The last remaining manganese smelter in South Africa is fighting for its lifeand the livelihoods of thousands hang in the balance.
Transalloys, based in eMalahleni, has warned that without meaningful electricity tariff relief, it will be compelled to retrench approximately 600 employees, placing an estimated 7,000 livelihoods at risk.
CEO Konstantin Sadovnik said ahead of the upcoming national budget that he is not optimistic that relief for the wider smelting sector will be announceddespite the company’s urgent engagements with Eskom, government, and other stakeholders since October 2025.
The Scale of What’s at Stake
Transalloys is not just any industrial facility. It is South Africa’s sole remaining manganese smelter, operating in a country that holds roughly 80% of the world’s known manganese resources.
The plant contributes around R2.5 billion annually to the eMalahleni economy through the procurement of local goods and services.
“Beyond the immediate job losses and downstream economic impact, shutting down the plant would wipe out a R5 billion strategic asset,” Sadovnik said.
“It would represent an irreversible loss of manganese beneficiation capacity in a country that holds roughly 80% of the world’s known manganese resources and severely damage the investment climate in South Africa.”
The Energy Intensity Problem
Electricity remains the company’s single largest input costand the decisive factor in determining global competitiveness in highly competitive ferroalloy markets.
While ferrochrome smelting has received tariff relief, silicomanganese smelting is about 30% more energy-intensive, Sadovnik said.
“If Transalloys is granted relief on par with that expected for ferrochrome, manganese smelting can be saved.”
Earlier, Glencore CEO Gary Nagle expressed confidence that the ferrochrome sector’s requirement of a 62c per kilowatt-hour energy tariff would be met before the end of February.
Sadovnik said a 62c/kWh tariff would align with the 3 to 4 US cents per kilowatt-hour range paid by globally competitive smelters in jurisdictions such as the US, Norway, and Malaysia.
“Ironically, South Africa is losing competitiveness to countries that lack our resource base but have proactively structured energy solutions to capture the socio-economic benefits of beneficiation,” he said.
Interim Relief, Long-Term Reform
The proposed tariff reduction, Sadovnik emphasised, would serve as an interim measure.
“It is an immediate bridge while a long-term energy solution is being developed. It would provide much-needed breathing space, not only for Transalloys but for the broader ferroalloys sector.”
Both short-term relief and long-term reform must be considered within the broader fiscal and industrial policy framework likely to be outlined in the budget, he added.
“Electricity pricing reform for energy-intensive sectors is not a concession. It is an investment in preserving productive capacity, export earnings, tax revenue, and maintaining an attractive investment climate. A competitive framework strengthens the national balance sheet over time.”
The Domino Effect
Sadovnik warned that smelter closures would trigger a cascade of consequences.
The ferroalloy value chain is widely reported to support approximately 300,000 direct and indirect employment opportunities.
“A consolidated ferroalloys sector likely represents Eskom’s largest customer. Smelter closure, conversely, would have a domino effect forcing Eskom to cut back power generation, spreading its fixed costs and huge debt burden over a smaller number of paying customers, and consequently pushing upstream coal miners to close.”
The Bottom Line
Transalloys has done what it can: engaged, pleaded, presented the numbers. Now it waits for the budget speech.
If relief comes, the smelter breathes. If not, 600 jobs vanish, a R5 billion asset is at risk, and South Africa takes another step toward becoming a raw materials exporternot a beneficiator of its own vast resources.
The ironies are bitter. The country with 80% of the world’s manganese may soon be unable to smelt it. And the electricity that could keep the furnaces burning may be priced out of reach.
