon, however, there was still no mention of the improved power tariff of 62c/kWh that ferrochrome smelters are currently eyeing in order to continue their operations profitably.
Late last year, Eskom entered into a memorandum of understanding with Glencore Merafe and Samancor to further reduce the discount rate they pay for electricity from around 135c/kWh to 87c/kWh.
However, the proposed interim tariff of 87.7c/kWh is not sufficient to save the ferrochrome smelters.
The smelters therefore wanted the tariff further reduced to 62c/kWh to prevent the layoff of thousands of workers. They set a deadline of 28 February.
The energy regulator Nersa approved the 87c/kWh on the condition that the government cover the cost of the further reduction.
However, Enoch Godongwana, the finance minister, made no provision in his budget speech on Wednesday for help to Eskom to subsidize the power tariffs of smelters.
Transalloys, South Africa’s last remaining manganese smelter, is holding its breath for this week’s national budget. (Photo: Transalloys).
Smelters worried
Willie Venter, deputy general secretary of Solidarity, says there is now particular concern.
“The budget speech has come and gone; the deadline is almost here and still there is no light at the end of the tunnel. We are extremely concerned about the consequences for thousands of smelter employees.
“The only hope now is that Eskom or the Minister of Electricity will come up with a solution in time to save the industry and its workers,” Venter said on Thursday.
In addition to Glencore-Merafe and Samancor, the manganese smelter Transalloys has also confirmed that it may have to close its doors if a better power tariff does not come into question.
Transalloys employs approximately 600 people in Witbank, while Samancor’s plants in Witbank and Middelburg employ approximately 1,000 people, and Glencore’s in Witbank employ approximately 130 employees. Columbus Steel with its approximately 2,000 employees in Middelburg is also under pressure, and Ferroglobe in Witbank has also recently reduced jobs and may experience further problems without power tariff relief.
According to Venter, these employees and their families represent more than 12,000 people in a community that, not long ago, was already shaken by the closure of Highveld Steel.
“The impact of layoffs in the Witbank and Middelburg area will be great. Our concern is that large-scale unemployment awaits this area.
“A situation like the one that hit Newcastle (regarding the steel industry) awaits this community,” says Venter.