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Eskom has signed a new agreement with major ferrochrome producers to stabilise South Africa’s struggling smelters and avoid further job losses. The move comes as global market pressure and rising electricity costs threaten operations.
What Happened
Eskom confirmed on Monday, 8 December 2025, that it has finalised a Memorandum of Understanding (MoU) with Samancor Chrome and the Glencore–Merafe Chrome Venture.
The agreement follows a Friday meeting with the Minister of Electricity and Energy and organised labour. It forms a task team to find long-term solutions that will help smelters remain competitive—without passing extra costs to other electricity users.
Both smelters had triggered hardship clauses in their pricing deals due to unsustainable electricity costs and tough global markets.
Official Response
Under the MoU, a multi-stakeholder task team—made up of Eskom, the producers, and government—has three months to propose a sustainable pricing solution.
“The MoU creates a structured process to maintain industrial capacity while protecting broader electricity consumers,” said Eskom CEO Dan Marokane.
Eskom had earlier applied for a temporary waiver of take-or-pay electricity obligations, which was granted by the National Energy Regulator of South Africa (NERSA).
Community Impact
If a solution is found and approved, the producers have committed to halting planned retrenchments and restoring about 40% of their furnace capacity, creating a path back to production.
The ferrochrome sector plays a vital role in local economies, especially in mining towns. Stabilising the industry is seen as essential for job retention and energy stability.
Key Facts
- MoU signed: 8 December 2025
- Producers: Samancor Chrome, Glencore–Merafe
- Interim pricing relief: Approved by NERSA
- Capacity recovery: 40% once tariff plan is approved
- Job cuts: Section 189 process to be suspended
