Cheaper electricity will spark ferrochrome revival, says Ramokgopa
· Citizen
Electricity and Energy Minister Kgosientsho Ramokgopa has unveiled an electricity tariff framework aimed at stabilising and revitalising South Africa’s struggling ferrochrome industry, describing the intervention as a “game changer” for the economy.
Addressing the media on Friday, Ramokgopa announced government support for electricity tariff relief measures that will see significant reductions in power costs for major ferrochrome producers.
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Proposed tariffs of around 62 cents per kilowatt-hour are being considered for large smelters such as Samancor Chrome and the Glencore-Merafe venture.
This marks a sharp drop from the interim tariff of 87.74 cents per kilowatt-hour approved by the National Energy Regulator of South Africa (Nersa) in January 2026. Producers had previously been paying around R1.35 per kilowatt-hour.
The minister stated that the competitive benchmark is closer to 62 cents per kilowatt-hour, in line with international competitors, such as China.
Preventing job losses
The intervention follows retrenchment processes initiated by major ferrochrome producers, including Glencore and Samancor Chrome, which cited unsustainable electricity prices as their primary grievance.
Ramokgopa said the tariff relief is intended to stabilise operations, prevent job losses and attract smelters back into production.
“It’s something that I could not have been able to announce about 18 months ago, and this has been made possible by the men and women of Eskom… for having the foresight in ensuring that we are able to design an acceptable framework that will make it possible for us to intervene in the South African economy,” he said.
He stressed that the measures are structured within the existing fiscal framework, including the debt relief programme, and will not require new funding or shift costs onto residential consumers.
“We are not asking for new money. We have no intention of socialising this cost… we are working within the existing framework,” Ramokgopa said.
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11 000 direct jobs at stake
South Africa has 66 smelters, but only 11 are currently operational due to high electricity costs and market pressures.
Ramokgopa said the intervention is expected to see 45 smelters operating by December 2026 and 49 by December 2027.
The framework is projected to support approximately 11 480 direct jobs and potentially 121 392 total jobs, including indirect employment across the value chain.
“When I talk smelters, I’m talking jobs, I’m talking [about an] injection into the South African economy. It means families can put food on the table. We have restored their dignity,” he said.
Government estimates the intervention will generate an additional R20 billion in expenditure on raw minerals for beneficiation, R5.5 billion in additional tax revenue, about R76 billion in export earnings, and R17.9 billion in additional electricity revenue for Eskom from 24-hour smelter operations.
Ramokgopa emphasised that the measures are competitiveness interventions rather than subsidies.
“President Cyril Ramaphosa has made the point that we must move away from colonial patterns of extraction. There must be beneficiation at source. Electricity is the first mover in that process,” he said.
He described the announcement as the most significant of his tenure. “This is the gain we spoke about. We have paid the pain of load shedding. Now is the time for the return.”
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Powering growth sustainably
Mteto Nyati, board chairperson of Eskom, said the announcement marked a proud milestone in South Africa’s journey toward industrial growth and shared prosperity.
“We stand here not just to announce support for our smelters, but to celebrate what became possible when a utility recommits to its purpose. Our purpose is powering growth sustainably,” Nyati said.
He highlighted Eskom’s dual mandate to operate as a commercially viable entity while advancing developmental objectives.
“Commercially, we must operate efficiently, deliver reliable power, manage our costs and secure financial health.
“Developmentally, we must recognise the critical role electricity plays in enabling jobs, beneficiation, exports and communities to thrive,” Nyati said.
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