South Africa's ferroalloys industry is experiencing accelerating decline driven by structural cost disadvantages that threaten hundreds of thousands of skilled jobs, according to Ferro-Alloy Producers Association chairperson Nellis Bester, speaking on August 28, 2026. The sector's deterioration stems from a combination of factors including uncontrolled electricity price escalations, lack of protective duties on imported alloys and finished goods, and escalating international competition from countries with significantly lower production costs. The industry body emphasizes that these challenges are compounded by logistics constraints, rail inefficiency, and port congestion that increase export delays and transportation costs.
Bester notes that while the recently introduced electricity pricing relief for the ferrochrome industry represents a positive step, it has primarily served to prevent further decline rather than establish conditions for renewed growth. He characterizes this measure as a short-term intervention rather than a long-term solution to the sector's fundamental challenges. South Africa's silicon and manganese alloy sectors are particularly affected, with several operations already suspended and others facing potential permanent closure.
Without decisive action from government and state-owned power utility Eskom within weeks, the sector will continue its downward trajectory with direct consequences for rising unemployment. Bester identifies several critical requirements to secure the sector's future. These include achieving a competitive electricity tariff, implementing importation duties on competing goods, improving commodities logistics options, and developing better infrastructure to reduce carbon footprints.
Logistics inefficiencies and rising fuel costs within rail and port systems have significantly increased transport costs, reduced reliability, and delayed export timelines to international customers. Industrial policy certainty represents another essential factor, as large-scale smelting investments require confidence that competitive operating conditions will be maintained over several decades. South Africa possesses world-class mineral resources, technical expertise, and installed smelting capacity, yet these competitive advantages are increasingly outweighed by structural cost disadvantages.
Bester emphasizes that the ferroalloys industry is not seeking permanent support or protection but rather a competitive operating environment enabling South African producers to compete fairly with international counterparts. Such conditions would preserve significant numbers of skilled employment positions across the sector. Regarding import tariffs on finished products, Bester notes that discussions have occurred for more than a decade, with limited success.
The only accomplished outcome to date has been the implementation of some tariffs on limited steel finished goods. Source: Mining Weekly, August 28, 2026, reporting on statements by Ferro-Alloy Producers Association chairperson Nellis Bester.
Source: miningweekly.com