Specialist alloy producer Afarak Group PLC has entered talks with employees at two of its South African operations about possible retrenchments, as a result of increased operational expenses caused by public power utility Eskom Holdings SOC Ltd.'s power outages and the deterioration of chrome ore and ferrochrome prices.

The company said in June that these two challenges led to its decision to suspend two ferrochrome arc furnaces in Mogale, and that it was in talks with workers about how to protect the asset and safeguard jobs. Afarak has now issued a Section 189 notice and will embark on a 90-day consultation period with employees and their representatives at its Mogale and Ilitha operations regarding the possible retrenchments.

Eskom announced countrywide stage 6 load shedding Dec. 9, which forced Petra Diamonds to close its operations at its Cullinan, Finsch and Koffiefontein mines in South Africa, bringing all employees to the surface with the exception of those pumping water out of the mine.

Eskom attributed the capacity problems to coal-feeding issues at the Medupi power station, and flooding at both the Kriel mine and power station as a result of heavy rains, which also impacted infrastructure. Load shedding was brought back to stage 4 on Dec. 10.

S&P Global Ratings recently said it did not believe Eskom's restructuring could be completed by the 2022 target, saying it will require changes across the board, while affirming its CCC+ global scale ratings with a stable outlook for the power supplier on Nov. 26.