The Minerals Council South Africa has reiterated its support for mineral beneficiation but cautions against policy decisions that could damage the primary mining sector, threaten jobs and undermine economic growth. The Council stresses the need for inclusive stakeholder consultation to ensure well-intentioned interventions do not produce harmful unintended consequences.

The Minerals Council South Africa supports efforts to add value to the country’s mineral resources through beneficiation but emphasises that such initiatives must involve all relevant stakeholders to avoid negatively affecting other sectors, particularly mining and employment.

Responding to a Cabinet Statement issued on 26 June 2025, which outlined three interventions aimed at reviving South Africa’s struggling chrome and ferrochrome industry, the Council—representing 90% of the country’s mineral production by value—expressed disappointment over the lack of consultation from government departments. The Council believes that alignment between policymakers and the industry is critical for achieving shared goals of economic growth, job creation, and a sustainable mining value chain.

The Council, especially on behalf of non-integrated chrome producers, plans to urgently engage with the ministries of Electricity and Energy, Mineral and Petroleum Resources, Trade, Industry and Competition, and National Treasury to seek clarity on the proposed measures.

While South Africa remains the world’s top producer of chrome concentrate, it has lost its former dominance in ferrochrome production to China. The shift is attributed to China’s structural advantages, such as lower electricity and labour costs and greater access to affordable capital. In contrast, escalating electricity prices—up nearly 900% in two decades—have made domestic beneficiation unviable, prompting many producers to focus on chrome concentrate exports.

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The Council cautiously welcomed Cabinet’s announcement of preferential electricity tariffs for ferrochrome smelters and proposed tax incentives within special economic zones. However, it stressed the need for further detail and thorough engagement to understand the full implications and ensure they benefit the intended sectors.

Regarding proposed export control measures, the Council supports steps to prevent illegal chrome exports through a permit system managed by the International Trade Administration Commission. However, it strongly opposes any move to expand this system into export quotas or restrictions on legally mined chrome.

Of particular concern is Cabinet’s support for a possible export tax on chrome concentrate. The Council notes this idea has resurfaced multiple times and has been thoroughly researched in collaboration with industry members. The findings consistently show that an export tax would harm the chrome mining sector without achieving the desired revival of the ferrochrome industry. Instead, it would likely reduce investment, employment, and export revenues.

Chrome mining has been a standout performer in South Africa’s mining industry. Between 1994 and 2024, production grew at an inflation-adjusted annual average of 8.4%, far outpacing the non-gold mining sector’s growth. The industry has also expanded employment and delivered record export volumes of 20.5 million tonnes in 2024, generating R84.6 billion in revenue, according to SARS.

Given this track record, the Minerals Council sees no justification for implementing an export tax, warning it could jeopardise one of the country’s most successful mining subsectors without delivering the intended beneficiation outcomes.