By Lars Schernikau and Vijay Jayaraj
South Africa’s once dominant ferrochrome industry is on the brink of collapse and requires a government bailout. That decline is not because the world no longer needs ferrochrome. It is because South Africa’s leaders tied their industrial policy to a “green” agenda that undermines reliable, affordable energy and sacrifices economic strength.
What is happening in South Africa should concern every country that still cares about manufacturing jobs, supply chains and energy costs for ordinary people.
Ferrochrome – made largely of chrome ore, coal products and with lots of electricity – is not a boutique commodity. Valued for its hardness and resistance to corrosion, ferrochrome is a critical component of stainless steel, the alloy used in the making of kitchen appliances, industrial tools, passenger vehicles and construction infrastructure. It is difficult to imagine modern manufacturing without ferrochrome.
All it took was for South Africa to build a leading stainless steel industry was its domestic access to this valuable commodity. South Africa has two strengths worthy of envy: the world’s largest known chrome ore reserves and a ferrochrome production base second only to China’s. That combination should secure the competitive advantage of South African ferrochrome. Yet, the industry is dissolving.
Reporting a decline of more than 25% in ferrochrome production from 2024 to 2025 wasGlencore PLC, a London-based titan in the sector that owns 80% of what was the world’s largest producer, the Glencore-Merafe Venture in South Africa.
The drop in the South African operation’s output – to 430,000 tons from 600,000 – stems from the government’s hostility toward coal and preference for technologies like wind turbines and solar panels – positions that ignore the fundamental laws of energy.
Robert Cartman, a senior analyst at Fastmarkets, predicts that South Africa’s total ferrochrome production could fall from 3.3 million tons in 2024 to a pitiful 1 million tons in 2026. At that point, South Africa ceases to be a major player. Mines will close. The expertise will migrate. The revenue will vanish.
Ferrochrome production is an energy-intensive beast that needs a steady, cheap power supply for electric arc furnaces, which won’t tolerate the intermittent whims of wind and solar. When the clouds roll in or the wind dies, a smelter operating at 1,700 degrees Celsius cannot simply “pause.”
Just as importantly, coal is not only a power source for this industry. Metallurgical coal is a chemical necessity that provides carbon as a reductant for stripping oxygen from chromium ore. Without coal, there is no ferrochrome.
There is no practical alternative to fossil fuels for the ferrochrome industry, but South Africa’s energy regime is discouraging the use of these economical energy sources and compromising the reliability and affordability of electricity.
Electricity rates have been rising for years. In 2025 alone, the National Energy Regulator approved an increase of nearly 13%, continuing a long trend of hefty hikes that stretch household budgets and corporate balance sheets.
While South African furnaces go cold, the demand for stainless steel continues to grow. However, a significant portion of the market has moved away from South Africa, allowing China to surpass it as the leading ferrochrome producer.
China understands what Pretoria has forgotten: Industrial dominance requires reliable, affordable power that can be dispatched when users need it, none of which can be provided by solar or wind. The Chinese government happily imports South African chrome ore, processes it using its own coal-fired power plants, and sells the finished ferrochrome to the world. South Africa is effectively exporting a large portion of its gross domestic product, outsourcing jobs to China and perpetuating domestic poverty.
Under the pressures of South Africa’s woke ESG (environmental, social and governance) demands, global investment firms and banks are abandoning the country’s resource sector. Coal-dependent industries in South Africa are deprived of insurance and financial services while massive amounts of coal fuel the Asian industrial machine.
It is a rigged game. South Africa tangles itself in “green” tape and “carbon” taxes to appease foreign elites, while global competitors double down on the fossil fuels necessary to build strong economies. South Africa’s newest Integrated Resource Plan 2025 (IRP2025) continues to favor wind and solar.
Electricity Minister Kgosientsho Ramokgopa recently admitted that skyrocketing electricity bills are hurting. “The Department of Electricity and Energy acknowledges that the rising cost of electricity presents a serious challenge to households, businesses, and the broader economy,” he said.
This admission is a rare moment of clarity from a government that usually deals in obfuscation. Whether promises of “policy and structural measures” to “over time” reduce the cost of electricity are ever fulfilled remains to be seen. What is clear is that the current trajectory means the complete collapse of the South African ferrochrome industry is a mathematical certainty.
