Social unrest warning for South Africa
South Africa’s government and electricity minister, Kgosientsho Ramokgopa, have been warned that struggling businesses, as a result of high electricity prices, will lead to unrest in the country.
Important South African businesses, especially in the manufacturing and mining sectors, are facing closure due to the country’s unsustainable electricity price increases.
Years of rising tariffs, load shedding, and Eskom’s instability have pushed companies to the edge, with some already shutting down operations and cutting jobs.
The latest example comes from Glencore, one of the world’s largest commodity producers.
The company has started a retrenchment process at its Rustenburg ferrochrome smelter and vanadium operations because of soaring electricity costs and economic pressures.
South Africa holds around 80% of the world’s chrome ore reserves, making it a key player in ferrochrome, which is essential for stainless steel.
However, unreliable and expensive power has forced Glencore to suspend production at several smelters, including Boshoek, Wonderkop, and Lion, and to shut others in Rustenburg and Lydenburg, in recent years.
Glencore Alloys CEO Japie Fullard said the company will meet Electricity Minister Kgosientsho Ramokgopa to save its joint venture with Merafe Resources.
Phakamile Hlubi-Majola, spokesperson for the National Union of Metalworkers of South Africa (NUMSA), has warned that rising electricity tariffs threaten to spark social unrest as workers bear the brunt of these escalating costs.
Hlubi-Majola said the government has been slow to act on the tariff crisis, which has already devastated the ferrocrome industry.
NUMSA has accused the government of dragging its feet in resolving the electricity tariff crisis that has crippled the ferrocrome industry. The union has warned of possible mass action if urgent steps are not taken.
She explained that NUMSA has worked to bring stakeholders together to highlight the severity of the problem.
“From early on, once it became very clear to us that there was a challenge with the electricity tariff at Glencore, which was having a deep impact on their profits, the union got involved in trying to engage the government,” Hlubi-Majola said.
“We wanted to see if Eskom could provide a tariff that would be more affordable—a tariff that would not collapse them financially.”
South Africans have lost patience
According to Hlubi-Majola, electricity now accounts for more than 40% of production costs in the industry, a level she described as unsustainable.
She added that job losses are already mounting. “This problem has resulted in the closure of smelters and already 2,000 jobs have been lost,” she said, pointing to NUMSA’s past protest actions to demand lower tariffs.
Despite this, companies such as Glencore and Alma Investments have not withdrawn retrenchment notices.
“As of this week, consultations with the CCMA on job cuts have begun, and just from those two companies alone, we’re looking at over 2,100 jobs that could potentially be lost,” she warned.
Hlubi-Majola criticised the government for failing to act decisively despite assurances. “Our understanding is that the cabinet has approved this,” she said.
“So we are saying we don’t understand why the minister is taking so long to implement. The longer they delay, the more it justifies these companies proceeding with their plans to retrench.”
NUMSA’s members, she said, have lost patience. “Our members have been saying for months now that they want to embark on rolling mass action over this issue,” Hlubi-Majola explained.
“They have given the government an opportunity, but now they’ve reached a point of frustration. At some point, this rolling mass action will take place.”
She linked the crisis to what she described as a failed neoliberal agenda. “Eskom has been turned into a privatised entity, and the cost of privatisation is exactly what we’re discussing now,” Hlubi-Majola argued.
“We are facing high levels of job cuts because the tariff has become so exceedingly expensive.”
She contrasted South Africa’s approach with China’s, where heavy state subsidies for energy have supported industrial growth.
“China has guaranteed cheap energy for industry and for domestic use, and now they are benefiting from that,” Hlubi-Majola said.
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