The Glencore Merafe Chrome Venture has announced that the Boshoek and Wonderkop ferrochrome smelters will be restarted, following the conclusion of the detailed terms and conditions of negotiated pricing agreements (NPAs) with Eskom.

The NPAs, Glencore Marafe said, gave full effect to the 62c/kWh tariff, which had been approved by the National Energy Regulator of South Africa (Nersa) for both the venture and for Samacor Chrome.

“The conclusion of the NPAs enables the restart of the Boshoek and Wonderkop smelters, marking a critical step in stabilising and rebuilding the venture’s smelting operations,” Glencore Merafe said in a statement.

“The revised NPAs provide a stable three-year electricity pricing framework, enabling greater operational flexibility and supporting the sustainable operation of the venture’s smelters.”

Glencore Merafe added that it was now focused on executing a safe restart while advancing a sustainable path forward for its operations and the broader sector.

Nersa approved the amended NPAs for Glencore Merafe and Samancor Chrome on May 29, after public hearings into Eskom’s applications on May 25.

Eskom confirmed during those hearings that it would not make a profit from the sale of electricity to the two ferrochrome producers at a tariff of 62c/kWh.

However, the State-owned company, which has returned to having surplus capacity following years of loadshedding, argued that the costs associated with forgoing the 12.8 TWh of yearly demand arising from the smelters would be larger and more damaging.

Eskom said the deal would allow it to avoid a R56-billion “downside risk” associated with take-or-pay coal contracts, while safeguarding R42.5-billion in revenue over the period of the smelter contracts, which also had take-or-pay commitments.

Earlier this week, Samancor Chrome cancelled a Section 189 retrenchment process at its smelters and indicated that it intended resuming production at all its smelters within six months.

Samancor Chrome would enter into a five-year contract with Eskom.

Meanwhile, Electricity and Energy Minister Dr Kgosientsho Ramokgopa indicated recently that he would be approaching Cabinet to seek approval to extend concessional electricity tariffs to other electricity-intensive industries.