Business
South Africa Loosens Rules to Save Jobs from Eskom Prices
South Africa has made a rare and quietly significant policy shift in an attempt to stop thousands of industrial jobs from disappearing under the weight of Eskom’s soaring electricity prices. It is not a bailout, and it is not a subsidy. Instead, it is a loosening of competition rules that allows struggling industries to work together in ways that were previously off-limits.
At the centre of the change is a new interpretation of the Competition Act that gives distressed sectors more room to breathe. The goal is simple. Keep factories open. Keep furnaces hot. Keep people employed.
Why government stepped in now
On 5 January, Trade, Industry and Competition Minister Parks Tau published updated regulations that expand an existing energy users block exemption. In plain terms, this allows companies in industries under severe pressure to cooperate when it comes to securing electricity.
These firms can now jointly negotiate power supply deals, share ownership of backup generation, such as generators or alternative energy plants, and engage suppliers as a collective. What they still cannot do is collude on the prices of their goods or services.
It is a narrow but powerful adjustment, designed to prevent the collapse of sectors where electricity costs make or break viability.
Ferrochrome and manganese at breaking point
While the regulations do not name specific industries, the timing leaves little doubt about who this is meant to help. South Africa’s ferrochrome and manganese processors have been warning for months that they are running out of options.
Electricity prices in South Africa have roughly tripled over the past 15 years, rising far faster than inflation. For energy-intensive operations like smelters, this has been devastating. Add to that years of unreliable supply and repeated power cuts, and many plants have been forced to idle operations or shut down entirely.
South Africa holds around three-quarters of the world’s known manganese ore reserves, yet local processors struggle to compete with cheaper production in China. Instead of beneficiating minerals locally and creating jobs, the country risks exporting raw materials while factories at home go dark.
Real jobs already on the line
The human cost is no longer theoretical. In late December, Transalloys, which operates the country’s last remaining manganese smelter, warned that up to 600 jobs could be lost due to energy costs.
Earlier, Glencore confirmed it would close two ferrochrome operations. In November, labour union Solidarity said Samancor Chrome could cut nearly 2,500 jobs as production is scaled back.
Across mining towns and industrial hubs, these announcements have sparked anxiety and anger. On social media, workers and local businesses have questioned how a country rich in minerals can allow energy prices to hollow out entire communities.
A workaround born from Eskom’s failures
This policy shift also reflects a broader reckoning with Eskom’s long-running crisis. Since 2008, South Africa has battled an inconsistent electricity supply linked to mismanagement and corruption at Eskom, which still generates more than 80 percent of the country’s power.
Years of daily power cuts through 2023 damaged confidence, slowed growth, and pushed many firms to the brink. While load shedding has eased, the financial pressure has not. Electricity remains one of the biggest operating costs for heavy industry.
By easing competition rules, the government is effectively acknowledging that market purity means little if entire sectors collapse.
What happens next
In June, the cabinet approved a broader plan to renegotiate electricity pricing and consider new controls and taxes on chrome ore exports. Together with the updated competition exemption, this suggests a more interventionist approach is taking shape.
The risk is that these measures arrive too late for some operations. The opportunity is that cooperation could buy time for industries that still have a fighting chance.
For now, the message is clear. South Africa is willing to bend its own rules to protect jobs, even if it means rethinking how competition works in an economy strained by power costs.
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Source: Daily Investor
Featured Image: BusinessTech
