Chrome ore producers and ferrochrome smelters, represented by the Ferro Alloy Producers Association (FAPA), have united in rejecting proposals for a chrome ore export tax, insisting instead that globally competitive electricity tariffs are the decisive intervention needed to restart South Africa’s idled smelters.
The industry points to a staggering 900% increase in electricity tariffs since 2008, which has rendered domestic ferrochrome operations unprofitable, rather than ore availability or pricing.
The sector, which includes primary chrome miners, platinum group metals producers generating chrome by-product, and integrated ferrochrome operators, stresses that trade measures such as export taxes or quotas would harm ore producers without restoring smelter viability.
“The solution is clear: sustainable electricity at competitive tariffs, not punitive restrictions,” FAPA members stated, underscoring their commitment to safeguarding South Africa’s ferroalloy industry and supporting domestic manufacturers.
Major smelter operators Glencore and Samancor Chrome have already tabled proposals requiring no subsidies from government, Eskom, or other mining companies.
In parallel, producers are exploring renewable energy procurement as a long-term strategy to reduce reliance on Eskom and mitigate exposure to Carbon Border Adjustment Mechanism (CBAM) penalties in export markets.
Analysts note that such moves could position South Africa’s ferroalloy sector more competitively in a global market increasingly shaped by carbon costs.
Additional relief measures under discussion include a reduction or temporary suspension of the domestic carbon tax applied to smelters.
Industry leaders argue that without such interventions, South Africa risks losing its competitive edge in ferrochrome, silicon, and manganese production sectors critical to both local beneficiation and global supply chains.
The industry also highlighted the urgent need to tackle illegal chrome mining, estimated to generate R8 billion annually and accounting for roughly 10% of South Africa’s chrome ore exports.
FAPA and non-integrated producers are calling for stronger law enforcement, enhanced border controls, and consistent regulatory application to protect legitimate operators and restore confidence in the sector.
Looking ahead, FAPA, the Minerals Council, and their members propose jointly developing a beneficiation roadmap with government.
The plan would aim to foster industrialisation, incentivise investment in exploration and mine development, and create a regulatory environment conducive to sustaining downstream industries.
Analysts view the united stance of miners and smelters as a pivotal moment: unless electricity costs are addressed, South Africa’s ferroalloy sector risks further decline.
However, with coordinated policy, renewable energy adoption, and stronger governance, the outlook could shift toward recovery, reinforcing the country’s role as a global supplier of value-added chrome and ferroalloys.
By Laddy Tshilonde
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