KEY POINTS
- Glencore says ferrochrome industry is near a possible solution.
- South Africa risks losing value by exporting raw chrome ore.
- Government is weighing incentives to support ferrochrome revival.
South Africa’s ferrochrome industry, once a cornerstone of its mining economy, is edging closer to a potential lifeline. Glencore Alloys CEO Japie Fullard said this week he believes the sector is “fairly close to a possible solution,” as government and industry leaders search for ways to revive smelter operations threatened by high power costs and waning competitiveness.
South Africa, which produced about 27 million tons of chrome ore last year, converted only a fraction into higher-value ferrochrome, losing ground to rivals like China.
The country still holds the world’s largest chrome reserves, but logistical challenges, surging input costs, and an unfavorable energy regime have turned its once-powerful value-add advantage into a liability.
Government considers cheaper electricity solutions
Fullard highlighted ongoing discussions with government, including electricity tariff reforms and the inclusion of energy-intensive users like ferrochrome producers in special economic zones. Lower corporate taxes, targeted incentives, and cost relief could help address the current 10–15 cent per pound gap in conversion margins compared with Chinese rivals.
Ferrochrome demand outlook remains positive
Despite smelters lying idle, Merafe Resources executives stressed that global demand for ferrochrome remains intact. Stainless steel production is projected to grow by 3–4 percent annually between 2026 and 2029, lifting ferrochrome consumption in parallel.
Stocks are still being exported, and the restart of the flagship Lion smelter could come as early as next year, though possibly at reduced furnace capacity.
Industry pushes for ferrochrome revival
Industry leaders argue that ferrochrome is five times more valuable than raw chrome ore, making beneficiation critical to preserving jobs and revenue. But with South Africa exporting more low-value ore, foreign competitors are reaping the rewards.
“The recurring loss of value underscores the urgent need for fleet renewal and competitive energy pricing,” Fullard said, warning that without intervention, South Africa risks hollowing out one of its most strategic industries.
