Glencore halts 1,500 job cuts after South Africa approves discounted power for smelters

Glencore Plc, the Swiss commodity trading and mining giant led by South African executive Gary Nagle, has scrapped plans to lay off as many as 1,500 workers at its South African ferrochrome operations after regulators approved sharply discounted electricity tariffs, offering relief to an industry battered by soaring power costs.

The decision follows approval from the National Energy Regulator of South Africa, which granted reduced electricity pricing to support struggling smelters and stabilize output in one of the country’s most energy-intensive industries.

Power relief lifts struggling smelters

Glencore’s ferrochrome unit, operated through Merafe Resources, had earlier moved to cut jobs after suspending operations at its Boshoek, Wonderkop, and Lion smelters in May 2025, citing rising costs and weak viability.

The joint venture initiated retrenchment proceedings in September, as electricity tariffs, widely seen as the biggest threat to the sector, continued to climb.

However, government intervention has now reduced tariffs by about 54% to R0.62 ($0.038 per kilowatt-hour), easing financial pressure on producers. Merafe said the discounted pricing marks “a further step towards stabilising operations and progressing the phased restart of the business.”

Industry-wide support amid global pressure

The tariff relief extends across South Africa’s ferrochrome sector, following negotiations involving producers including Samancor Chrome.

South Africa, the world’s largest producer of chrome ore, has steadily lost ground to China in ferrochrome processing, largely due to surging electricity costs.

Power prices have increased roughly tenfold since 2008, an estimate that may need verification, forcing widespread shutdowns across the industry. Today, only about 11 of the country’s 66 smelters remain operational, according to available data that should be independently confirmed.

High energy costs reshape the sector

Operating in 35 countries across 60 commodities, Glencore continues to expand under Nagle’s leadership, supported by a workforce of 150,000. Nagle himself holds a $9.24 million stake in the company, aligning his interests with those of shareholders.

Ferrochrome production, which involves combining chromium and iron for use in stainless steel manufacturing, is highly energy-intensive, making electricity pricing a decisive factor in competitiveness.

As costs surged, many South African operators were priced out of global markets, allowing Chinese producers to dominate processing capacity. The latest intervention signals a policy shift aimed at reviving domestic smelting, preserving jobs, and restoring some of the country’s lost industrial capacity. While the tariff relief offers immediate breathing room, the long-term sustainability of South Africa’s ferrochrome industry will depend on stable energy pricing and continued operational efficiency improvements.