DEBATE: Call for South Africa to introduce chrome ore export tax splits industry

Apr 04, 2012 | 05:06 AM |

South African ferro-chrome producers are pushing for a $100-per-tonne export tax on chrome ore. What are the arguments for the tax and against it? Metal Bulletin outlines the cases made by the two sides.  The arguments for a chrome ore export tax The export of a South African national resource at the expense of one of its major industries must stop. Cheap, unbeneficiated ore flows into China, where it is converted into ferro-chrome that comes back to haunt South Africa by undermining its own ferro-chrome producers, which are already struggling to secure a fair price amid crippling production costs.  South Africa’s chrome industry is on its knees and requires intervention. An export tax will curb the outflow of material, thereby supporting the entire chrome industry, not just the downstream production of ferro-chrome. Costs created by the tax would be passed on to customers and any revenue lost through a reduction in ore exports would be outweighed by fairer prices for both ore and ferro-chrome. The tax is likely to apply to all exporters; ferro-chrome producers are prepared to shoulder their share of the tax burden, knowing....