Local chrome producers warned on Monday that more than 600 jobs were on the line, citing the ongoing struggles at ailing-state entity, Eskom, as the primary reason for the looming retrenchments.
According to a statement by partners, Glencore and Merafe Resources, the looming job cuts are a result of incompetence at Eskom, with continual power outages and rising electricity tariffs hurting business operations.
“The consultation process is as a result of deteriorating operations and market conditions across the South African ferrochrome industry, including unsustainable electricity tariffs and interruptions, cross subsidies and real cost inflation,” Merafe said.
“These factors have also led to the displacement of significant volumes of ferrochrome production to lower-cost competitors overseas.”
The partners confirmed that approximately 665 jobs were being taken into consideration at their Rustenburg ferrochrome smelter, which pumps out over 400 000 tonnes of ferrochrome a year.
“Despite significant investment to make the operation more competitive, the Rustenburg smelter has suffered material financial losses which are expected to continue for the foreseeable future,” the statement concluded.
The potential job cuts do not bode well for South Africa, with the country’s unemployment rate at a staggering 29%.