Although production at South Africa’s last operating manganese ferroalloys smelter – that of manganese ferroalloys producer Transalloys – has stopped, the asset is still well positioned to quickly restart operations should the underlying issues of high electricity tariffs from State-owned power utility Eskom and discussions with government about industrial policy reforms produce positive outcomes, says Transalloys CEO Konstantin Sadovnik.

The smelter was closed on July 1, 2026 with no indication of when operations would start up again, or if the smelter would be placed under full care and maintenance.

He explains that although the Mpumalanga-based furnaces are not currently fired up, Transalloys has not yet implemented any workforce reductions and maintains full adherence to health, safety and environment standards, while all environmental compliances are still in place.

This means all the legal requirements to operate the smelter and the human resources can be leveraged to return the asset to full operationality in a short timeframe.

Other operational components, such as working capital, maintenance and raw material supply – which are critical operational factors – can be attained within short notice of the restart of the furnace’s operation, states Sadovnik.

“This demonstration of sustainable operational capacity means we can start up almost immediately, once a permanent or temporary energy solution is agreed and implemented,” he says.

However, Sadovnik stresses that if Transalloys were to put the smelter plant into care and maintenance, its revival will be put onto an extended timeframe with increasingly challenging startup requirements the longer it remains mothballed.

Regarding a potential extended mothballing or permanent closure of the plant, he says there are two identifiable trigger points that would leave Transalloys with no other choice but to temporarily or permanently shut down the operation, the first being when the board determines that negotiations with Eskom on electricity tariffs have failed.

The second relates to tariffs. He says even though the prospect of a tariff solution may still exist, there is no timing certainty for the outcome, while there is a risk of the business being pushed into insolvency as a result of prolonged losses and mounting cash-flow pressures. Sadovnik says this means the company does not have the luxury of unlimited time to conclude negotiations, adding that “there is a high risk that if Transalloys shuts down, it will never restart.”

Transalloys has received an undertaking from Eskom that a possible solution is still being developed. However, Eskom has provided no timeline for this resolution. There is also no certainty of a positive outcome, he says.

Starting the Smelter

It is estimated that a smelter of Transalloys’ size would require about R1.65-billion in start-up capital, that is required for essential maintenance, to ensure environmental compliance, to reinstate working capital and to acquire the raw materials required to start manganese beneficiation operations after mothballing.

When bringing the business out of conservation, investors would need certainty not only on the power tariff, but also on the returns they could expect on the capital invested, says Sadovnik.

Because Transalloys has completely exhausted its internal financing options, he says the company is urgently seeking clarity from Eskom’s officials to determine if the business can survive until a solution is implemented.

Potential relief options, Sadovnik explains, include government credits or grants, similar to those provided to steelmaker ArcelorMittal South Africa, or temporary energy price relief from Eskom and energy regulatory authority the National Energy Regulator of South Africa – mirroring the relief granted to the ferrochrome sector at 87.74 c/kWh on January 1, 2026.

“Without immediate clarity on Eskom’s internal timeline and a clear prospect of a positive resolution, the Transalloys board will face an imminent decision regarding staff retrenchments and placing the plant into care and maintenance,” concludes Sadovnik.