The ferromanganese smelter at Cato Ridge Works in KwaZulu-Natal will cease operations by the end of August, resulting in job losses for 600 employees. Assmang, jointly owned by African Rainbow Minerals and Assore, confirmed the closure decision this week, citing unsustainable financial losses at the facility.
Persistently low manganese prices combined with soaring operational costs have made the smelter unviable. Electricity prices have increased by 930% since 2008, creating insurmountable challenges for the operation. The 310 permanent staff and 290 contract workers affected will be retrenched as part of the wind-down process. Company representatives stated that even potential electricity tariff reductions wouldn’t be sufficient to save the struggling smelter.
Following the closure, the site will be transformed into a commercial and logistics hub. Assore’s property division will purchase the land and buildings for R453 million, providing Assmang with much-needed capital. In a related move, the company is selling its majority stake in Malaysia’s Sakura Ferroalloys smelter, a transaction expected to generate R900 million for African Rainbow Minerals.
These restructuring measures come as the mining sector faces significant headwinds. ARM recently reported a 49% decline in half-year earnings, reflecting the challenging market conditions. The company had previously warned about potential job cuts at its platinum operations, indicating broader pressures across its portfolio. While the closure and asset sales may improve financial stability in the long term, they represent difficult decisions with immediate consequences for workers and local communities.
The situation at Cato Ridge highlights the ongoing challenges facing South Africa’s mining industry, where rising costs and volatile commodity prices continue to threaten operations. As companies like Assmang adapt to these market realities, the human impact of such restructuring remains a critical consideration for both business leaders and policymakers. The conversion of industrial sites to alternative uses may offer some future economic benefits, but provides little comfort to those facing unemployment in the coming months.