SOUTH Africa has loosened antitrust regulations to allow companies in sectors crippled by soaring electricity costs to jointly negotiate cheaper power supplies, a move aimed at preventing industrial collapse, said Bloomberg News on Wednesday.
The newswire reported that Trade, Industry and Competition Minister Parks Tau had amended the Competition Act’s energy users’ block exemption in regulations published on January 5. Firms operating in “industries in distress” may now collectively purchase energy, share ownership of backup generation capacity and work with suppliers, provided they avoid price-fixing of goods and services, said Bloomberg.
Whilst the regulations do not specify which sectors qualify, the changes particularly benefit South Africa’s ferrochrome and manganese processors, which have idled operations and shed thousands of jobs amid unsustainable power costs, said Bloomberg.
The country holds approximately three-quarters of global manganese ore reserves but faces mounting competition from Chinese processors.
Electricity prices have roughly tripled over the past 15 years, vastly outpacing inflation. Mismanagement and corruption at state utility Eskom, which generates over 80% of supply, has caused persistent shortages since 2008. Industry and consumers endured years of daily blackouts through 2023, severely damaging output and economic confidence.
Transalloys, operator of South Africa’s last manganese smelter, warned in late December it may eliminate 600 positions due to energy expenses. Glencore’s ferrochrome division announced plans to close two facilities earlier that month, whilst labour union Solidarity reported Samancor Chrome could cut nearly 2,500 jobs as it curtails operations.
The cabinet approved proposals in June to negotiate new electricity tariffs and potentially introduce controls or taxes on chrome ore exports.
