• COUNTRY IN FOCUS
Image by Natanaelginting on Freepik
SA’ S CHROME DEBATE ABOUT COMPETITIVENESS, NOT EXPORTS
By Kalnisha Singh, development economist and founder of KD Strategies
South Africa is once again debating how to force beneficiation in its mining sector. This time, the focus is on chrome and specifically a proposed 25 % export tax on raw chrome ore intended to revive domestic ferrochrome smelting.
The policy objective is understandable. Chrome is a critical input into stainless steel, stainless steel underpins industrialisation, and South Africa holds an estimated 70 to 80 % of the world’ s known chrome ore reserves, making it the single most important player in the global chrome market.
The question, however, is not whether beneficiation matters. It is whether the export tax is the right instrument and this is the right moment to achieve it.
Sector: Expanding unevenly Contrary to the narrative of decline, South Africa’ s chrome industry is growing upstream. In recent years, the country has exported more than 20 million tonnes of chrome ore annually, generating an estimated R80 to R90-billion a year in export revenue.
Chrome ore is now one of South Africa’ s top bulk mineral exports by volume. The sector supports roughly 25 000 direct jobs, with many more indirect roles across logistics, services and mining communities.
This expansion has been driven by sustained global demand, particularly from China, which accounts for the majority of global stainless steel production. It has also been supported by increased recovery of chrome as a byproduct of platinum group metal mining, an important revenue buffer during periods of weak PGM prices.
At the same time, domestic ferrochrome smelting has contracted sharply. South Africa was once the world’ s largest producer of ferrochrome. Today, a significant portion of installed capacity is mothballed or operating below nameplate levels.
These two trends are often presented as evidence of de-industrialisation. In reality, they reflect adaptation to structural constraints.
Why smelting decline and not mining? Ferrochrome smelting is among the most electricity intensive industrial processes in the economy. Electricity can account for up to 40 % of a smelter’ s operating costs.
Since 2008, Eskom tariffs for large industrial users have increased by well over 800 %, while supply interruptions have become routine. In that context, South African smelters have struggled to compete with facilities in jurisdictions offering lower cost and more reliable power.
Ore availability was never the constraint – electricity was and remains. Mining companies responded by exporting more ore, not because beneficiation became undesirable, but because it became uneconomic under prevailing conditions. The sector adjusted and in doing so preserved jobs, investment and export earnings.
Acting too soon What makes the timing of the proposed export tax particularly problematic is that South Africa is already in the early stages of restructuring its energy system. Significant effort and capital are being directed toward improving electricity availability, reliability and cost through a combination of renewable energy, private generation and wheeling frameworks, battery storage, potential
16 • African Mining • March 2026 www. africanmining. co. za