South Africa relaxes antitrust rules to help firms hit by power costs

South Africa published regulations on Jan. 5 that expand an energy users' block exemption so firms in 'industries in distress' can jointly negotiate energy and share backup generation, and the change could assist ferrochrome and manganese processors facing high electricity costs and recent layoffs.

South Africa's government has eased antitrust rules to let competitors in power‑intensive industries cooperate on energy. Trade, Industry and Competition Minister Parks Tau expanded an energy users' block exemption in the Competition Act in regulations published Jan. 5. The change allows firms in designated "industries in distress" to jointly negotiate energy purchases, share ownership of backup generation capacity and work collectively with suppliers while barring price‑fixing of goods and services. Key details: - Regulations published Jan. 5 expand the energy users' block exemption under the Competition Act. - Permitted cooperation includes joint negotiation of energy buying, shared backup generation ownership, and collective engagement with suppliers, provided price‑fixing of goods and services does not occur. - The rules do not specify industries; ferrochrome and manganese processors have been reported idling operations and laying off thousands, citing high electricity costs. - Electricity prices in South Africa have roughly tripled over the past 15 years, and Eskom has struggled with supply issues since 2008, including widespread outages through 2023. - Recent company and union reports include Transalloys warning of up to 600 job cuts, Glencore's ferrochrome unit closing two operations, and Solidarity saying Samancor Chrome may cut almost 2,500 jobs. Summary: The regulatory change is intended to allow energy‑intensive firms to cooperate to secure energy more affordably while maintaining limits on price‑fixing. Which industries will qualify and how the measures will be applied are undetermined at this time.