The National Energy Regulator of South Africa (NERSA) has approved amendments to Eskom’s Negotiated Pricing Agreement framework, enabling interim concessionary electricity pricing arrangements for participating ferrochrome smelters.
The approval follows Eskom’s application submitted on April 10 and a public consultation process that included public hearings on May 25.
According to Eskom, the amended framework provides for different contract periods for participating companies with five-year agreements for Samancor Chrome and three-year agreements for the Glencore-Merafe Venture. The utility said the core pricing mechanisms and risk-sharing arrangements remain consistent across the agreements.
The decision provides a structured pricing mechanism for one of South Africa’s most electricity-intensive industries. Ferrochrome producers have long argued that rising electricity costs have undermined the competitiveness of local smelters, contributing to production curtailments and pressure on jobs and investment.
NERSA said the amendments are intended to support the sustainability of the ferrochrome sector while balancing the interests of electricity consumers and the broader economy.
Eskom stated that the financial impact of the arrangements will be ring-fenced and may not be recovered through standard electricity tariffs or the Regulatory Clearing Account mechanism.
Eskom’s Group Chief Executive Dan Marokane welcomed the approval, saying the utility’s improved operational performance enabled it to support the sector within a regulated framework.
“Without Eskom’s turnaround over past three years, we would not be in a position to support the ferrochrome industry or prevent job losses,” Marokane said.
“The framework was structured within a regulated environment and will not impose additional costs on standard tariff customers or taxpayers.”
Implementation details will be communicated to affected stakeholders following the regulator’s approval.
