South Africa May Impose USD 100 Per Tonne Export Duty on Chrome Ore

Bloomberg, citing Stuart Elliot CEO of Merafe Resources Ltd, reported that South Africa is looking at imposing an export duty of USD 100 a tonne on chrome ore to curb exports to China.

He said "Merafe would like to see a decision on export duties and a quota system to limit chrome ore shipments by the end of the year. Export duties form part of the government's plan to encourage local beneficiation of resources before export."

He however said that banning chrome ore exports isn't on the cards.

He said "Under the government proposals, chrome ore miners would get credits if they beneficiate ore locally, or if they sell directly to domestic smelters. These credits could then be used to export a percentage of ore."

Ferrochrome production in South Africa is being displaced by China, which imports 42% of its ore. South African chrome ore exports to China increased 51% to about 4.7 million tonnes in 2011. Ferrochrome exports from South Africa to China increased 18% to 1.1 million tonnes in 2011.

China imported 1.8 million tonnes in 2011. South African ferrochrome output declined 9% or about 309,000 tonnes to 3.28 million tonnes in 2011 while Chinese production rose 13% to 2.5 million tonnes.

Merafe is part-owner with Xstrata Plc of the world's biggest ferrochrome producer.