Chrome Industry Rejects Export Tax Proposal

Africa Mining Chrome Ferroalloys

South Africa’s chrome ore producers and ferrochrome smelters have rejected proposals for a chrome ore export tax, insisting that globally competitive electricity tariffs are the only viable solution to restarting idled facilities and safeguarding the country’s ferroalloy industry.

Industry Position

The Ferro Alloy Producers Association (FAPA), representing primary miners, platinum group metals operations generating chrome ore, and integrated producers, said the sector remains united in protecting ferrochrome production while adding value to South Africa’s mineral resources.

According to FAPA, chrome ore pricing and availability have not driven smelter closures. Instead, electricity tariffs—up more than 900% since 2008—have rendered domestic smelters uncompetitive and unprofitable.

Warning Against Trade Measures

Industry leaders cautioned that trade interventions such as export taxes or quotas would fail to restore viability to ferroalloy smelters. Such measures, they argued, would harm chrome ore producers without materially assisting smelter recovery. The Minerals Council echoed this position in a joint statement.

Proposed Solutions

Glencore and Samancor Chrome, two of South Africa’s largest ferrochrome operators, have proposed a solution that requires no subsidies from government, Eskom, or other mining companies. Smelter operators are also exploring renewable energy acquisition as a longer-term strategy to reduce dependence on Eskom and mitigate exposure to EU Carbon Border Adjustment Mechanism (CBAM) penalties.

Additional supportive measures under consideration include reducing or temporarily suspending domestic carbon taxes applied to smelters.

Tackling Illegal Chrome Mining

FAPA and non-integrated chrome producers highlighted the urgent need to eliminate illegal chrome mining, which generates an estimated R8 billion annually and accounts for roughly 10% of South Africa’s chrome ore exports. They called for comprehensive law enforcement, enhanced border controls, and stricter regulatory enforcement.

Roadmap for Beneficiation

The Minerals Council, FAPA, and industry members have proposed jointly developing a beneficiation roadmap with government to encourage industrialisation, sustain investment in exploration and mine development, and strengthen downstream processing.