The Lion Smelter in Steelpoort, Limpopo, achieved its first ferrochrome production tap on February 16, following the successful recommissioning of 50% of its operating capacity, says natural resources and mining company Glencore.

This milestone follows the National Energy Regulator of South Africa’s approval of a 12-month interim electricity tariff of 87.74c/kWh. The Glencore-Merafe Chrome Venture anticipates that the smelter will return to full operational capacity by the end of March.

However, while the interim tariff of 87.74c/kWh enables Lion Smelter to return to operation in the short term, it remains insufficient for it to operate sustainably over the longer term.

The same applies to Boshoek and Wonderkop smelters, Glencore says.

All three operations would require a tariff of 62c/kWh to operate on a commercially viable basis over the long term.

Therefore, the Glencore-Merafe Chrome Venture continues engaging constructively with all relevant stakeholders to secure a long-term solution that supports the stability and viability of all smelters.

The joint venture remains hopeful that a feasible tariff solution will be secured before February 28, the deadline for the retrenchment consultation process affecting the Boshoek and Wonderkop smelters and Glencore’s Carbon Division of Chartech.

“In the interim, the venture will continue implementing its current business restructuring, streamlining and right-sizing initiative to strengthen its long-term operational viability against a very challenging global market environment.”

Further, the venture reaffirms its commitment to working collaboratively with government, regulators, labour and community stakeholders to implement sustainable, long-term solutions that protect jobs, support local economies and secure the future of South Africa’s ferroalloys industry.

“All stakeholders are collaborating and working very hard to reach a sustainable solution, especially Eskom, labour organisations and the Department of Energy and Electricity,” says Glencore Ferroalloys CEO Japie Fullard.