{"id":844875,"date":"2025-11-27T16:30:22","date_gmt":"2025-11-27T14:30:22","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=844875"},"modified":"2025-11-27T16:30:29","modified_gmt":"2025-11-27T14:30:29","slug":"dark-clouds-gather-over-an-important-south-african-industry","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/844875\/dark-clouds-gather-over-an-important-south-african-industry\/","title":{"rendered":"Dark clouds gather over an important South African industry"},"content":{"rendered":"\n

Trade union Solidarity warned of significant job losses at South African smelters and other related heavy industries due to government failures.<\/p>\n\n\n\n

It added that some of the employers will be forced to finalise their retrenchment processes within the next few weeks.<\/p>\n\n\n\n

These retrenchments could affect thousands of workers toward the end of this year or the beginning of 2026.<\/p>\n\n\n\n

According to Solidarity chief executive Dirk Hermaann, this loss of work is created by government failures.<\/p>\n\n\n\n

\u201cDespite the dark cloud of retrenchments hanging over us, we are experiencing a total lack of urgency from the government,\u201d he said.<\/p>\n\n\n\n

\u201cEmployers have been citing government failures as the main reason for the wave of retrenchments in the energy-intensive industries.\u201d<\/p>\n\n\n\n

He said the survival of ferrochrome smelters and the steel sector is threatened by unaffordable Eskom tariffs and Transnet\u2019s collapse.<\/p>\n\n\n\n

Transnet\u2019s poor performance means that only about 20% of transport to and from smelters is by rail.<\/p>\n\n\n\n

In the case of stainless steel exported to the USA, logistics costs account for as much as 50% to 80% of local production costs.<\/p>\n\n\n\n

The situation is exacerbated by the influx of cheap steel imports, particularly through dumping, and the imposition of export tariffs on South Africa.<\/p>\n\n\n\n

Apart from the job losses in the smelting and steel industries, other sectors, which include mining and vehicle manufacturing, are also affected.<\/p>\n\n\n\n

\u201cAll the reasons for the retrenchments are government failures that can be addressed. The first and fairly easy win is the electricity tariff structure,\u201d Hermann said.<\/p>\n\n\n\n

\u201cSince 2007, electricity tariffs for smelters have increased by 900%. 40% to 60% of the ferroalloy industry\u2019s costs are electricity.\u201d<\/p>\n\n\n\n

He said the electricity dispensation is destroying the industry, with all the downstream industries that follow.<\/p>\n\n\n\n

Companies in the smelting industry are suffering<\/h2>\n\n\n\n
\"\"<\/a>
Solidarity CEO Dirk Hermann<\/figcaption><\/figure>\n\n\n\n

The affected companies in the smelting industry include Ferroglobe SA, Transalloys, Samancor Chrome, Assmang, MMC Nelspruit, and Glencore-Merafe.<\/p>\n\n\n\n

Many other companies have already been plunged into retrenchment processes or have closed for similar reasons.<\/p>\n\n\n\n

ArcelorMittal is one such example, with approximately 4,000 direct and indirect jobs having been cut.<\/p>\n\n\n\n

Manufacturing at Columbus Stainless Steel was also severely affected in 2025, with production reduced by more than 50%.<\/p>\n\n\n\n

Ferroglobe\u2019s silicon smelter closed in September 2024, while its ferrosilicon production in Witbank came to a complete halt between April and September.<\/p>\n\n\n\n

Assmang\u2019s ferromanganese furnaces in Cato Ridge were permanently shut down at the end of May 2025.<\/p>\n\n\n\n

Transalloys in Witbank was operating at full capacity until recently, but is scaling down its production to only 40% from 1 December 2025.<\/p>\n\n\n\n

The prospects for a revival at Machadodorp and Meyerton appear unlikely under current economic conditions and electricity prices.<\/p>\n\n\n\n

While steel production is increasing in neighbouring African countries such as Zimbabwe, smelters in Angola and Zambia are encroaching on the local market.<\/p>\n\n\n\n

Glencore has completely shut down its ferrochrome operations across all of its plants, encompassing 22 furnaces.<\/p>\n\n\n\n

This move has already resulted in the loss of 1,500 jobs in Rustenburg and Lydenburg, affecting these struggling towns.<\/p>\n\n\n\n

Samancor has similarly reduced its capacity drastically, with only 4 of its 24 blast furnaces currently in production.<\/p>\n\n\n\n

The downsizing or closure of the ferroalloy industry will also have a huge impact on downstream industries in the steel industry and manufacturing sector.<\/p>\n\n\n\n

Employers are actively engaging with the government to negotiate solutions and are seeking urgent measures to save this industry.<\/p>\n\n\n\n

\u201cThis is going to develop into a social crisis. The government has caused it, and they must take responsibility,\u201d Hermann said.<\/p>\n\n\n\n

He added that it was not only companies which are affected, but also the communities relying on the money from these companies.<\/p>\n","protected":false},"excerpt":{"rendered":"

Trade union Solidarity warned of significant job losses at South African smelters and other related heavy industries due to government failures.<\/p>\n","protected":false},"author":10,"featured_media":844878,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[24271,2741,24272,24274,24002,1632,24273],"class_list":["post-844875","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-assmang","tag-dirk-hermann","tag-ferroglobe-sa","tag-mmc-nelspruit","tag-samancor-chrome","tag-solidarity","tag-transalloys"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/844875","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=844875"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/844875\/revisions"}],"predecessor-version":[{"id":844877,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/844875\/revisions\/844877"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/844878"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=844875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=844875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=844875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}