Neelam Rahim | neelam@radioislam.co.za
3-minute read | 10 December 2025

📸 Energy expert Professor Vally Padayachy warns that ESKOM’s ferrochrome deal could shape South Africa’s electricity future as the grid hangs in a delicate balance.

South Africa’s fragile electricity landscape is once again under scrutiny as ESKOM’s newly signed Memorandum of Understanding (MOU) with Ferrochrome producers triggers both cautious optimism and renewed concern. With energy-intensive industries under severe pressure, experts warn that the country’s power system is approaching a critical juncture that demands urgent, decisive action.

The agreement, aimed at securing negotiated pricing to keep smelters operational, comes as rising tariffs and global market shocks have pushed the Ferrochrome sector to the brink. Power and energy expert Professor Valley Padayachy, a former senior executive at both ESKOM and City Power, stresses that the move represents far more than a temporary intervention. “This is a genuine attempt to develop a sustainable, long-term intervention for the Ferrochrome sector,” he explains in an interview with Radio Islam International.

He warns that the industry has been “debilitated” by soaring electricity costs, revealing that some companies have already issued Section 189 notices. Without targeted relief, he cautions, the economic fallout will be severe. “If you do not allow for these negotiated pricing agreements, you may exacerbate the viability of these industries, which has a knock-on effect on job losses.”

But the cost burden remains unavoidable. As Padayachy notes, “ESKOM is government-owned, and eventually the taxpayer would carry the burden.” The challenge, he says, is balancing industrial relief with protecting households and small businesses at a time when tariffs are “going through the roof.”

ESKOM has given itself 90 days to develop solutions, a deadline critics view as unrealistic. Padayachy disagrees. With load-shedding suspended and surplus capacity available, he says the environment is finally right for meaningful progress. “Thank God we’ve stopped load-shedding… we have more than the national demand.”

Still, restarting smelters requires caution. Restoring even 40% of furnace capacity risks unsettling the fragile grid. “If all the smelters came back on the grid, we would have been back to load-shedding,” he warns.

Looking ahead, Padayachy believes South Africa’s power future lies in a hybrid model of restructuring, renewables, gas, and, critically, nuclear. With government backing for small modular reactors, he argues nuclear remains essential. “I have a lot of faith and confidence in nuclear; it is needed as a dispatchable technology to stabilise the electricity grid.”

As the 90-day deadline begins, South Africa now faces another decisive test in its long-running energy crisis.

Listen to the full interview on The Daily Round-Up with Moulana Junaid Kharsany and Professor Valley Padayachy.