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Africa|Components|Energy|Eskom|Export|Industrial|Renewable Energy|Renewable-Energy|Steel|System
Africa|Components|Energy|Eskom|Export|Industrial|Renewable Energy|Renewable-Energy|Steel|System
africa|components|energy|eskom|export|industrial|renewable-energy|renewable-energy-company|steel|system

Transparency needed

11th July 2025

By: Terence Creamer

Creamer Media Editor

     

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South Africa’s recent trade policy interventions have been nowhere near as attention grabbing as President Donald Trump’s April 2 Rose Garden performance that included a giant cardboard chart listing some of the ‘reciprocal tariffs’ America would be imposing on over 100 countries.

Yet, a number of recent developments suggest that the South African government is indeed pursuing a number of trade and industrial policy agendas of its own, possibly using the White House theatrics as cover.

The most recent high-profile development is Cabinet’s approval of export controls, together with an electricity incentive, for South Africa’s ferrochrome industry.

At the time of writing, details remained sketchy, but the approval means that chrome ore exporters will be required to obtain a permit from the International Trade Administration Commission of South Africa (Itac) and that a chrome ore export tax is also on the cards.

Given the importance of electricity as an input in producing ferrochrome, these trade policy measures have been coupled to a proposed “realignment” of the electricity tariff charged to ferrochrome producers to bolster their competitiveness.

The intervention was not entirely unexpected in light of the fact that government has signalled for some time that it was considering ways to shore up ferrochrome production following the closure of more than half of the country’s 59 chrome furnaces over the past number of years.

Nevertheless, the speed at which the intervention has emerged is somewhat remarkable for a government that has hitherto taken so long to act that many companies have all but given up on even applying for protection.

Therefore, the development raises some questions, even though the pick-up in pace is not entirely isolated.

Indeed, there has been something of a steady stream of Itac notices published over the past few months confirming everything from provisional safeguard, antidumping and customs duties, to announcements of far-reaching reviews of protection levels in a diverse range of sectors from steel to renewable-energy components.

In many cases, formal processes have been established to allow for public comment and, in some instances, it is understood that public hearings may even be held.

The comprehensive nature of the support proposed for the ferrochrome sector implies some material trade-offs and, thus, surely carries some risk of unintended consequences.

The electricity incentive, for instance, implies yet another negotiated pricing agreement between Eskom and the beneficiary smelters, which has implications for other electricity consumers, who will bear the costs.

The experience, meanwhile, of the imposition of export taxes on scrap metal, as well as the price preference system, has been mixed, with opponents suggesting that it has created an uneven playing field between integrated and mini mills.

It was confirmed earlier this year that discussions were under way with chrome producers and that a Ministerial Task Team had been established to investigate a revival plan for the smelting sector.

Yet it would truly be a stretch to suggest that the proposed support measures have been transparently canvassed and debated.

Edited by Terence Creamer
Creamer Media Editor

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