Eskom reports that its Smelter Task Team has concluded a 62c/kWh electricity tariff for Samancor Chrome and Glencore–Merafe Chrome ferrochrome smelters. This is in the context of continuing difficulties facing South Africa’s ferrochrome sector, including high electricity prices, in a sharply competitive global market, the prospect of smelters closing and potential job losses. The tariff intervention is structured to improve Eskom’s liquidity without requiring higher tariffs, additional Eskom borrowing, or further government support. It also provides Eskom with predictable sales volumes for up to the next five years and protects public investments made in the utility, as well as its ability to support reindustrialisation and economic growth.
Eskom has concluded a 62c/kWh electricity tariff adjustment for key ferrochrome smelters and will move on to the next stage of tariff interventions.
However, all concluded agreements remain subject to approval by the National Electricity Regulator of South Africa (NERSA). Eskom submitted an application to NERSA on 10 April 2026, for approval of the 62c/kWh electricity tariff for the Samancor Chrome and Glencore–Merafe Chrome ferrochrome smelters. The utility notes that the dissemination of specific agreement details falls under NERSA’s purview, and the extent of such disclosure will be governed by its internal protocols and regulatory limitations, in line with the need to respect the commercial confidentiality of Samancor Chrome and Glencore–Merafe Chrome.
NERSA is expected to conduct a public consultation process in due course, in line with due process.
Dan Marokane, Group Chief Executive at Eskom, said: “Without the success of Eskom’s turnaround over the past three years, which has restored consistent baseload electricity supply for which there is currently no alternative source available to energy‑intensive users, we would not have been in a position to support the ferrochrome industry or play a role in preventing job losses. Eskom will continue to work with intergovernmental teams, labour, producers and stakeholders to balance Eskom’s financial sustainability and regulatory responsibilities so that it can play its part in delivering electricity to drive economic growth.”
Amendment of the current Negotiated Price Agreements
The amended NPA is a medium‑term solution to run up to five years and enables a proactive, time‑bound case‑by‑case approach, allowing Eskom to tailor pricing and contractual structures to the specific commercial circumstances of each smelter, ensuring transparency, fairness and regulatory alignment for all customers at the same time.
The ferroalloy and iron and steel sectors are experiencing sustained pressure from global commodity markets, rising input costs and structural competitive challenges, and will be prioritised ahead of other smelter industry sectors. For these sectors, pricing will be determined through a structured, bottom‑up assessment that takes into account the cost of production, electricity intensity, and exposure to commodity prices. This is not a uniform approach; rather, it allows for tailored pricing solutions specific to each smelter.
A consistent economic logic is applied while Eskom retains the flexibility to respond to sector‑specific conditions. The approach is designed to avoid under‑support, which can result in plant closures, or over‑subsidisation, which can distort competition. Thus differentiated it ensures that Eskom applies a consistent economic framework across the smelting sector, while avoiding the risk of unintended pricing benchmarks or cross‑sector distortions, in support of a sustainable, long‑term industry solution.
The collaborative efforts of government, labour and industry, through a structured process, will continue to deliver sustainable and responsible solutions that maintain industrial capacity while protecting broader electricity consumers.
For more information visit: www.eskom.co.za
