The National Union of Metalworkers of South Africa (Numsa) has lodged a wage dispute at the Metal and Engineering Industries Bargaining Council over its demand for a 15% across-the-board wage increase against Samancor Chrome’s 6% offer, according to the statement.

Numsa announced that they are waiting for a strike certificate to be issued, with the intention to mobilise its members and shut down Samancor’s ferrochrome smelters. Samancor has operated ferrochrome plants since its inception and acquired further assets in 1989 and 1991, making it a prominent producer in the global FeCr market. Since 2015, Samancor has consolidated an additional three smelters under its umbrella, bringing its capacity to over 2Mtpy. The only other company at that scale is Glencore-Merafe.

Projects Blue estimates that Samancor and Glencore each currently produce around 14% of global ferrochrome production. South African ferrochrome operations were once the most cost-efficient operations but increasing costs from electricity tariffs and improving mechanisation at modern plants have eroded the cost advantage such that South African plants now tend to firmly sit in the upper half of the global cost curve. For Samancor, labour costs already account for a larger portion of total costs compared to its competitors and the demand by Numsa will put further strain on the company to remain competitive. High global energy and logistic costs in 2022 have provided some breathing space for Glencore and Samancor, but with ongoing investments in improved efficient ferrochrome furnaces in China, their positions as market leaders hang in the balance.