Glencore, led by Gary Nagle, in talks to rescue South African smelters

Glencore Plc, the Swiss commodities group led by South African executive Gary Nagle, will meet with the South African government this week in a bid to prevent smelters that produce a key stainless-steel ingredient from cutting thousands of jobs. The company’s local operations are under pressure from rising electricity costs and unreliable supply. 

Japie Fullard, chief executive of Glencore Alloys, said he will meet Electricity Minister Kgosientsho Ramokgopa on Friday to discuss ways to keep its joint venture with Merafe Resources Ltd. afloat. The venture converts chrome ore into ferrochrome, a critical material for global steel production. A ministry spokesperson confirmed the planned meeting. 

“Thousands of jobs are at stake,” Fullard said, adding that the plants can no longer compete against producers in China where electricity is cheaper. 

Power costs strain South Africa’s chrome industry

South Africa holds the world’s largest reserves of chrome ore, but its mining and metals industry has been battered by steep and unpredictable power costs. Supply shortfalls have already forced the closure of several furnaces, diverting a greater share of the stainless-steel supply chain to Asia. 

According to the Energy Intensive Users Group, electricity prices in the country have surged eightfold since 2008. The group’s members consume about 40 percent of the national grid. While Glencore has negotiated preferential tariffs with Eskom Holdings in the past, Fullard said the discounts remain insufficient. “The discount they gave us is not enough to be competitive toward China,” he said. 

Government response and industry impact

In June, the government approved a plan to stabilize the ferrochrome industry. The measures included revised tariffs and export controls on chrome ore, but the details have yet to be finalized. Until then, companies are absorbing the costs.

Glencore has already shut down its Rustenburg and Lydenburg smelters, with Fullard acknowledging the prolonged strain. “I’m still paying the people a hundred percent of their salary without creating one ton of ferrochrome,” he said. Keeping idle plants running is costing the company billions of rand, a burden it says it cannot carry indefinitely. 

Glencore’s global position

Founded in the 1970s, Glencore has expanded into one of the world’s largest resource groups, employing about 150,000 people across 35 countries. It is a major supplier of nickel, cobalt and copper—key inputs for electric vehicles, renewable power systems and other industries tied to the global energy transition. 

The company reported first-half 2025 revenue of $117.4 billion, little changed from a year earlier despite weaker coal prices and reduced copper output. Under Nagle’s leadership, Glencore has avoided large-scale asset sales, instead adjusting production to market shifts. 

Glencore has said it is considering job reductions at the joint venture if costs and competitiveness do not improve. The company recently announced plans to invest $13.5 billion in copper mining projects in Argentina, underscoring its focus on securing long-term supply for the clean-energy transition.