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News24 Business reports that SA’s ferroalloy operators are backing a proposed solution to the imminent crisis in the sector that requires no government or Eskom subsidies. Meanwhile, thousands of jobs could be lost unless a sustainable solution to the crisis in the sector is found soon.
Ferrochrome producers, including Glencore and Samancor Chrome, have tabled a proposal that would allow embattled smelters to continue operating while a longer-term, sustainable pricing arrangement is finalised. Apparently the proposal involves lower power prices – but with a mechanism that does not rely on Eskom or the government to subsidise the lower prices. The proposed solution is under evaluation by Kgosientsho Ramokgopa, the minister of electricity and energy, and Eskom. It was put forward by the Ferro Alloys Producers Association (FAPA) in a last-ditch effort by industry after the government failed to come up with an intervention that would enable smelters to continue running.
FAPA has declined to provide any further details on the proposal while awaiting approval from Ramokgopa and Eskom, which is expected within the next few days. Implementation requires agreement between the minister and the utility on an appropriate pricing framework. The solution is intended to act as a bridge while smelter operators explore longer-term remedies, including procuring renewable energy to reduce dependence on Eskom and mitigate exposure to future carbon-border taxes, such as the EU’s Carbon Border Adjustment Mechanism.
- Read the full original of the report in the above regard by Lisa Steyn at News24 Business (subscription / trial registration required)
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