Chrome ore producers, represented by the Ferro Alloy Producers Association (FAPA), are aligned on the fundamental need for globally competitive electricity prices as the primary intervention required to restart idled smelters.
The industry remains united in its commitment to safeguard the ferrochrome and broader
ferroalloy sector, to continue adding value to South Africa’s mineral endowment, and to
support domestic manufacturers. Any interventions in addition to an electricity tariff
adjustment must be balanced, equitable and supportive of the competitiveness of both chrome
mining and ferrochrome beneficiation.
Both groups are clear that the price and availability of chrome ore is not the cause of South
Africa’s ferrochrome smelter closures or suspensions. Instead, the more than 900% increase
in electricity tariffs since 2008 has rendered domestic smelters uncompetitive and unprofitable
Without an intervention that directly addresses the electricity cost burden, no trade measures,
including a chrome ore export tax or quotas, will restore meaningful viability to the country’s
ferroalloy smelters. Both miners and smelters, therefore, reject recently mooted calls for an
export tax or restrictions, as these would harm chrome ore producers without materially
assisting smelter recovery.
The solution for restarting ferrochrome, silicon and manganese smelters is clear: the
sustainable provision of electricity at globally competitive tariffs, not measures that
disadvantage non-integrated chrome, manganese and silica producers. Glencore and
Samancor Chrome, both operators of ferrochrome smelters, have already proposed a solution
requiring no subsidies from government, Eskom or other mining companies.