The Minerals Council South Africa MCSA has expressed support for adding value to the countrys minerals but opposes policy interventions that could harm the primary mining sector, jobs and economic growth.
The council, which represents 90 of local mineral production by value, was responding to a Cabinet statement approving three interventions for the chrome and ferrochrome industry.
It said it was disappointed by Cabinets lack of consultation with relevant government departments, ministers, and the council on the proposed interventions, which aim to reverse the decline in local smelting capacity for ferrochrome, a key ingredient in stainless steel.
The Minerals Council South Africa is fully supportive of adding value to the countrys minerals, however, the process to create an environment conducive to beneficiation must include all stakeholders to ensure unintended consequences are avoided in other industries and do not negatively impact economic growth and associated jobs, the MCSA said.
It added that South Africa was the worlds largest producer of chrome concentrate but it was losing ferrochrome production opportunities to China because of its lower electricity, labour costs and capital access.
South African ferroalloy smelters had faced closures due to these disparities, with electricity prices rising nearly 900 over two decades, prompting the industry to export chrome concentrate instead of beneficiating it at a loss, the council said.
The MCSA said it was concerned Cabinet had approved an export tax on chrome concentrate, saying it had previously engaged with the government on this critical issue.
This included conducting research that unequivocally demonstrated why such taxes would not achieve the governments 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 South Africas economy and the jobs it sustains and grows, it said.
The council welcomed the announcement of preferential electricity tariffs for ferrochrome smelters and special economic zones offering tax breaks.
However, the details remain lacking, requiring extensive consultations with the government to understand these proposals and which industries will benefit, it said.
The MCSA also supports the proposal requiring chrome exporters to obtain permits from the International Trade Administration Commission of South Africa to prevent illegal exports, but it opposes any move to impose export quotas or restrictions on legally mined chrome.
Chrome mining has grown by an average of 8.4 from 1994 to 2024 in real terms, outpacing total non-gold production growth of 1.3, with employment rising and 2024 export volumes reaching 20.5 million tonnes, generating R84.6 billion in export revenue.
The council said it was planning to urgently engage with the ministries of electricity and energy, mineral and petroleum resources, trade, industry and competition, and National Treasury to seek clarity and ensure optimal outcomes.
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