Tariff agreement a much-needed boost for smelting industry 

Solidarity welcomes the approval by the National Energy Regulator of South Africa (NERSA) of the special electricity tariff for Glencore-Merafe and Samancor and believes this breakthrough could bring relief to thousands of employees whose jobs at smelting plants had been at risk.

Solidarity described the decision as a much-needed boost for an industry that had been on the brink of significant downsizing and discussions of possible closures.

Cornelius van Leeuwen, Sector Coordinator at Solidarity, expressed his appreciation to NERSA, Eskom, Glencore-Merafe and Samancor, as well as the respective chief executives and teams who have worked together over the past few months to find a viable solution to the crisis.

Per the agreement, these ferrochrome smelters will benefit from an electricity tariff of 62c per kWh.

For a sector that has come under increasing pressure due to rising electricity costs and intense international competition, this relief was essential.

According to Van Leeuwen, the decision is important not only for the companies concerned, but also for their employees, their families, and the communities in which they live and work, many of which depend on the smelting industry.

“This decision brings renewed hope to an industry that has been under tremendous pressure in recent months. It is not merely a victory for two companies, but for entire communities that depend on the continued existence of the industry.

“From the outset, Solidarity emphasised that the consequences of possible closures would extend far beyond the gates of the smelters.

“When a smelter closes, it is not only employees who lose their jobs. Local businesses, service providers and entire towns feel the impact. That is why this decision is of great significance to the economic well-being of many communities in Mpumalanga, North West, Limpopo and other parts of the country,” said Van Leeuwen.

Solidarity further notes that the companies still need to finalise their internal processes before there can be complete certainty regarding the long-term implications of the decision.

Feedback on the section 189 processes at Glencore-Merafe and Samancor is expected shortly.

“We welcome the decision and the positive momentum this agreement created. The industry needs it. We hope this development will result in greater job security for employees and lead to increased stability for the sector as a whole,” said Van Leeuwen.

Although Solidarity believes the special tariff is an important step forward, it remains critical that South Africa addresses the broader challenge of affordable and reliable energy.

“The tariff agreement certainly provides an opportunity to catch one’s breath, but the long-term solution remains an energy sector that enables South African industries to compete internationally while adding value locally and creating employment opportunities,” said Van Leeuwen.

Solidarity believes the decision is an example of how cooperation between stakeholders can provide solutions when the survival of industries and jobs is at stake.