Bloomberg reported that South African ferrochrome producers called on the government to restrict exports of unprocessed chromite, arguing that measures are needed to curb increased competition from China.

An industry grouping, which includes Xstrata Plc and Samancor Limited, in a written submission to parliament's mineral resources committee in Cape Town, said that the South African government needs to pass laws aimed at curtailing un beneficiated chromite ore exports. A tariff or duty of USD 100 per tonne of ore exported should be introduced.

South Africa produced almost 44% of the world's ferrochrome in 2008, with sales totaling about ZAR 50 billion. The country’s share of the global market though fell to 73% in 2008 from 86% in 2004, with China's share climbing to 18% from 9% over the same period.

The industry grouping said that "China is not naturally endowed with chromite ore reserves and as such the Chinese ferrochrome industry is fundamentally reliant on the import of chrome ore, with South Africa being its biggest supplier. The reduction of chrome ore exports to China will lead to increased value addition in South Africa."

Also in the industry grouping are Hernic Ferrochrome Limited, International Ferro Metals Limited and TATA Ferrochrome, a unit of India’s TATA Steel Limited, which together with Xstrata and Samancor produce about 90% of all ferrochrome in South Africa.

(Sourced from www.bloomberg.net)