South Africa’s deepening electricity pricing crisis has sparked fresh fears of large-scale job losses after Transalloys, a major manganese ferroalloy producer based in Mpumalanga, announced plans to shut down parts of its operations due to unaffordable power costs. The move could lead to the retrenchment of about 600 workers and threaten an estimated 7,000 livelihoods linked to the smelter and the broader eMalahleni supply chain.
The Congress of South African Trade Unions (Cosatu) has reacted sharply to the announcement, warning that rising Eskom tariffs are bleeding energy-intensive industries dry and accelerating deindustrialisation. With South Africa’s unemployment rate standing at 42.4%, Cosatu said the country cannot afford further job losses in strategic sectors.
Cosatu parliamentary coordinator Matthew Parks said the federation is deeply concerned about the potential closure, not only because of the immediate impact on workers, but also because of the long-term damage to South Africa’s industrial capacity. He noted that the loss of smelters has ripple effects across downstream industries and local economies that depend on them.
Cosatu has called for urgent engagement between Eskom, Transalloys, the Presidency and the Department of Trade, Industry and Competition to reach a mutually affordable short-term electricity tariff agreement. Parks pointed to similar arrangements previously negotiated with Samancor and Glencore, arguing that a comparable solution is needed immediately to prevent retrenchments.
Transalloys chief executive Konstantin Sadovnik said the company has been left with no responsible alternative given the lack of clarity and relief on electricity pricing. He explained that energy is the smelter’s single biggest cost driver and that, under current Nersa-approved tariffs, Transalloys is competing against international smelters whose electricity costs are roughly half those in South Africa.
According to Sadovnik, sustained operation under these conditions is impossible. Throughout the year, the company has been forced to operate intermittently as negative operating margins and severe cash-flow pressure made continuous production unsustainable. At present, only two of the smelter’s five furnaces are running.
He added that broader market pressures, including exchange-rate challenges against the dollar and euro, have further undermined the viability of manganese beneficiation in South Africa. While Transalloys has previously welcomed government efforts to develop a sustainable pricing framework for energy-intensive smelters, the absence of certainty around implementation has now become a direct threat to the business.
Sadovnik said a proposed blueprint solution for ferrochrome smelters, if extended to manganese producers at appropriate pricing levels, could help preserve what remains of the sector and potentially stabilise or even grow employment. However, uncertainty around timing and the current exclusion of manganese smelters from detailed discussions is eroding the company’s ability to protect jobs. Without swift resolution, he warned, Transalloys may be forced to proceed with restructuring as early as February.
Community groups have also raised concerns about the broader consequences of a potential shutdown. Sabelo Mnguni, national coordinator of Mining Affected Communities United in Action (Macua), said retrenchments would have devastating effects on workers and their families, but stressed that the crisis goes beyond jobs. He warned that downsizing or closure of a large smelter carries serious community and environmental implications, especially in areas already burdened by pollution and unmet rehabilitation commitments.
Mining analyst David van Wyk linked the retrenchment threat to wider structural challenges in South Africa’s minerals and metals sector, including policy uncertainty and rising costs. He noted that the iron, steel and ferrochrome industries have sharply declined, while neighbouring countries such as Zimbabwe are moving ahead with new large-scale steel projects.
As pressure mounts, Cosatu has renewed calls for government intervention to stabilise Eskom’s finances by tackling corruption, wasteful expenditure and revenue leakages, while accelerating reforms such as prepaid metering and investment in renewable energy. The federation argues that without decisive action, escalating electricity tariffs will continue to destroy jobs, weaken industrial capacity and undermine prospects for economic growth.
