Transalloys (Pty) Ltd., the operator of South Africa’s only remaining manganese smelter, has warned that it may have to retrench up to 600 employees as escalating electricity prices threaten the viability of its operations. In a statement issued Monday, the company confirmed that retrenchment notices have already been served to staff.
Currently, Transalloys is operating only two of its five furnaces at its facility in eMalahleni, Mpumalanga—an area known for its coal resources. South African processors of ferrochrome and manganese—both critical components in steelmaking—are under severe pressure from two fronts: surging domestic electricity tariffs and intense competition from Chinese smelters.
South Africa holds approximately 75% of the world’s identified manganese ore reserves, yet local beneficiation is becoming increasingly unsustainable. “We are competing against international smelters whose electricity costs are roughly half of ours,” said Konstantin Sadovnik, CEO of Transalloys. “That gap makes sustained operation impossible.”
The manganese sector’s challenges mirror those in the ferrochrome industry. Earlier this month, Glencore’s ferrochrome division announced plans to shut down two operations. In November, labor union Solidarity revealed that Samancor Chrome Ltd. may cut nearly 2,500 jobs as it scales back production.
The South African government has acknowledged the crisis facing ferrochrome producers. In June, the cabinet approved a plan to negotiate revised electricity tariffs and consider imposing export controls and taxes on chrome ore. However, these reforms remain unimplemented, and the proposed export levy has drawn criticism from miners.
For manganese smelters, the situation is even more dire. “Manganese processing faces harsher conditions than the ferrochrome sector because it is more energy-intensive,” Sadovnik explained.
Without clarity on electricity pricing, Transalloys warns that it will have no choice but to proceed with restructuring by February. The company’s statement underscores the urgent need for policy intervention to prevent further erosion of South Africa’s value-added metals industry.
