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The operator of South Africa\u2019s last remaining manganese smelter said it may have to cut as many as 600 jobs as high power prices undermine the viability of its business.<\/p>\n
Transalloys (Pty) Ltd issued retrenchment notices to staff and is running only two of its five furnaces, the company, based in the coal-rich town of eMalahleni, east of Johannesburg, said in a statement Monday.<\/p>\n
\nSurging South African power prices, and competition from China have hit local processors of ferrochrome and manganese, both of which are key ingredients in steelmaking.<\/p>\n<\/blockquote>\n
The country has about three-quarters of the world\u2019s identified manganese-ore reserves.<\/p>\n
\u201cWe are competing against international smelters whose electricity costs are roughly half of ours,\u201d Transalloys chief executive officer Konstantin Sadovnik said in the statement. \u201cThat gap makes sustained operation impossible.\u201d<\/p>\n
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Read:
Eskom signs deal aimed at saving SA\u2019s shrinking smelter sector
Key ferrochrome bastion buckles under SA energy costs<\/p>\nGlencore\u2019s ferrochrome unit said earlier this month it would shutter two operations. In November, labour union Solidarity said Samancor Chrome Ltd may cut almost 2 500 jobs as it curtails operations.<\/p>\n
South Africa\u2019s government has acknowledged the pressures on the ferrochrome industry, with the cabinet approving a plan in June to negotiate new electricity prices and introduce potential controls and taxes on chrome-ore exports.<\/p>\n
Read:
Interim smelter plan to cost government R5.2bn
Glencore-Merafe retrenchments are another casualty of Eskom<\/p>\n\n\nADVERTISEMENT:<\/p>\n
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But the reforms have yet to be finalised and the export levy is unpopular among miners.<\/p>\n
Manganese processing faces \u201charsher conditions than the ferrochrome sector\u201d, given it is more energy-intensive, Sadovnik said.<\/p>\n
Without certainty on power pricing, Transalloys \u201cwill have no option but to proceed with restructuring around February\u201d, he said.<\/p>\n
\u00a9\u00a02025\u00a0Bloomberg<\/p>\n
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