The power utility said the deal will provide it 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 reindustrialization and economic growth.
Image: File
South Africa’s two major trade unions in the metals and broader industrial sectors have thrown their weight behind Eskom’s 62c/kWh electricity tariff agreement with key smelting companies, describing it as a critical intervention to safeguard jobs, stabilise the sector and support long-term industrialisation.
This comes as Eskom last week concluded a 62c/kWh electricity tariff for Samancor Chrome and Glencore–Merafe Chrome ferrochrome smelters after threats to the industry's survival and jobs.
The power utility said the deal will provide it 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 reindustrialization and economic growth.
The National Union of Metalworkers of South Africa (Numsa) and Solidarity over the weekend both welcomed the development, although from slightly different angles, with each emphasising the urgency of regulatory approval by the National Energy Regulator of South Africa (Nersa) to unlock its full benefits.
Numsa general secretary Irvin Jim praised Eskom’s responsiveness to industry concerns, saying the utility had demonstrated leadership by adjusting conditions attached to the tariff.
“Numsa notes and appreciates the developments between Eskom and the smelting sector,” Jim said, adding that the union “applauds Eskom leadership” for accommodating the sector’s needs.
At the heart of Numsa’s support is its long-standing call for competitive electricity pricing to drive beneficiation — the local processing of raw minerals such as chrome and manganese — instead of exporting them in raw form.
Jim reiterated that the union has “consistently championed that the smelting industry must be given a competitive electricity tariff so that we stop exporting jobs to other countries.”
He argued that the agreement could help reverse South Africa’s deindustrialisation trend by enabling the reopening of mothballed smelters and creating much-needed employment.
“We must champion beneficiation and build new sectors at the back of such minerals,” Jim said, warning that failure to act would deepen unemployment, poverty and inequality.
Numsa also framed the agreement as evidence of the importance of maintaining Eskom as a state-owned entity.
According to Jim, “without Eskom being democratically owned and controlled by the people and the State, no Eskom will have the capacity to deliver such a competitive electricity tariff to drive manufacturing and industrialisation.”
The union has urged Nersa to fast-track approval of the revised tariff conditions, stressing that delays could undermine efforts to revive the struggling smelting industry.
Solidarity, meanwhile, focused strongly on the immediate implications for jobs and operational stability.
Willie Venter, Solidarity's deputy general secretary described the agreement as a “significant breakthrough” for the sector, particularly in light of looming retrenchments.
“We are pleased that an agreement has been reached. The fact that an agreement is in place has a direct impact on the looming retrenchments,” Venter said. “We hope that both Glencore and Samancor will now halt their retrenchment processes.”
With South Africa’s unemployment rate hovering around 42%, Solidarity warned that protecting existing jobs is as crucial as creating new ones. The union estimates that up to 4,000 direct jobs could be saved if the agreement is approved and implemented.
Beyond job preservation, Solidarity highlighted the broader economic benefits of the tariff arrangement.
Venter noted that the deal would allow smelters to ramp up production by bringing more furnaces back online.
“This agreement creates the space for smelters to bring more furnaces back into operation. This means increased production, improved revenue for companies, and greater job security for workers,” he said.
Importantly, Solidarity also pointed out that the agreement aligns with Eskom’s own financial interests.
“If these smelters were to cease production, it would have a direct negative financial impact on Eskom,” Venter explained, adding that the deal helps secure the utility’s revenue base through predictable electricity demand.
Both unions underscored the role of cooperation between government, industry and labour in reaching the agreement. For Solidarity, the outcome demonstrates that “when government, employers and trade unions work together, meaningful and positive outcomes can be achieved.”
BUSINESS REPORT