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South African power utility Eskom announced on Friday that energy regulator Nersa approved an interim discounted electricity tariff for struggling ferrochrome producers.
A Nersa spokesperson confirmed to Reuters that the new rate sits at 0.62 rand ($0.0383) per kilowatt-hour. Eskom applied for the discount last month, and Nersa held a public hearing on the matter earlier this week.
The agreements feature varying durations depending on the company.
Eskom secured a five-year term for Samancor Chrome, while the joint venture between Glencore and Merafe Resources received a three-year deal.
South Africa remains the world’s largest producer of chrome ore, but it recently lost its position as the top processor of chrome into ferrochrome to China.
A roughly tenfold spike in electricity costs since 2008 drove this decline, forcing dozens of local smelting plants to shut down.
Eskom chief executive Dan Marokane emphasised that the new framework requires no additional government fiscal support or taxpayer funding.
The structured agreement operates within a regulated environment and includes an equitable profit-sharing mechanism tied to market performance.
This design ensures that the discounted rates do not place any extra financial burdens on standard tariff customers. Energy-intensive smelters require massive amounts of power to combine chromium and iron into ferrochrome, an essential component in global steel production.
