Glencore Threatens South Africa Tariff Talks

Glencore's South African ferrochrome unit is threatening to withdraw from negotiations with the South African government over a discounted electricity package. Glencore requires reduced tariffs from Eskom to keep its loss-making smelters open and avert job cuts, with up to 1,500 jobs at risk. Eskom offered a significant tariff reduction, but Glencore Ferroalloys CEO Japie Fullard stated that some conditions of the deal are unacceptable. The offer is subject to approval by the South Africa===National Energy Regulator of South Africa. Samancor Chrome, another ferrochrome producer, has already announced layoffs despite a similar offer, citing concerns about the long-term viability of the industry due to attached conditions. South African smelters are struggling with high electricity costs, which have risen tenfold since 2008, and increasing competition from Chinese producers, leading to only 11 out of 66 smelters remaining operational in South Africa. The South African government is keen to save the industry due to its employment and importance to Eskom.