South Africa: NERSA Approves Interim Concessionary Electricity Tariff for Ferrochrome Smelters

Mechanism

Eskom's Negotiated Pricing Agreements (NPAs) with the two ferrochrome producers carry hardship provisions letting either side reopen pricing when commodity conditions turn against the smelters. Falling ferrochrome prices through late 2025/early 2026 pushed both Samancor Chrome and the Glencore-Merafe Chrome Venture toward smelter shutdowns; Eskom applied to NERSA on 10 April 2026 to amend the NPAs rather than lose the baseload industrial demand outright. NERSA held a public hearing on 25 May 2026 and approved the amendment four days later: an interim rate of 62 c/kWh, down from Eskom's standard industrial tariff, running 5 years for Samancor's six smelters and 3 years for Merafe's four. This is the only filed ZA action touching electricity-tariff industrial relief; the existing ZA chrome-sector entries in the register (chrome-ore export-control/permit regime, 2025-06-25) work the opposite lever — restricting raw-ore exports to force domestic beneficiation. This tariff concession is the demand-side complement: keeping the beneficiation capacity that policy is trying to protect from going offline on cost grounds.

Severity basis

Quantified on two axes disclosed by the primary source and corroborated by Eskom/Mining Weekly: (1) the concessionary rate itself, 62 c/kWh, set below Eskom's standard industrial tariff; (2) scope — 10 smelters across two producer groups, with term lengths of 5 years (Samancor) and 3 years (Merafe). Severity is set at 3 (moderate) rather than higher because this is a bounded, ring-fenced pricing concession to sustain existing capacity, not a new restriction, subsidy programme, or market-access change — and it is liberalising, not restrictive.

Downstream implications

• Sustains South African ferrochrome smelting capacity (Samancor + Merafe)

that the 2025-06-25 chrome-ore export-control package is trying to feed with cheaper domestic ore — the two measures work in tandem on supply and cost.

• Sets a precedent for hardship-clause tariff relief for other energy-

intensive ZA mineral-processing sectors (ferrochrome, and potentially ferromanganese/PGM smelting) facing weak commodity prices.

• Revenue variance is ring-fenced from standard tariff customers, per Eskom

— worth tracking whether that holds if further NPA amendments follow.

Open questions

• Exact standard/Megaflex industrial tariff rate the 62 c/kWh concession is

discounted against was not disclosed in either primary or secondary sources reviewed.

• Whether other ZA ferroalloy producers (e.g., ferromanganese smelters) have

filed or will file similar hardship applications.