Eskom Seeks Tariff Relief to Keep Transalloys AfloatJobs of 600 at Risk

Eskom has asked the National Energy Regulator of South Africa (Nersa) to grant Transalloys , the country’s last remaining manganese smelter, temporary tariff relief.

This comes as authorities continue a piecemeal approach to shielding intensive energy users from the broken energy pricing framework that has hollowed out the country’s industrial base.

The Crisis

Transalloys’ R5 billion plant in Mpumalanga is in peril, weighed down by hefty electricity prices. The jobs of hundreds of direct employees and subcontractors are on the line.

Eskom has asked the regulator for a temporary amendment to the negotiated pricing agreement (NPA) take-or-pay (TOP) terms applicable to Transalloys for six months.

The TOP requirement means Transalloys must consume a minimum amount of electricity per quarter. If consumption falls below that threshold, it remains liable for payment based on the minimumregardless of market conditions.

Eskom requests that the TOP requirement of 70% be temporarily relaxed to give the company a chance to survive.

The Deterioration

“Despite expectations that conditions would improve during the implementation of the NPA, the situation has instead deteriorated, leaving the company with depleted cash reserves after operating at negative margins for the past three years,” Nersa said in a public consultation document.

“The high electricity costs have rendered Transalloys uncompetitive, leading to a significant build-up of unsold stock whenever the plant operates at full capacity.”

In December 2025, Transalloys suspended three of its furnaces, reducing its operational capacity to approximately 57% .

“There is a risk that Transalloys may terminate the current NPA, which could result in permanent loss of jobs and reduced electricity sales to Eskom.”

The Decline

In the early 2000s, South Africa was home to several smelters with capacity to churn out about 850,000 tonnes of manganese alloys annually.

Now, Transalloys is the only player still standing, with capacity to produce about 160,000 tonnes annually despite South Africa being home to more than 75% of the world’s identified manganese ore reserves.

The Employment Impact

Transalloys directly employs 282 people and 301 subcontractors , supporting additional indirect jobs.

The Ferrochrome Crisis

Workers in the Glencore-Merafe Chrome Venture are also waiting with bated breath. The joint venture has delayed retrenchment of 2,500 workers after Eskom asked for a one-week extension.

The venture said it was awaiting internal governance approvals. The proposed 62c/kWh tariff has been approved in principle, but terms and conditions are being finalised.

The Bottom Line

South Africa has the ore. It has the smelter. It has the workers.

But without affordable electricity, the last manganese smelter may not survive. Eskom is asking for temporary relief. The clock is ticking.

{Source: BusinessDay}

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