Although the company asserts that its vanadium assets will continue to operate, the future of its chrome operations raises concerns.

On 2 September, Glencore reportedly launched a consultation-driven retrenchment process affecting its chromium and vanadium operations in South Africa. The move comes as the company faces multiple challenges, including power cuts, increased electricity costs, and broader economic pressures.

Although the process could affect thousands both directly and indirectly, no dismissals have yet been confirmed. The company continues to engage with unions and stakeholders as it evaluates its options.

Nonetheless, Glencore’s operations have faced challenges, leading to the suspension of production at the Boshoek, Wonderkop, and Lion smelters in May. The retrenchment process is expected to impact the Boshoek and Wonderkop smelters in Rustenburg. Furthermore, the Lion smelter is currently under review, and its operating capacity could potentially be reduced by half.

The company’s Rhovan vanadium operations in the North West province are also set to be impacted by the move, although Glencore recently stated in a letter to employees that the complex will continue to operate “with a new product mix and potentially a different structure”. It is believed that this implies that the company may shift its focus to the production of high-purity vanadium pentoxide (V2O5), almost completely abandoning the production of ferrovanadium.

However, according to Project Blue, as the operation produces primary vanadium and thus has one of the highest costs, such a move may not be economically justified.

Traditionally, South Africa was the third-largest supplier of vanadium to the global market, despite its declining share, which failed to recover after the EVRAZ Highveld operation shut down in 2015. Up until now, aside from Rhovan, supply was also attributed to Bushveld Minerals’ Vametco mine and Vanchem plant.

Following the sale of Vanchem at the end of 2024 and given Vametco’s current operational and financial challenges, the fate of Bushveld Minerals remains uncertain in the medium term.

Consequently, Rhovan may remain South Africa’s only operating vanadium asset for the foreseeable future. At the same time, vanadium exports from the country have steadily declined in recent years. In 2024, V2O5 exports reached just over 2kt (gross), 47% less than the volume exported in 2020.

Conversely, ferrovanadium exports increased by 60% compared to 2020, reaching 3.5kt (gross), but remained 61% below the export volumes observed in 2022, when a decline in supply from Russia related to sanctions led to higher prices in the global market, which South African exporters took advantage of.