Major South African smelter restarts after power tariff relief

South African ferrochrome plant Lion Smelter has resumed operations following a nine-month shutdown after a one-third cut in power costs, its co-owner said on Wednesday, urging more reductions to ensure the plant’s long-term viability. More than a dozen smelters have shut in recent years in South Africa – the world’s biggest producer of chrome ore or chromite – leading to thousands of job losses. The closures have been blamed largely on high electricity costs, which have surged by more than 900% since 2008 according to the Minerals Council South Africa.

Lion Smelter’s co-owner Merafe Resources said in a statement that South Africa’s energy regulator had approved the 35% reduction in electricity tariffs, allowing a restart of the power-hungry smelter, owned by a joint venture between Merafe and Glencore. The plant had been shut down in May 2025 along with two other smelters managed by the partnership. Yet the reduction of electricity costs, from 1.36 rand ($0.0851) per kilowatt hour to 87.74 South African cents per kilowatt hour, allowed Lion Smelter to return to operation, but was not enough for the long term, Merafe said.

The same applies to the Boshoek and Wonderkop smelters, which remain mothballed, the company added. “All three smelter operations would require a tariff of 62c per kWh to operate on a commercially sustainable and viable basis over the long term,” Merafe said. South Africa had been the world’s biggest chrome ore processor but the smelter closures meant it lost its position to China.

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The Glencore-Merafe venture suspended formal processes to lay off thousands of workers at the mothballed smelters late last year as it pursued negotiations with the authorities on discounted power tariffs. Merafe said it hoped to reach a long-term agreement on power costs by February 28, the deadline to resume the job cut procedures.

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