The company is at the end of its financial tether, battling soaring electricity costs. In late December 2025, they announced looming retrenchments that could affect 600 workers, half of whom are contractors. 

The numbers run into the thousands when factoring in the total number of livelihoods impacted by the prospective closure of the smelter in eMalahleni. Transalloys Managing Director, Theo Morkel, confirmed to OFM that these consultations kicked off on Thursday (8/1). 

Smelting is an electricity-intensive process, and a quick response is needed from the government on the issue to avert permanent closures, Morkel explains. 

Reports indicate other smelters in the country are experiencing similar financial hurdles due to electricity prices. In the case of the manganese smelter, electricity accounts for 40% of its operations. 

South Africa’s last remaining manganese smelter, Transalloys, is consulting with labour on imminent large-scale retrenchments. Photo supplied

The issue becomes starker when comparing Transalloys’ operating costs to competitors outside the country in dollar terms. It costs their competitors in other countries, like China $150 to $250 per ton of product to process, whereas Transalloys is spending $500 per ton of product.

South Africa has 70% of the world’s manganese ore resources and a similar number of chrome resources. The International Manganese Institute estimates that only 2% of the manganese ore produced within the country is locally processed, and this is because of exorbitant electricity prices. 

Shipping ore to China for processing on the other end costs $25 per ton, reveals Morkel. The numbers paint a worrying picture of the future of the sector.

Glory days gone

In the early 2000s, South Africa had multiple smelters with the capacity to produce close to 850,000 tons of manganese alloys annually, explains the Transalloys MD. Today, there is one smelter left in the country with the capacity to produce 160,000 tons of manganese alloys annually.

The company argues more needs to be done to salvage the remaining businesses and the industry at large. “While Transalloys has previously welcomed government’s efforts to develop a sustainable energy pricing framework for energy-intensive smelters, the absence of certainty has now become the opportunity cost that threatens the business in totality. 

“Based on the information available, the proposed blueprint solution for ferrochrome smelters, at preferred pricing levels, would also be the correct solution for Transalloys. This could preserve what remains of manganese beneficiation in South Africa, with the potential to stabilise and even grow employment,” the company CEO Konstantin Sadovnik is quoted as saying.

OFM Business Hour mvh