The Glencore Merafe Chrome Venture has confirmed that it has submitted a “final counterproposal” to Eskom in relation to the terms and conditions associated with the electricity utility’s 62c/kWh tariff offer, describing Eskom’s current conditions as “commercially unworkable”.

Glencore Merafe confirmed the counter proposal in response to a statement by the National Union of Metal Workers of South Africa (Numsa), in which it denounced both Glencore Merafe and Samancor Chrome for pressing ahead with Section 189 retrenchment processes despite Eskom’s offer, which was made on February 27.

In a scathing statement, general-secretary Irvin Jim said Numsa would not allow any ferrochrome company to retrench workers after they had been granted the 62c/kWh electricity tariff for which they had campaigned with the help of their unions.

Jim also warned that Numsa could move to “interdict such intentions to retrench our members”, while also using the statement to outline a list of conditions in its possession that it argued were not in any way “alarming” from its perspective.

The conditions published by Numsa, outlined a five-year fixed-term contract, starting in April 2027, incorporating a transition from the interim relief phase toward standard cost-reflective pricing, with year-on-year escalations aligned to regulated tariff adjustments.

The list also included a deferred revenue recovery mechanism in case of early termination; an upside sharing mechanism based on commodity and margin improvements over the period; a restriction on the declaration of dividends during the support period; security and financial safeguards; and take-or-pay provisions rising from 70% to at least 80%.

Glencore Merafe made no comment on the substance of the conditions, but said it was currently engaged in “urgent discussions with Eskom and government regarding the terms and conditions”, which Eskom said would be made transparent in a submission to the National Energy Regulator of South Africa (Nersa), whose approval was required.

“After a careful review of the conditions attached to the proposed tariff solution, the Glencore Merafe Chrome Venture identified several of these conditions that would make it commercially unworkable, uncompetitive and unsustainable for our business,” the company said in its statement.

“In order for the terms and conditions to support the long-term viability of our ferrochrome operations, it must be reasonable and commercially sound to sustain stable production over the long term.

“The current conditions attached to the approved tariff solution unfortunately do not allow us to reopen our smelters on a competitive basis,” it added. 

Glencore Merafe revealed, too, that it had submitted a final counterproposal to Eskom on March 12, which it said aimed at ensuring a balanced and sustainable outcome for Glencore Ferroalloys.

“If endorsed by the board, the revised terms or conditions of the approved tariff solution will then be submitted to Nersa for final approval.”

Glencore Merafe also acknowledged the support it had received from its unions, including Numsa, when pursuing the discounted tariffs, describing that support as invaluable and much appreciated. 

It also noted that it had extended the Section 189 termination date to March 31 from February 28 and had continued to pay affected employees in full to date, despite the suspension of smelter operations since April 2025.

Nevertheless, the company confirmed that unless an agreement was reached with Eskom on commercially viable tariff terms, and unless the revised proposal is submitted to Nersa for approval within the required timeframe, it would proceed with the Section 189 terminations.

“This remains the last resort, and the Venture continues to do everything within its control to avoid this outcome,” the statement reads.