COUNTRY IN FOCUS • expansion of nuclear capacity, and emerging green hydrogen and industrial decarbonisation initiatives.
These interventions are not yet fully realised, but they are reshaping the long term energy outlook for energy intensive industries. Imposing an export tax before these reforms begin to materially change the cost and reliability of electricity risks locking in the very outcomes policy is trying to avoid. It penalises mining at a moment when the enabling conditions for downstream processing are only now starting to come into view. In effect, the policy risks running ahead of the infrastructure transition.
Export tax: Undermining what is working The logic behind the proposed 25 % export tax is to tilt incentives back toward local processing by lowering domestic ore prices. But this assumes that ore pricing is what drove smelters out of the market. It was not.
Without globally competitive electricity pricing and supply certainty, cheaper ore alone will not restore smelting at scale. What it will do is compress margins upstream, forcing producers to absorb part of the tax to remain competitive in international markets.
That matters because the upstream sector is where investment and expansion are currently occurring. It also introduces strategic risk. Chrome buyers, particularly in Asia, are not captive. Alternative suppliers, including Zimbabwe, are actively increasing output. Once buyers diversify supply chains, market share is difficult to regain.
Real opportunity but conditional What makes this debate particularly important is that the chrome value chain itself is evolving.
Global stainless steel demand remains structurally strong, linked to urbanisation, infrastructure build and energy transition applications. At the same time, there is growing interest in lower carbon ferrochrome production, renewable energy powered smelting and integrated mining energy industrial hubs.
South Africa could be well positioned to participate in this next phase, especially as wheeling frameworks, private generation and hybrid energy solutions begin to mature. Several producers are already exploring renewable energy options to stabilise costs and reduce emissions. But these opportunities depend on competitiveness first, not compulsion.
Beneficiation must be enabled None of this is an argument against beneficiation. On the contrary, it is an argument for getting the sequencing right.
If the government wants to expand downstream chrome processing, the priorities are clear. Restore electricity competitiveness and reliability. Improve logistics performance. Provide regulatory certainty. Design targeted, bankable industrial incentives that crowd in private capital.
Only once those foundations are in place does it make sense to use trade policy as a reinforcing lever, not as a blunt forcing mechanism.
A sequencing problem This is not a choice between extraction and industrialisation. It is a question of timing.
South Africa’ s chrome industry is growing, exporting and adapting under difficult conditions. The risk is that a prematurely imposed export tax undermines that momentum while failing to deliver the beneficiation gains it seeks. Chrome is not the problem. The opportunity is real. But without fixing energy and competitiveness first, policy risks getting ahead of economics. In industrial policy, timing matters as much as intent. •
About author: Kalnisha Singh is a development economist with over two decades of experience working across South Africa’ s mining, energy and infrastructure sectors. Her work focuses on the intersection of economic development, social performance and sustainability in complex operating environments.
She is the founder of KD Strategies, a South Africa-based advisory firm that supports investors, project developers and boards in navigating regulatory, socio-economic and stakeholder challenges across the full project lifecycle, from early development through operations and closure.
She advises both public and private sector clients and is regularly engaged on issues related to beneficiation, industrial policy, energy transition and the long-term resilience of resource dependent economies.
Supplied by Kalnisha Singh
www. africanmining. co. za African Mining Publication African Mining African Mining • March 2026 • 17