This step is considered a decisive attempt to stabilize giants in the industry, specifically Glencore-Merafe and Samancor, in the short term. (Photo: Transalloys).
Solidarity welcomes the announcement by Kgosientsho Ramokgopa, the Minister of Electricity and Energy, that a reduced power tariff of 62c per kWh will be provisionally granted to the main smelters in the ferrochrome industry.
This step is considered a decisive attempt to stabilize giants in the industry, specifically Glencore-Merafe and Samancor, in the short term.
Although the news came at the last minute, it brings much-needed relief to thousands of employees at these plants. The tension has been running high lately due to the imminent reality of large-scale layoffs if an affordable power solution could not be found.
According to Solidarity, however, the companies that benefit from this reduced rate will still have to get clarity on the exact conditions that come with it. In addition, the National Energy Regulator of South Africa (Nersa) has yet to put its stamp of approval on the agreement. The reality is that the initial interim tariff of 87.7c per kWh simply would not be sufficient to sustainably continue operations at the plants.
Willie Venter, deputy general secretary of Solidarity, believes the new tariff can bring an important turning point.
“We are grateful that the plea of workers and communities was heeded at the last minute. This decision can prevent the trigger being pulled with redundancies at Glencore-Merafe and Samancor, as a deadline of 28 February has been set for the improved tariff,” says Venter.
Although the focus is currently on the two main smelters, Solidarity warns that the rest of the industry must not be left behind. Other plants, such as the manganese smelter Transalloys, have also long warned that closures would be inevitable without a competitive tariff.
Venter also emphasized that the battle has not yet been won.
“However, we hope that the intention will be extended to also save the jobs of workers at other smelters, in addition to those of Glencore and Samancor. This is therefore not yet a comprehensive solution for the larger steel and manufacturing industry and there is still urgent work needed to find solutions for the larger industry as well.”
The ferrochrome and related smelter industry has long been under tremendous pressure due to unfavorable market conditions and the repeated increases in electricity costs. The potential collapse of this sector would have disastrous consequences for several provinces, where thousands of direct and indirect jobs were in the balance.
However, the outlook now looks significantly better with plans to bring the country’s smelters back online.
“However, after this announcement, it is gratifying that efforts are currently being made to bring 49 of a possible 66 smelters online by the end of 2027. Only 11 of them are currently operational. If this materializes, it could create more than 11,000 direct jobs and bring about more than 100,000 indirect jobs – something the country desperately needs,” explains Venter.
Solidarity appeals to all role players, including the minister and Eskom, to build on this constructive process. It is hoped that sustainable solutions for all in the sector will be developed through further discussions.
However, Venter also has a clear message to the companies that are now benefiting from the positive change: “We are grateful for the intervention, but warn the employers who benefit from this positive change to now do what is necessary to bring the 45 smelters that must be online by the end of 2026, and the rest by the end of 2027. There is now a great responsibility on these smelters to be sustainable, create jobs and protect jobs.”
Solidarity will continue to actively defend the interests of its members and all affected workers against the many challenges facing the manufacturing sectors.