JOHANNESBURG (miningweekly.com) – South Africa needs both a competitive mining sector and a strong manufacturing base but supporting one sector by undermining another is an unsustainable strategy, Chrome SA cautions in a comprehensive media release in which it emphasises its willingness to work with government to create a policy environment where mining and manufacturing can thrive, but that this has to take place within framework of competitive electricity pricing, reliable electricity supply, and globally competitive investment conditions.

Viewed by Chrome SA as an unsustainable strategy are the proposed chrome export taxes and quotas to encourage the sale of chrome ore locally and thereby the revival of South Africa’s struggling ferrochrome smelting industry, which uses chrome ore to produce ferrochrome, a key ingredient in the manufacture of stainless steel.

The members of Chrome SA are Assore, Sibanye-Stillwater, Tharisa, Valterra Platinum, Northam Platinum, Siyanda Resources, ChromTech, Pelagic Resources, Impala Platinum and Jubilee Metals.

The organisation makes it clear that the chrome ore mining industry is ready to be part of a solution but only with the introduction of:

• competitive power tariffs that allow energy-intensive industries to compete globally;
• reliable power supply, underpinned by investment in Eskom’s recovery and diversified new generation;
• regulatory certainty for self-generation and renewable projects by mines and smelters, enabling them to take charge of their own energy future; and
• a coherent industrial strategy that fosters both upstream mining and downstream beneficiation, without sacrificing one for the other.

The decline of South Africa’s ferrochrome sector, it says, is not the result of expensive chrome ore but rather the up-to-three-times-more that South Africa's ferrochrome producers are having to pay for electricity than their global competitors.

“No amount of tweaking ore prices or imposing export restrictions will change the fact that uncompetitive power costs have crippled the sector. Unless electricity pricing is addressed, local smelters will remain unviable – regardless of what happens to ore exports,” Chrome SA accentuates.

Export restrictions, quotas or taxes would, it adds, cut into already thin margins for chrome ore mining companies, which employ more than 25 000 people, while sustaining thousands more jobs in surrounding communities through procurement, services and household spending.

In 2024, chrome ore exports generated more than R84-billion in foreign exchange earnings for South Africa and curtailing exports would directly reduce foreign currency inflows as well as tax revenues, at a time when the fiscus can least afford it.

Against that background, Chrome SA emphasises its willingness to work with government to create a policy environment where mining and manufacturing can thrive but only within a framework of competitive electricity pricing, reliable electricity supply, and globally competitive investment conditions.