{"id":848162,"date":"2026-01-18T07:28:44","date_gmt":"2026-01-18T05:28:44","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=848162"},"modified":"2026-01-18T07:33:28","modified_gmt":"2026-01-18T05:33:28","slug":"lifeline-for-important-south-african-employer-collapsing-in-front-of-everyones-eyes","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/848162\/lifeline-for-important-south-african-employer-collapsing-in-front-of-everyones-eyes\/","title":{"rendered":"Lifeline for important South African employer collapsing in front of everyone\u2019s eyes"},"content":{"rendered":"\n

A lifeline for some of South Africa\u2019s most important employers is in the pipeline, as the government steps in to help critical smelters that are buckling under current electricity prices.<\/p>\n\n\n\n

Last week, the Department of Trade, Industry and Competition (DTIC) gazetted block exemptions aimed at allowing firms in \u201cindustries in distress\u201d to collectively negotiate lower electricity prices with Eskom.<\/p>\n\n\n\n

The exemptions allow firms in distressed industries to collectively plan and enter into a negotiated pricing agreement (NPA) with Eskom without breaching the Competition Act. <\/p>\n\n\n\n

Kaamil Alli, spokesperson for Trade, Industry and Competition Minister Parks Tau, told<\/a> Sunday Times that the move was triggered by widespread job losses and the closure of smelters driven largely by high energy costs.<\/p>\n\n\n\n

Alli said the exemption aligns with broader government efforts to preserve industrial capacity and employment.<\/p>\n\n\n\n

He acknowledged that deindustrialisation is increasingly visible in the ferrochrome sector and that electricity prices are a key factor behind the decline.<\/p>\n\n\n\n

The exemption opens the door for companies to collectively purchase energy, secure alternative or backup supply, optimise energy use, and reduce costs.<\/p>\n\n\n\n

Under the proposed NPA framework, large energy-intensive customers could access discounted electricity tariffs to remain globally competitive and avoid closure.<\/p>\n\n\n\n

However, industry leaders warn that time is running out. Nellis Bester, chair of the Ferroalloy Producers Association, said smelters are facing imminent retrenchments if a competitive energy deal is not finalised urgently.<\/p>\n\n\n\n

\u201cAt this stage, nothing is in writing, and we hope that something will materialise before the end of February,\u201d Bester said.<\/p>\n\n\n\n

\u201cAll smelters will be contemplating retrenchments from March to April in the absence of this. Regulation changes give us options for competitive prices, but these options require government support.\u201d<\/p>\n\n\n\n

This is intended to keep smelters operating and prevent further job losses in energy-intensive sectors that are already on the brink of collapse.<\/p>\n\n\n\n

An essential industry under serious threat<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

South Africa\u2019s history with ferrochrome goes back more than 80 years, with the first industrial-scale production taking place in 1942 using small electric furnaces in Vereeniging.<\/p>\n\n\n\n

For decades, the industry has been a cornerstone of South Africa\u2019s industrial development, supporting mining, manufacturing, and thousands of downstream jobs.<\/p>\n\n\n\n

However, this important industry is now under serious threat. Rising electricity prices, persistent load shedding, and policy uncertainty have combined to place immense strain on the entire sector.<\/p>\n\n\n\n

Several smelters have already shut their doors, while others are fighting to survive in an environment that has become increasingly hostile to energy-intensive manufacturing.<\/p>\n\n\n\n

Donald MacKay, CEO of XA Global Trade Advisors, said<\/a> last year that the difficulties facing companies such as Glencore and Samancor reflect a broader crisis across heavy industry. <\/p>\n\n\n\n

While households and smaller businesses can turn to rooftop solar or generators, large industrial users do not have the same flexibility.<\/p>\n\n\n\n

Smelters and other energy-intensive operations depend on stable, affordable grid power, making them particularly vulnerable to Eskom\u2019s escalating tariffs.<\/p>\n\n\n\n

In some cases, electricity now accounts for as much as 40% of total production costs. <\/p>\n\n\n\n

The Energy Intensive Users Group of Southern Africa (EIUG) has warned that continued tariff hikes and pricing uncertainty have already forced some operations to close and discouraged new investment. <\/p>\n\n\n\n

Between 2007 and 2024, Eskom\u2019s tariffs increased by a staggering 937%, far outstripping inflation, which rose by 155% over the same period.<\/p>\n\n\n\n

The consequences have been severe. Government data show that around 14 smelters have shut down in recent years, resulting in significant job losses.<\/p>\n\n\n\n

In KwaZulu-Natal alone, more than 30 anthracite mining operations have stopped production as demand from smelters has collapsed.<\/p>\n\n\n\n

Ruan Nothnagel, chief commercial officer at Menar, said these companies have issued Section 189 notices, estimating that more than 30,000 jobs have been affected.<\/p>\n\n\n\n

Over one million tonnes of anthracite now sit in stockpiles, unable to find buyers. Across the wider industry, the damage is even greater. <\/p>\n\n\n\n

Experts have estimated<\/a> that between 300,000 and 400,000 jobs have already been lost as energy-intensive sectors contract or shut down entirely.<\/p>\n","protected":false},"excerpt":{"rendered":"

A lifeline for some of South Africa\u2019s most important employers is in the pipeline, as the government steps in to help critical smelters that are buckling under current electricity prices.<\/p>\n","protected":false},"author":92,"featured_media":845378,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[20371,1164,1998,853,24228,23622],"class_list":["post-848162","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-department-of-trade-industry-and-competition","tag-eskom","tag-parks-tau","tag-south-africa","tag-the-energy-intensive-users-group-of-southern-africa-eiug","tag-xa-global-trade-advisors"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/848162","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\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=848162"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/848162\/revisions"}],"predecessor-version":[{"id":848167,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/848162\/revisions\/848167"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/845378"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=848162"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=848162"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=848162"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}