South Africa approved an estimated $2.3 billion five-year power tariff-package for its largest ferrochrome producers, moving to halt an industrial decline that saw the nation fall off its perch as Africa’s top manufacturing economy.
The energy regulator signed off on the preferential electricity tariff for Glencore’s local venture and Samancor Chrome, slashing power prices by over 50% from the standard baseline.
The intervention is an attempt by Pretoria to stabilize a smelting sector dominated by soaring electricity costs as a result of over-budget megaproject debt and ageing coal-fired power plant fleet maintenance. The urgency of the rescue package is underscored by the African Development Bank’s latest industrial rankings, which placed Morocco ahead of South Africa for the first time since 2010 following rolling power blackouts and weak supply chains.
In return for the pricing concessions, Glencore immediately withdrew layoff notices, safeguarding more than 1,500 positions and thousands of other indirect jobs across the platinum belt.
