Transalloys warns 600 jobs at risk as Budget looms without tariff relief

UP TO 600 jobs at Transalloys hang in the balance as the company warns it may be forced to retrench workers if the upcoming National Budget fails to deliver meaningful electricity tariff relief for the smelting sector.

- SIPHELELE DLUDLA

Transalloys is Africa's leading producer of manganese ferroalloys.

This comes as Merafe Resources last week also warned that an interim, lower electricity tariff approved by the National Energy Regulator of South Africa (Nersa) ERSA to ferrochrome smelters is insufficient for them to operate viably over the long term, and 3000 jobs remain at threat at the Glencore-Merafe Chrome Venture.

Transalloys CEO Konstantin Sadovnik on Tuesday said he was not optimistic that significant relief will be announced by finance minister Enoch Godongwana in the Budget on Wednesday, despite electricity being the company's single largest input cost and the decisive factor in global competitiveness in the ferroalloy market.

Should no relief materialise, Sadovnik said approximately 600 employees could lose their jobs, placing an estimated 7,000 livelihoods at risk when dependants and linked economic activity are taken into account.

Sadovnik said Transalloys, the last remaining manganese smelter in South Africa, contributes about R2.5 billion annually to the eMalahleni economy through procurement of local goods and services.

"Beyond the immediate job losses and downstream economic impact, shutting down the plant would wipe out a R5 billion strategic asset," Sadovnik said.