Merafe Says S. Africa Must Limit Chrome Ore Exports to China
South Africa should consider export duties and other controls to stop a surge in chrome ore sales to China so local ferrochrome makers can stay competitive, the head of Merafe Resources Ltd. (MRF) said.
South African producers of ferrochrome, made from chrome ore, have hired independent consultants to investigate the industry, and a report with proposals to control exports will be submitted to the government by the end of September, Chief Executive Officer Stuart Elliot said today in Johannesburg.
Chinese ferrochrome output rose 12 percent to 1.2 million metric tons in the year to June, compared with 0.1 percent growth to 1.85 million tons in South Africa, according to estimates by Xanten, Germany-based market research company Heinz H. Pariser. Local makers of ferrochrome, used in stainless steel production, don’t want to have to compete against Chinese buyers for chrome ore.
“The industry is struggling,” Elliot said. Royalty taxes, rising electricity costs and a proposed carbon tax will “make South Africa extremely expensive” in the medium term and will damage the industry and lead to job losses, he said.
South African exports of chrome ore to China have risen 19 percent since 2008 and totaled 3.1 million metric tons in 2010, or nearly 36 percent of total Chinese imports, according to Heinz Pariser. South African exports for the year to date totaled 2 million tons, nearly half of total Chinese imports, according to the research company.
The increase in South African chrome ore exports is attributed to rising sales by platinum producers, which mine chrome ore as a byproduct, and increasing ferrochrome production capacity in China, Elliot said.
Merafe is part-owner with Xstrata Plc (XTA) of the world’s biggest ferrochrome producer.
To contact the reporter on this story: Jana Marais in Johannesburg at jmarais@bloomberg.net
To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net
Rate These Stories
Rate this Page