South African energy regulator Nersa has officially approved a vital discounted power tariff for two struggling local ferrochrome producers.
The state utility Eskom announced Friday that Samancor Chrome and the Glencore-Merafe joint venture secured the relief package.
A Nersa spokesperson confirmed the compromise tariff is fixed at 0.62 rand, equivalent to roughly $0.038, per kilowatt-hour.
The lifetimes of the agreements differ, running for five years for Samancor and three years for the Glencore-Merafe partnership.
South Africa is the global leader in raw chrome ore extraction but recently surrendered its industrial smelting crown to China.
A devastating tenfold increase in local electricity costs since 2008 previously forced dozens of processing plants to close down.
The new concessionary framework aims to breathe life back into the nation’s heavily strained mineral beneficiation and processing sector.
Eskom confirmed the negotiated structure requires zero government financial assistance and protects normal citizens from any added tax burdens.
The agreements elegantly weave in profit-sharing clauses that allow Eskom to benefit if international commodity market conditions improve unexpectedly.
Chief executive Dan Marokane emphasized that the strategy successfully balances essential industrial preservation with the utility’s long-term financial health.
Energy-intensive local smelters remain crucial because they fuse chromium and iron to forge the ferrochrome needed for global steel production.