High Electricity Costs Threatening South African Manufacturers

A report published September 7, 2026 says mining and industrial companies paid R115 billion to Eskom for electricity during the 2025/26 financial year—almost R50 billion more than in 2021. At the same time, industrial electricity demand fell sharply as some energy-intensive producers reduced output because electricity was consuming a large share of their production costs.
The pressure is particularly serious for smelters, steel producers, ferrochrome, manganese and other electricity-intensive manufacturers. South African energy costs have risen dramatically over the longer term, undermining the competitiveness of local production against lower-cost international producers.
Manufacturing competitiveness: High electricity costs make South African products more expensive.
Production cuts: Energy-intensive companies are reducing or suspending production where electricity costs make operations uneconomical.
Jobs at risk: Recent tariff-relief interventions have explicitly been justified as necessary to protect industrial capacity and employment.
Investment risk: Companies may increasingly consider alternative locations or private renewable-energy solutions.
Eskom needs revenue to remain financially sustainable, while industrial users need affordable electricity to remain competitive.
Eskom’s 2026/27 tariffs increased by an average 8.76% for direct customers, with municipal tariffs increasing by 9.01%.
“South Africa’s electricity crisis is no longer only about load-shedding. It is becoming a competitiveness crisis: manufacturers are now warning that the cost of power itself could determine whether factories continue producing or shut down.”
This is a particularly strong story because it connects electricity prices → manufacturing costs → factory production → jobs → South Africa’s industrial future.