South Africa's last manganese smelter, Transalloys, has issued notices putting 600 jobs at risk due to unaffordable electricity tariffs. The company struggles to compete globally as local power costs exceed those of rivals in China and Malaysia. Government interventions have aided the ferrochrome sector but excluded manganese producers.
Transalloys, the country's sole remaining manganese smelter, circulated Section 189 notices to employees over the festive period, signaling potential retrenchments of around 600 direct jobs. CEO Konstantin Sadovnik attributed the move to escalating energy tariffs that have made local beneficiation uncompetitive. "The business can no longer sustain operations under current conditions," Sadovnik stated, highlighting a lack of clarity on input costs as forcing the restructure.
Electricity represents the largest expense in smelting operations. South African producers face rates above R2.06 per kWh, more than double the R0.50 to R0.73 per kWh paid by competitors in China and Malaysia. "We pay more than twice as much for electricity [as] our global competitors," Sadovnik noted, adding that international competition has "simply become impossible" at these levels. As a result, Transalloys operates only two of its five furnaces, while Chinese capacity expands on cheaper, reliable power.
This crisis unfolds despite South Africa's dominance in manganese mining, which supplied over a third of global output in 2025—nearly double the next largest producer. The Kalahari Manganese Field holds the world's biggest land-based deposit. Yet, the industry falters as China controls 64% of global consumption and 90% to 96% of battery-grade refining capacity.
Government support has flowed to the ferrochrome sector, where Eskom signed a December memorandum of understanding with producers like the Glencore-Merafe Chrome Venture. This includes penalty waivers and tariff adjustments, prompting paused layoffs and restarted furnaces. Manganese smelters, however, remain outside these talks. Sadovnik emphasized that "manganese smelting has been excluded from the broader energy discussion."
Minister Gwede Mantashe has warned against South Africa becoming a mere raw ore exporter, but policy gaps persist. Future demand for manganese lies in electric vehicle batteries, projected to surge by 2030, yet refining for green markets requires low-carbon power. The Integrated Resource Plan 2025's 58% coal reliance hinders this, compounded by logistics woes from Transnet failures inflating costs by 30% to 50%. Without expanded interventions, Transalloys' operations—and those 600 jobs—hang in the balance.