Policies that aim to save industry after the damage is done are reactive, not strategic. South African leaders must pivot to an energy agenda that accepts the present reality: Coal and natural gas are indispensable for industrial competitiveness – at least until affordable, reliable, on-demand alternatives can match their performance and cost.
This commentary was first published by Real Clear Markets on January 7, 2026.
Dr. Lars Schernikau is an energy economist, entrepreneur, commodity trader, author, strategic advisor and member of the CO2 Coalition, Fairfax, Virginia. He is a coauthor of a recent analysis of South African energy policy. Vijay Jayaraj is an energy-environment analyst and Science and Research Associate at the CO2 Coalition.
Vijay Jayaraj is a Science and Research Associate at the CO2 Coalition, Fairfax, Virginia. He holds an M.S. in environmental sciences from the University of East Anglia and a postgraduate degree in energy management from Robert Gordon University, both in the U.K., and a bachelor’s in engineering from Anna University, India.
I do wonder if the PRC is financing the Greens?
Some for sure: https://www.foxnews.com/politics/ccp-tied-group-quietly-fueling-us-based-climate-initiatives-tax-filings
Because Rosneft was financing the German Green Party, and their anti coal
and anti nuclear drives. Surely the Chinese are as Machiavellian.
Yes, yes they are. As is Russia.
“Coal and natural gas are indispensable for industrial competitiveness – at least until affordable, reliable, on-demand alternatives can match their performance and cost.”
The part after the dash just confuses the entire subject regarding the ferrochrome industry. We are not talking Tootsie Rolls®.
The only affordable, reliable, on-demand alternative is a nuclear reactor.
South African politicians appear to be as stupid as UK and EU politicians when it comes to CO2.
Its amazing what a little bit of temperature bastardization can do to the intellect of some people.
That still leave the need for metallurgical coal for carbon as a reducing agent, a chemical commodity which has no substitute. Charcoal could be used, if one were willing to deforest South Africa, but carbon itself is irreplaceable (no, hydrogen isn’t an alternative). Wherever it comes from, the carbon used winds up as CO2 in the atmosphere.
South African politicians are more interested in self-enrichment. Collectively, if they had a brain cell between them, it would be lonely.
What the article leaves out: Incompetence and massive corruption in the destruction of the once world class electricity generator ESKOM.
There is nothing positive to be said about SA’s leaders.
They were presented with a rich, working nation. Now, they have stolen and confiscated, while chanting “kill the Boer”. The SA leaders have perverted and destroyed everything, but understood nothing.
The SA leaders closely resemble EU leaders.
Mandela policies set the precedent for the atrocities being perpetrated on the Boers in SA. The Boers have been marginalized in the on-going theft and destruction of what the Boers built.
America should offer humanitarian asylum to all SA Boers before they are slaughtered en masse, including the mining engineers, nuclear scientists, and others who built the industries which are being rapidly destroyed, evaporating and melting away in SA.
Zambia, and now Zimbabwe, belatedly, have recognized the expertise of the farmers, those same Boers Zimbabwe was killing and driving out, but who represented their greatest wealth – competence and the ability to perform.
China’s leaders have offered the Belt and Road Initiative – theft by bankruptcy – of Africa’s mineral and land wealth. The black SA-icans will remember the Boer SA-icans with fond regret when they are fully displaced and exterminated.
What the Boers build was an apartheid state where racism was obligatory. If they build anything they built it on the blood of the native Africans. The SA leaders where not presented with a nation they fought for it for decades until they finally got free and fair elections.
HMMM, a promo ad from the ANC party, I see.
That was their ancestors, 30+ years ago. A few black natives have been in charge since, lording it over the white natives who had nothing to do with apartheid, and the vast majority of their fellow black natives who are not part of the corrupt regime.
The Boers build a nation the WORKED, and was PROSPEROUS.
All gone now. !!
That is nonsense Izaak and you know it. The ANC has been the most useless governors of South Africa, they even have the same native Africans as before and are unable to advance their well being at all and in fact have more than doubled the unemployment rate. Your stereotypical response is just another attempt to justify the destruction you championed from the start. There were other alternatives to apartheid that would not have been so destructive but people like you who would never have to live with the consequences of the “solution” you sought and now wish to look virtuous while walking away from this catastrophe just as you did with Zimbabwe.
