Eskom seeks tariff lifeline for South Africa’s last manganese smelter

Stephen Grootes interviews Nellis Bester, chairperson of the Ferroalloy Producers Association about Eskom’s request to grant Transalloys temporary tariff relief, as the country’s last remaining manganese smelter faces mounting financial pressure from high electricity costs. 

Listen to the interview in the audio player below the article.

Eskom has asked the National Energy Regulator of South Africa (Nersa) to give Transalloys temporary relief on its electricity tariff.

Transalloys, located in eMalahleni is South Africa’s last remaining manganese smelter.

The request is part of ongoing efforts to support energy-intensive industries that are struggling with high electricity prices, which have weakened the country’s industrial sector.

Transalloys operates a R5 billion plant in Mpumalanga, but the business is under serious pressure due to rising electricity costs. Hundreds of jobs, including both permanent staff and subcontractors, are at risk.

Eskom has asked Nersa to temporarily adjust the company’s negotiated pricing agreement for six months.

According to Nersa, Transalloys’ financial situation has actually worsened instead of improving.

The company has been running at a loss for the past three years, draining its cash reserves. High electricity costs have made its products too expensive to compete globally.

Speaking to Stephen Grootes on The Money Show, Nellis Bester, chairperson of the Ferroalloy Producers Association believes a solution could potentially come from Eskom.

"If you look at the current state of Eskom, it's generating money, it's got a positive bank balance or increasing revenues, and then there's excess power available..."

- Nellis Bester, chairperson - Ferroalloy Producers Association

"There can be an option of supplying a competitive tariff to all the beneficiating smelters in South Africa, One just needs to agree on the terms an conditions, and that is what is delaying the deal a bit..."

- Nellis Bester, chairperson - Ferroalloy Producers Association

"I think the question remains, what remains affordable and what does not remain affordable? And for that reason, each and every company needs to sit down with Eskom and negotiate these terms."

- Nellis Bester, chairperson - Ferroalloy Producers Association