The critical state of SA’s ferroalloy smelting sector

The ferroalloys industry in South Africa has historically played a cornerstone role in South Africa’s industrial economy. Built on the country's immense chrome, manganese and vanadium resource wealth, it once underpinned South Africa’s reputation as a global leader in ferroalloy beneficiation and value-added processing. 

In recent years, however, the industry has experienced a marked decline. Escalating energy costs and logistics bottlenecks, coupled with rising competition from China, have eroded the competitiveness of South African smelters.

South Africa’s ferrochrome and ferromanganese beneficiation once positioned it as a global leader, largely feeding the stainless-steel industry. As a result, the industry has shifted back towards being a primary commodity ore exporter.

South Africa is now the world’s largest producer of manganese and chrome ores, exporting approximately 85% of chrome and 70% of manganese ore to China and India, where much of the downstream alloy production is currently taking place.

China has emerged as a more competitive destination to process metals due to the country’s low relative energy costs and large capital investment. 

Potential for renewal 

Despite these developments, South Africa’s ferroalloys sector still has the potential to raise the level of beneficiated mineral output, driving economic growth, adding significant value to South Africa’s fiscus and supporting employment.

At the Critical Materials Conference: Ferroalloys 2025 held in Johannesburg in September, industry participants explored strategies to safeguard the sector. Central to the discussions were the energy and logistical challenges and the collaborative solutions required to address them.

Industry leaders are increasingly engaging with the government to find workable solutions that could alleviate some of the pressures in the near to medium term to curtail South Africa’s de-industrialisation and retain the country’s deep domain skillset.

Pathway to solutions

1. Logistics reform: Solutions already in motion include Transnet’s third-party access policy and accelerated private-public partnership programme.
2. Energy efficiency and grid expansion: The sector is seeking greater government support, including the accelerated expansion of the transmission grid in South Africa to deliver more renewable energy to intensive users.  Mining companies are increasingly exploring alternative energy sources.
3. Technological innovation: Finding other solutions requires industry innovation, such as the direct smelting process which significantly reduces energy consumption and carbon emissions during the production of ferroalloys and other metals.

Looking ahead

South Africa is well placed to leverage its natural advantages. While challenges remain significant, the solutions and opportunities outlined at the conference point to a way forward.

By fostering collaboration between government, industry and investors, South Africa can revitalise this vital sector, safeguard industrial capacity, and harness its mineral wealth to support the global transition to a low-carbon economy.