Nersa grants Manganese Metal Company a two-year Eskom discount

Nersa has approved a two-year negotiated pricing agreement between Eskom and Manganese Metal Company (MMC), giving the Mbombela-based producer of electrolytic manganese metal a discounted power tariff from 1 August 2026 to 31 July 2028. The approval, granted on 30 July 2026, follows the same negotiated pricing route Eskom used earlier in the year to secure relief for the country's ferrochrome smelters.

MMC produces selenium-free electrolytic manganese metal, a specialised product used in aluminium alloys, batteries and steelmaking, at a plant in Mpumalanga employing 380 full-time staff and 280 contractors and turning out around 28,000 tonnes a year. Electricity accounts for roughly 41% of the company's production costs, making it acutely exposed to Eskom's tariff increases of recent years.

How the deal works

Nersa approved what it called a "special base tariff" for MMC, with annual escalations each April linked to producer price inflation plus 1%. The regulator did not disclose the specific rand-per-kilowatt-hour price, saying doing so could let international competitors calculate MMC's break-even cost of production. The agreement requires MMC to consume electricity at a load factor above 90%, with projected annual baseload consumption of 360 gigawatt-hours, and sets minimum payment obligations even if the plant draws less than 80% of its normal usage.

Nersa full-time regulator member Willy Majola said the approval would help safeguard critical industrial capacity, echoing the regulator's reasoning in the ferrochrome case that the deal protects jobs and local beneficiation without shifting costs onto ordinary Eskom customers.

Part of a wider pattern

MMC's agreement extends a run of concessionary tariffs Eskom and Nersa have granted to metals processors in 2026, after similar deals for Samancor Chrome and the Glencore-Merafe ferrochrome venture. The common thread is South Africa's high, and rising, industrial electricity price relative to competing producing countries such as China and Kazakhstan, which has made local smelting and refining of manganese, chrome and other ores increasingly uncompetitive. Whether the tariff relief is enough to keep MMC's Mbombela plant running at full capacity — rather than simply slowing its decline — will depend on how Eskom's broader pricing structure evolves once the current relief period ends in mid-2028.

Sources

• Mining Weekly: Nersa approves discounted Eskom tariff for Manganese Metal Company, 19 Aug 2026

Photo: A sample of high-purity electrolytic manganese metal, the product made by Manganese Metal Company. Alchemist-hp (talk) (www.pse-mendelejew.de), Wikimedia Commons, FAL.