South Africa Chrome Ore Export Control + Export Tax Development (ITAC Permit Regime)

Mechanism

The package operates through three distinct instruments stacked into a single ferrochrome-rescue policy:

1. ITAC export-permit requirement (binding constraint). Cabinet on 25 Jun 2025 directed the Minister of Trade, Industry and Competition to use his powers under sections 6 and 27 of the International Trade Administration Act 71 of 2002 to designate chrome ore as a good subject to export control. The DTIC notice placing chrome ore under control was published 3 Oct 2025 in Government Gazette 53477 (GoN 6712). Once the consultation period closes (31 Oct 2025) and a final notice is gazetted, every exporter of chrome ore must hold an ITAC-issued permit before dispatch — the permit being the discretionary lever the state can use to allocate ore between exports and domestic smelters.

2. Chrome ore export tax (under development). Cabinet approved the initiative to develop an export tax. The rate is not yet set in primary legislation; market reporting and Mining Indaba commentary cite ~25% as the working number. The tax requires a separate process via the National Treasury / SARS and is not yet gazetted — track it as a watch-item.

3. SEZ incentives + electricity tariff relief. Cabinet approved parallel work by the Department of Electricity and Energy with the ferrochrome industry to realign tariffs (ferrochrome is one of South Africa's most electricity-intensive industries; Eskom tariffs have been the binding constraint), plus expansion of SEZ incentives for ferrochrome smelters. These are the carrots to the export-control stick.

Why severity 4

• Global supply share. South Africa is the dominant marginal

supplier of seaborne chrome ore (>70% of global seaborne chrome ore exports per the Minerals Council). A discretionary permit regime gives Pretoria direct authority over a globally load-bearing supply chain.

• Downstream stainless-steel exposure. Chinese ferrochrome

smelters depend on SA chrome ore; permit denials or quota rationing translate one-for-one into Chinese stainless-steel cost. China has been the principal beneficiary of the liberalised chrome ore export regime since the post-1994 commodity-export-liberalisation era.

• **First hard quantitative restriction on a major SA mineral

export since 1994.** This is a structural break, not an incremental tweak. It complements but goes substantially beyond the May 2025 Critical Minerals and Metals Strategy (filed as 2025-05-20-south-africa-critical-minerals-metals-strategy), which was a strategy document with no binding instrument.

• Industry split. Minerals Council South Africa publicly

opposes the export tax (arguing electricity pricing is the binding constraint, not raw-ore availability). Ferrochrome smelter operators (Merafe, Samancor) support both legs.

Downstream implications

• Chinese ferrochrome cost. Likely upward pressure on ex-China

ferrochrome cost-of-production once permit issuance becomes discretionary and tax-loaded.

• **SA listed ferrochrome producers (Merafe, Tharisa, African

Rainbow Minerals).** Net beneficiaries — ore-input cost falls relative to integrated competitors abroad, plus electricity tariff relief.

• Stainless-steel pricing. Marginal ferrochrome cost feeds

directly into stainless-steel pricing — watch SLX and China-specific stainless equities.

• Critical-minerals-nationalism arc. Slots into the EM

resource-upstream-capture theme alongside Indonesia hilirisasi, Zimbabwe lithium-concentrate ban (2026-02-25), and DRC cobalt quota (2025-02-22). South Africa is the first major PGM/chrome producer to adopt the template.

Open questions

• Final permit regime gazette date — public comment closed 31

Oct 2025; final ministerial notice not yet identified.

• Export tax rate and effective date — Treasury / SARS process

ongoing; 25% is the working number but not yet legislated.

• Permit-allocation methodology — will ITAC use historical

shipper quotas, auction, or downstream-beneficiation criteria? The discretionary structure is the policy lever.

• WTO compatibility — chrome export tax may invite GATT

Article XI complaints (cf. China rare-earth panel).