The Minerals Council SA strongly opposes the cabinet’s proposal to impose export quotas or restrictions on legally mined chrome.
The council said on Wednesday in a statement it was particularly concerned about the cabinet’s approval of an export tax on chrome concentrate.
The cabinet said in a statement last week that to revive the competitiveness of SA’s declining ferrochrome industry it had approved a government-industry agreement on electricity tariffs.
“Cabinet approved the placement of chrome ore under export control, which will require exports to obtain the International Trade Administration Commission (Itac) permitting,” the statement says.
The cabinet also approved the initiative to develop a chrome ore export tax and expand the special economic zone (SEZ) smelter incentives framework and related regulations.
The Minerals Council said a proposed export tax on chrome had been raised a number of times over the years, followed by extensive engagements with the chrome producers.
“This included conducting research that unequivocally demonstrated why such taxes would not achieve the government’s aims of sustaining the ferrochrome industry and the preservation of jobs, but would instead have a negative impact on chrome producers and the significant contribution this industry makes to both SA’s economy and the jobs it sustains and grows,” the council’s statement says.
It notes chrome mining has been one of the best-performing subsectors of the mining sector. Stats SA data shows, in real inflation-adjusted terms, chrome production increased by an average of 8.4% between 1994 and 2024. This vastly outpaced an increase of 1.3% in total nongold production over the same period.
The council added that the chrome mining sector had also consistently increased employment, while data from the SA Revenue Service indicated record export volumes of 20.5-million tonnes in 2024, earning the country R84.6bn in export revenue.
“For this reason, export taxes have not been implemented to date and there remains no reason export taxes would support increased beneficiation in SA,” the council said.
“To the extent that it prevents illegal exports of chrome, the Minerals Council welcomes the proposal to require all chrome exporters to obtain permits from Itac.”
However, the council welcomed the cabinet’s announcement on preferential electricity tariffs for ferrochrome smelters. This would address high electricity prices, a key factor rendering SA’s ferrochrome industry uncompetitive. It also welcomed the use of SEZs to give the industry tax breaks.
More details about the proposals and extensive consultations with the government were needed, it said.
The council was adamant all stakeholders should be included in the process to create an environment conducive to beneficiation.
“The Minerals Council, which represents 90% of SA’s mineral production by value, is disappointed that there was no consultation between the relevant government departments, ministers and the Minerals Council on these proposed interventions,” it said.
It would urgently engage with the ministries of electricity & energy, mineral & petroleum resources, trade, industry & competition and the National Treasury on the cabinet’s proposals.
“SA remains the world’s largest producer of chrome concentrate, yet it lost its position a number of years ago as the leading supplier of ferrochrome — a title now held by China. This shift is largely due to structural advantages in China, including significantly lower electricity and labour costs, as well as the lower cost of capital.
“In contrast, SA ferroalloy smelters have increasingly been mothballed or shut, unable to compete with the substantial incentives offered by the Chinese government, most notably cheap and plentiful electricity. As a consequence of electricity prices increasing by nearly 900% in the past two decades, the SA chrome industry has opted to export chrome concentrate rather than beneficiate it at a loss.”
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