Eskom strikes deal with ferrochrome producers to save thousands of jobs
Power utility Eskom has signed a deal with South Africa’s top ferrochrome producers
Image: File: Timothy Bernard/ Independent Newspapers
Power utility Eskom has signed a deal with South Africa’s top ferrochrome producers, Glencore–Merafe and Samancor Chrome, in a bid to save the struggling sector from collapse.
This comes as soaring electricity costs have pushed smelters to idle furnaces, threatening thousands of jobs and raising fears of wider economic fallout in energy-intensive industries.
"Eskom confirms that it has finalised a Memorandum of Understanding (MoU) with Samancor Chrome and the Glencore–Merafe Chrome Venture, following constructive engagements held on Friday with the Minister of Electricity and Energy and organised labour,". Eskom said.
"The MoU formalises a joint commitment to develop a sustainable, long-term intervention for the ferrochrome sector, which has been severely affected by global market pressures and rising production costs".
Eskom added that the National Energy Regulator of South Africa (NERSA) is currently processing an application for an interim tariff adjustment for the smelters, which would help ease immediate electricity cost pressures.
The country's ferrochrome industry has been shrinking under the weight of rising power costs. Electricity tariffs have increased nearly 10 times since 2008, leading to the closure of 14 smelters and the loss of around 350,000 jobs
"Once the interim tariff is approved, the smelters have committed to suspend the Section 189 retrenchment process and bring about 40% of their furnace capacity back online while the long-term solution is developed under the MoU".
Eskom Group Chief Executive, Dan Marokane, said the "MoU creates a structured process to find a sustainable and responsible solution that maintains industrial capacity while protecting broader electricity consumers".
"Eskom remains steadfast in its commitment to finding solutions that safeguard South Africa’s industrial capacity while protecting electricity consumers from unintended cost impacts. The collaborative approach under the MoU reflects a shared determination by government, industry, and labour to stabilise the ferrochrome sector and secure jobs."
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