South African Chrome Producers and Smelters Reject Proposed Chrome Ore Export Tax

December 2, 2025 News:

According to an announcement from the Minerals Council South Africa, primary miners and enterprises producing chrome ore from their platinum group metal mines, as well as chrome ore producers and integrated producers represented by the Ferroalloys Producers Association (FAPA), identified globally competitive electricity prices as the primary intervention measure for restarting idled smelters.

The report indicated that both parties clearly agreed that chrome ore prices and supply were not the reasons for the closure or suspension of South Africa's ferrochrome smelters. Instead, they attributed the lack of competitiveness and unprofitability of domestic smelters to electricity tariff increases of over 900% since 2008.

Consequently, "both miners and smelters rejected recent proposals for export taxes or restrictions, as these measures would harm chrome ore producers without substantially aiding smelter recovery." Without interventions directly addressing the electricity cost burden, no trade measures, including chrome ore export taxes or quotas, could restore meaningful viability to South Africa's ferroalloy smelters.

The industry is united in its commitment to protect the ferrochrome and broader ferroalloy sector, continue adding value to South Africa's mineral resources, and support domestic manufacturers. Any interventions beyond electricity price adjustments must be fair and equitable, while supporting the competitiveness of both chrome ore mining and downstream ferrochrome processing. The Minerals Council and its members, together with FAPA and its members, proposed collaborating with the government to develop a beneficiation roadmap, comprehensively understand and implement measures that encourage industrialization, incentives, and a favorable regulatory environment to encourage and sustain investment in exploration, mine development, existing mines, and downstream industrialization of minerals and metals.

① Electricity: Provide the industry with a sustainable electricity supply at globally competitive prices.

For example, ferrochrome smelter operator Samancor Chrome proposed a solution that does not require subsidies from the government, state-owned utility Eskom, or other mining companies. Smelter operators are exploring renewable energy as a long-term solution.

Although implementation will take time, this would reduce dependence on Eskom and enable South African ferroalloy producers to minimize the risk of penalties under the Carbon Border Adjustment Mechanism.

② Taxation: Reduce or temporarily suspend the domestic carbon tax on smelters.

③ Regulations: It is necessary to eradicate illegal chrome ore mining, which is estimated to generate R8 billion annually, accounting for approximately 10% of South Africa's chrome ore exports. This requires comprehensive intervention from law enforcement agencies, enhanced border controls, and stricter, consistently enforced regulations.