Glencore Mulls Job Cuts at Ferrochrome Venture in South Africa
TLDR
- Glencore Plc’s ferrochrome joint venture in South Africa has started restructuring consultations that may result in job losses, Merafe Resources said Monday
- The process centers on two smelters closed in May as part of broader cutbacks in the struggling industry
- South Africa is the world’s largest producer of chrome ore, but its ferrochrome processing sector has been squeezed by rising electricity costs and competition
Glencore Plc’s ferrochrome joint venture in South Africa has started restructuring consultations that may result in job losses, Merafe Resources said Monday. The process centers on two smelters closed in May as part of broader cutbacks in the struggling industry.
South Africa is the world’s largest producer of chrome ore, but its ferrochrome processing sector has been squeezed by rising electricity costs and competition from lower-cost Chinese facilities. The Glencore-Merafe venture, in which Glencore holds 79.5% and Merafe 20.5%, operates five smelter complexes. Four have been mothballed since 2020, and the last active plant was recently shut for maintenance.
The industry is pressing state utility Eskom for cheaper electricity tariffs, while also awaiting government reforms. In June, South Africa approved a plan to support ferrochrome producers by introducing new power tariffs and imposing taxes and controls on raw chrome exports, though measures are not yet in place.
Merafe said the restructuring reflects “continuing economic pressures” and the lack of sustainable solutions in the near to medium term. The company did not disclose the number of jobs at risk.
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Key Takeaways
South Africa’s ferrochrome industry is under severe strain, highlighting the risks of energy-intensive industries operating in a high-cost power environment. Chrome ore accounts for more than 70% of global reserves, but South Africa’s value-added processing has steadily declined as smelters shut and exports of unprocessed ore surged to China. Glencore and Samancor Chrome dominate the sector, but both have cut back operations in recent years. Without cheaper electricity and clear government policy, South Africa risks losing more downstream capacity and becoming primarily a raw ore exporter. The government’s June reforms aim to slow this trend by incentivizing local beneficiation and taxing ore exports, but implementation delays are fueling uncertainty. For workers and mining communities, the restructuring underscores how global competition and domestic energy challenges are reshaping one of South Africa’s key industrial sectors, with jobs and export revenues at stake.
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