South Africa, the world’s biggest chrome producer, has approved measures to support the domestic ferrochrome industry including through an export tax on chrome ore, according to a cabinet statement on Thursday.
“The interventions include the proposed introduction of the export tax on chrome ore, the usage of energy efficiency technologies on smelters, and the adoption of cogeneration and self-generation technologies,” said Minister in the Presidency Jackson Mthembu, reading the statement.
He did not disclose details of the export tax, and the mines ministry did not immediately provide details about the proposed tax when asked by Reuters.
Chrome ore is a key ingredient in stainless steel, an essential material for the automobile industry. South Africa last year supplied 12.5 million tonnes of chrome ore to China – 83% of China’s total chrome imports.
Companies mining and processing chrome in South Africa include Glencore, Merafe Resources, Samancor Chrome, Tharisa, and Jubilee Metals.
Shares in Merafe Resources – which runs a chrome joint venture with Glencore – jumped as much as 12.5% after the announcement, hitting their highest level since early August.
Several South African chrome miners declared force majeure in March when the country’s coronavirus lockdown forced mines to shut.
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All very well but where are we going to get the power to run our own smelters? It will just push the world to find other alternatives to our chrome. Nothing more than a tax grab dressed up as support for local business…
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Or a counter to transfer pricing manipulation and loss in tax revenue to SA?
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