South Africa has more chrome than any other country, which is why it made such sense to add value to it in South Africa and turn chromite into ferrochrome, at many times the price and many times the jobs. But it did so when electricity was cheap.
Currently, Eskom’s expensive electricity and Transnet’s logistical absence are strangling the ferrochrome business to death. Cabinet is thus correct to propose that tax be imposed on the export of raw chrome to enable the South African ferrochrome industry to regain market share, which it has been losing hand over fist.
We believe, however, that the export tax should have an end date to ensure that the industry is not allowed to become complacent about the unideal assistance that is being afforded it. Two to three years of protection should be enough to allow Eskom to get back on its feet, for Transnet to provide proper logistics, and for ferrochrome producers to reciprocate by doing everything in their power to generate, cogenerate and innovate their way back into global contention.