A section of the Glencore Merafe Chrome Venture. High energy costs and increased competition from China led to the suspension of smelting operations, but lower electricity tariffs had since improved the competitiveness of the smelter.
Image: Supplied
South Africa's last remaining manganese smelter, Transalloys, has stopped ferroalloys production, with no indication of when operations may resume - the shutdown affects 600 jobs and 7,000 downstream livelihoods.
Chief executive Konstantin Sadovnik said the company had no option but to shut down its furnaces after years of mounting financial losses while negotiations over electricity tariffs with Eskom and the government continue.
He said the suspension of smelting places around 600 permanent, well-paid jobs and an estimated 7,000 downstream livelihoods at risk as the company prepares to mothball the plant. Section 189 consultations and a collective retrenchment agreement have already been concluded.
The National Energy Regulator of South Africa (NERSA) on May 29, 2026 had finalised a reduced rate of 62 cents per kilowatt-hour to save jobs and protect struggling ferrochrome smelters. However, this benefit did not include the remaining non-ferrochrome smelters, namely manganese and ferrosilicon, which includes Transalloy.
For Transalloys, NERSA had approved a six-month relaxation of the Take-or-Pay requirement under its existing negotiated pricing agreement, which temporarily suspends the requirement for the company to consume at least 70% of contracted electricity volumes.
“This is not relief. It means while we are shut down, we are no longer obliged to pay Eskom 70% of our normal electricity bill for power we are not using,” said Sadovnik.
“We are still expected to pay R1.35 per kilowatt-hour, a price we have repeatedly told Eskom and NERSA since December is simply unaffordable. Our request for a similar tariff (to the ferrochrome industry) has simply been ignored. Without meaningful tariff relief, we have effectively been left to die,” said Sadovnik in response to Business Report questions.
“It has been a tough uphill battle. Our business has been losing substantial amounts of money for the past three and a half years. We have done everything possible to reduce costs, conserve cash, raise awareness, and engage government, Eskom, and the regulators to find and implement a sustainable electricity tariff solution,” said Sadovnik.
“Now our destiny is in the hands of Eskom, NERSA, and DEE, he said.
Sadovnik said a sustainable solution needed to be agreed by July 31 and implemented with urgency, as the company was unlikely to survive winter.
“It would trigger the irreversible collapse of the business, devastate jobs in eMalahleni, and permanently erase South Africa's manganese beneficiation industry, together with decades of specialised skills and expertise,” he said.
“It would also wipe out an investment currently valued at around R6 billion,” he added.
“The decision to mothball and retrench is not going to be taken lightly. We’ll stand for another round - in good faith, and in the expectation that the ongoing negotiations with Eskom can still result in a timely and sustainable solution. We have obtained a board mandate to withhold the issuing of retrenchment notices until July 31,” he said.
He said it was a defining moment for South Africa's industrial policy and whether value-added manufacturing still has a future in the country.
The shutdown follows Transalloys' hardship notice to Eskom and NERSA in December 2025. Since then, the ferrochrome industry has secured reduced electricity tariffs following negotiations with Eskom and had been granted intermediary reduced tariff solutions or retroactive tariff effects.
“We are pleased that our colleagues in the ferrochrome sector have reached a solution and can now focus on rebuilding their businesses,” Sadovnik said.
“What we do not understand is why that same blueprint cannot now be extended to the remaining non-ferrochrome smelters, namely manganese and ferrosilicon, which represent only 11% of the ferroalloys sector in terms of power consumption,” he said.
He said there were only three of these smelters left outside the scope of the NERSA solution, all of them a lot more energy-intensive than ferrochrome smelters and financially distressed.
Transalloys, through the Ferroalloys Producers Association (FAPA), has been engaging Eskom and the government to extend the electricity tariff framework agreed with the ferrochrome industry to the remaining manganese and ferrosilicon smelters.
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