South Africa’s last manganese smelter on the brink as high power costs weigh

Transalloys, which operates South Africa’s last functioning manganese smelter, may have to close the plant and cut hundreds of jobs if its soaring electricity costs are not brought down, its CEO said on Tuesday.

More than a dozen smelters have shut down in South Africa in recent years, citing high electricity costs, leading to thousands of job losses.

Transalloys CEO Konstantin Sadovnik told local television station Newzroom Afrika on Tuesday that the business has been loss‑making for about three years, mainly due to sharply rising power costs, which make up nearly 40% of total expenses.

The company plans to cut about 600 direct jobs, a move that could impact as many as 7,000 livelihoods in the broader economy of the eMalahleni municipality, where it is based. “Their jobs are indeed on the line,” said Sadovnik.

He said the plant could be mothballed pending a near‑term solution or closed permanently, depending on whether manganese smelters are included in a proposed electricity pricing framework being discussed by the government and the ferrochrome industry.

South Africa is the world’s largest producer of manganese, which is used in steel-making, but exports most of the mineral in ore form due to limited smelting capacity.

The country’s energy regulator Nersa is currently reviewing an interim power tariff adjustment for struggling smelters in the ferrochrome sector, with the government also working on a longer-term mechanism to support competitive pricing.

“Energy is our biggest cost driver,” Sadovnik said, adding that Transalloys is competing against smelters abroad whose electricity costs are “roughly half” of South Africa’s regulated levels.

The company hopes for a resolution within the next two months. Restructuring would proceed around February if no solution is found.

(By Sfundo Parakozov and Nelson Banya; Editing by Jan Harvey)