Jobs bloodbath looming in South Africa

South African trade union Solidarity has warned about the potential loss of hundreds of thousands of jobs in the country, many of which could be realised before Christmas.

This threat is caused by several major employers withdrawing their business from the country due to failures by the government, says the trade union with more than 500,000 members.

The trade union’s first warning came following the receipt of retrenchment notices in August, which it claims directly and indirectly affected 350,000 people, a number it expected to increase.

At the time, Solidarity’s general secretary Gideon du Plessis said that almost all retrenchment notices cited “poor infrastructure such as railways and ports, unpredictable power supply and electricity prices, and poor policy.”

He added that companies were also frustrated by their inability to conclude a favourable agreement with the government.

Because it believed the government was not taking the threat of these retrenchments seriously, the trade union declared a formal dispute with the National Economic Development and Labour Council (NEDLAC).

During mediation between Solidarity and NEDLAC, the union said employers had revealed that the estimated number affected by retrenchments was much higher than initially thought.

While it stuck to its initial figure of 300,000 direct and indirect jobs at risk from December to early 2026, it stated that an additional 500,000 jobs were at risk in the steel and manufacturing industries.

“These sectors’ survival is threatened by unaffordable Eskom tariffs, followed by Transnet’s defective, unreliable and expensive transport and port infrastructure, cheap imports of particularly steel and its dumping, and export tariffs levied against South Africa,” it said.

Solidarity CEO Dirk Hermann noted that electricity tariffs for smelters have increased by 900%, while inflation has risen by 103%.

He added that 40% to 60% of the ferroalloy industry’s costs are electricity.

Companies affected include Ferroglobe SA, Transalloys, Samancor Chrome, Assmang, and MMC Nelspruit, as well as Glencore-Merafe, all of which are major employers.  

The logistics cost to these companies is also significant, given that Transnet’s limited capacity means that only 20% of transport to and from smelters is done by rail. In many cases, the road is the sole form of transportation employed.

Solidarity points out that when steel is exported to the United States, logistics costs can account for anywhere between 50% and 80% of local production costs.

Major shutdowns

As a result of these costs, many companies in the ferroalloy business will likely downsize or close operations.

Solidarity says this will have a significant impact on the downstream industries in the steel and manufacturing sectors.

It says that so far, Assmang’s ferromanganese furnaces in Cato Ridge have been permanently shut down. At the same time, its Meyerton and Machadodorp operations are unlikely to be revived under the current economic conditions.

Transalloy reduced its Witbank operations capacity by 40% as of 1 December.

Similarly, Gelncore has shut down its ferrochrome operations across all of its plants, a total of 22 furnaces. This has already resulted in 1,500 retrenchments in Rustenburg and Lydenburg alone.

Samancor finds itself in a similar but less dire position, with four of its 24 blast furnaces currently in operation.

Solidarity states that these employers are currently in negotiations with the government in an effort to urgently save the industry.

“This is going to develop into a social crisis. It has been caused by the government, and they must take responsibility. It’s not only companies that are affected, but communities,” Hoffman said.

In September, Minister of Energy and Electricity Kgosientsho Ramokgopa met with players in the ferrochrome and smelter industry to “discuss urgent electricity pricing challenges that threaten jobs and the broader economic landscape.”

During the meeting, Ramokgopa emphasised the urgent need to address the immediate pressures facing the industry and ensure long-term pricing stability.

The minister also reportedly “assured attendees that he is working diligently with key stakeholders to finalise the electricity pricing point.”