South African utility Eskom on Friday said regulator Nersa has approved an interim discounted power tariff for struggling ferrochrome producers Samancor Chrome and a joint venture between Glencore and Merafe Resources.
A Nersa spokesperson confirmed the tariff at 0.62 rand ($0.0383) per kilowatt-hour to Reuters.
Eskom last month applied for regulatory approval for the discounted tariff, with a public hearing held earlier this week.
Agreement durations differ, Eskom said, with a five-year term for Samancor Chrome and three years for the Glencore-Merafe venture.
South Africa, the world’s biggest chrome ore producer, has lost its position as the top processor of chrome into ferrochrome to China mainly due to high electricity costs, with smelters hit by a roughly tenfold increase in power costs since 2008 that has forced dozens of plants to shut.
Eskom said the framework requires no additional government fiscal support and includes an equitable upside-sharing arrangement linked to market performance.
“The framework is structured within a regulated environment, includes appropriate risk-sharing mechanisms and does not place additional financial obligations on standard tariff customers or taxpayers,” chief executive Dan Marokane said.
Energy-intensive smelters combine chromium and iron to produce ferrochrome, which is mainly used in steel production.
($1 = 16.1958 rand)
(By Nilutpal Timsina; Editing by Olivia Kumwenda-Mtambo and Kirsten Donovan)
