South Africa cuts power tariff to support ferro chrome industry

• New tariff marks further reduction from interim rate proposed in Jan’26
• Global trade to improve, with South Africa being major FeCr exporter

South Africa has taken a major step to support its struggling ferro chrome industry by approving a reduced electricity tariff of 62 cents per kilowatt hour (c/kWh). The decision was backed by Electricity and Energy Minister Kgosientsho Ramokgopa, aiming to prevent plant closures and protect thousands of jobs.

State power utility Eskom confirmed that the new proposed tariff of 62 c/kWh is lower than the interim rate of 87.74 c/kWh that was introduced in January 2026 for 12 months. The earlier relief had provided temporary support, but industry players said it was not enough to ensure long-term survival.

The new tariff framework has been offered to Glencore-Merafe Chrome Venture and Samancor Chrome, two major ferro chrome producers that had activated hardship clauses under their existing pricing agreements due to rising electricity costs and weak market conditions.

Eskom’s CEO, Dan Marokane, said the proposal will now be submitted to the National Energy Regulator of South Africa (NERSA) for approval. He added that the plan aims to balance industrial support with financial stability and ensure that other electricity consumers are not unfairly burdened.

Minister Ramokgopa said the move could help restart idle smelters and save jobs across the ferro chrome value chain. The government views this as a strategic decision to protect South Africa’s mineral beneficiation industry and maintain its position in the global chrome market.

Further details, including the final terms and duration of the agreement, will be shared after regulatory approval.

In CY’25, South Africa’s ferro chrome exports fell by 51% y-o-y to 1.77 million tonnes (mnt) against 3.64 mnt in CY’24. With the power tariff reduction, global trade flows might improve, as South Africa is a key ferro chrome producer and exporter.