There are no native Africans there. Never mind that the suggestion that the civilisation was “built it on the blood of the native Africans” is ridiculous. Blacks migrated to SA to benefit from the Boer state. All of black Africa is progressing in reverse.
The “Boer” are in fact “native Africans”. If you want an education in South African history, I suggets you track down an excellent book written by an old school friend of mine and an elected politician in the Western Cape … the only non-ANC and viable government in the country. “Bulalah”, Cuan Elgin.
“America should offer humanitarian asylum to all SA Boers before they are slaughtered en masse”
This has been done.
AI Overview
Donald Trump, as President in 2025, offered asylum and prioritized resettlement for Afrikaners (white South Africans) facing discrimination, issuing an executive order citing South Africa’s land reform policies and racial discrimination as justification, leading to the first groups arriving in the U.S. under expedited refugee status, though the move sparked significant debate and varied reactions, with many Afrikaners expressing interest but others choosing to remain in South Africa. ”
end
Smash Capitalism by any means necessary is the Marxist cry. The ANC Marxists use a double barrelled method of Green crap and theft. South Africa is in deep economic trouble masked by the price of gold right now.
Coal was never able to deliver any kind of reliablity for South Africa in the past. With renewables the population has at least the possibility to take matters into their own hands.
You’re talking from a position of ignorance again.
South Africa built one of the world’s largest coal‑based power systems, and for many years it delivered stable, affordable electricity.
Coal still supplies around 77% of South Africa’s energy needs.
Historically, the system was highly reliable through the 1980s and 1990s.
And it has proven to be not sustainable. We have 2026 now.
Cheap Solar Is Transforming Lives and Economies Across Africa
The New York Slimes, that Grey Old Lady mouthpiece of truth /s
F- troll. Must try harder.
How long can you keep reality out? 2030? 2040?
We’ll see.
Right back at yer
You have entirely banished reality from your tiny mind.
He sort of reminds me of those movies where you see the drowning person getting further and further away from the surface.. of reality.
No, he hasn’t. No one is that stupid. His position is because he benefits from the big lie – if only because he’s a troll.
The NYT piece is misleading to say the least.
Official sources show coal remains a major employer and export earner; while imports of PV modules affect local manufacturing, installation, O&M, and financing create domestic economic activity not fully captured by module‑import figures. Ignored by the NYT.
Official South African statistics show coal remained the largest source of electricity in 2024, with coal generation rising year‑on‑year as Eskom’s fleet availability improved; renewables (solar, wind, CSP) produced a much smaller share of total energy in 2024 (around 18 TWh) compared with coal’s ~178 TWh.
Rolling blackouts are a daily occurrence in SA. What major international corporation will want to invest in such a nation?
And more lie spewing.
any use of solar is niche only… It is not changing anything because it is completely USELESS for more than half the day.
South Africa RUNS ON COAL (click on chart to see it unblurry)
Plus South Africa has the second highest number of coal mining for export projects underway in the world with 14 such projects, beaten only by Australia with 46, according to the IEA
Save for politics, South Africa would have remained the #1 coal exporter. We in Australia have benefited greatly from the demise of South African export industries, and have actively participated in it.
South Africas system worked very well before they went green, even a dipshit like you should know it.
South Africas mining shares would be 200% higher if they’d reliable energy supplies.
Now everything turns into shit there,just like everywhere else where people like you make energy policies.
The entire infrastructure system has collapsed as well organised thieves, government official implicated, have stripped any metal for scrap sales to China. Entire railway lines have been uprooted, transmission lines cut down (helped by ‘rolling blackouts’), massive pylons ‘mined’ for steel to the point of collapse … which assisted stripping copper transmissions lines, etc.
You just keep proving all you do is spew lies. Good job, buddy.
With anything in South Africa for the past 4 decades and currently, it’s definitely a case of “follow the money”.
And the rest of the money was stolen by government cadres.
For a comprehensive history of South Africa, I can recommend the book “Bulalah” by Cuan Elgin, an old school friend and current political representative in the province of the Western Cape. It is available at Amazon and he has a follow up book to that as well.