Transalloys issues retrenchment notice: A bleak outlook for South Africa’s last manganese smelter
Transalloys, South Africa’s last remaining manganese smelter, issued a Section 189 notice warning of possible large-scale retrenchments. The company said electricity costs have made sustained operations impossible.
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A bleak start to the New Year is looming for hundreds of workers at Transalloys, South Africa’s last remaining manganese smelter, after the company issued a Section 189 notice warning of possible large-scale retrenchments that could take effect within weeks.
The notice places approximately 600 direct jobs at risk and threatens an estimated 7,000 livelihoods linked to the smelter and the broader eMalahleni (formerly Witbank) economy through contractors, suppliers, and dependent businesses.
Transalloys chief executive Konstantin Sadovnik said the decision was unavoidable under current operating conditions. “We regret placing this level of uncertainty on our employees and their families at this time, but the ongoing lack of clarity around our operating environment leaves us with no responsible alternative,” he said.
Describing the announcement as “extraordinarily difficult” so close to the New Year, Sadovnik warned that the business can no longer sustain operations in its current form. “The company cannot sustain operations presently. Energy is our biggest cost driver,” he said. “At current NERSA-approved tariff levels, we are competing against international smelters whose electricity costs are roughly half of ours. That gap makes sustained operation impossible.”
Throughout 2025, Transalloys has operated intermittently as negative margins and sustained cash-flow pressure made continuous production unviable. The plant is currently running only two of its five furnaces. “This is a reflection of how things have deteriorated,” Sadovnik said.
He added that manganese beneficiation faces significantly harsher conditions than the ferrochrome sector, which has dominated recent public debate around electricity pricing and industrial policy. “Manganese smelting is far more energy-intensive,” he said. “Our position is further weakened by the fact that we are not an integrated producer and cannot cross-subsidise beneficiation from primary ore production.”
According to Sadovnik, a combination of unfavourable exchange-rate movements against the US dollar and euro, alongside high electricity costs, has rendered manganese beneficiation in South Africa fundamentally unsustainable. “Manganese ferroalloys are bulk commodities sold into highly price-sensitive global markets, where electricity costs are the single most decisive competitiveness factor,” he said.
While Transalloys has previously welcomed government efforts to develop a sustainable energy pricing framework for energy-intensive users, Sadovnik warned that the absence of certainty has now become an existential risk. “The lack of clarity itself has an opportunity cost, and that cost now threatens the business in totality,” he said.
He noted that, based on available information, the proposed blueprint solution being considered for ferrochrome smelters at preferential pricing levels would also be appropriate for manganese smelters. “This could preserve what remains of manganese beneficiation in South Africa, with the potential to stabilise and even grow employment,” he said.
However, uncertainty around implementation timelines, policy details, and the apparent exclusion of manganese smelters from current discussions is eroding the company’s ability to protect jobs. “Transalloys is hopeful that the issue will be resolved in the next two months and that implementation will be swift,” Sadovnik said. “Without that certainty, the company will have no option but to proceed with restructuring around February.”
Despite the dire outlook, Sadovnik said the company remains committed to exploring every possible avenue to limit job losses and maintain its social and economic obligations. “As a global manganese ferroalloys producer, we will continue to explore every possible avenue to preserve jobs, maintain social programmes, and meet our supply commitments,” he said.
He added that Transalloys stands ready to engage urgently with government, Eskom, NERSA, and trade unions to find a sustainable solution. “Time is the critical factor now,” Sadovnik said.