It is reported that South African ferrochrome industry pleaded for immediate government intervention to protect its currently successful business.

Industry players fear that the industry will stagnate if government does not intervene to protect them from China's imports of South Africa's chrome ore, as well as the higher electricity tariffs. If this is not done, the industry's long term sustainability in South Africa will, they claim, be negatively impacted.

A delegation from the industry representing ferrochrome players like Xstrata, Samancor, Hernic Ferrochrome, International Ferro Metals and TATA Ferrochrome submitted a proposal to the Portfolio Committee for Mineral Resources. These players represent about 90% of the ferrochrome being produced in South Africa.

They are asking government to impose a duty of USD 100 per tonne on ore being exported, with a stipulation that that mines may export only 30% of their chrome ore.

Mr Deon Dreyer MD of Xstrata's chrome division said that the strong rand and rising electricity prices could cut down the local ferrochrome industry. He added that "If the government is serious about the processing of minerals in the local industry, it has to intervene, otherwise it won't pay us to invest in processing plants."

He points out that imposing a tariff will underscore government's commitment to processing in South Africa. The proposed tariff is based on investment in, for example, a smelter and what is necessary to earn a return on it about ZAR 700 per tonne of ore.

(Sourced from www.fin24.com)