The South African mining sector has reacted with alarm to government proposals to impose an export tax and quotas for the chrome industry and to attach beneficiation measures to the issuance of mining rights.

The reaction comes in the wake of the Department of Trade, Industry and Competition’s (DTIC) newly published industrial development strategy (IDS), approved by cabinet last week, which proposes a review of mining legislation so that the state can attach beneficiation conditions to the allocation of mineral rights.

The document says this shift would allow beneficiation objectives to be “embedded in mining licensing decisions”. It also places a chrome export tax and quota squarely back on the government’s industrial-policy agenda, despite previous indications from the mining department that such a tax, on its own, would be a “blunt instrument”.

The Minerals Council South Africa said it will review the government’s Industrial Development Strategy 2026 announced on 8 June 2026 by the DTIC before meeting with officials, while they reiterate that mining and beneficiation are separate and distinct economic sectors, and that beneficiation cannot and must not be imposed on mining. Specific measures must be introduced to incentivise and attract investments to stimulate industrialisation and the diversification of the economy.

Minerals Council South Africa is in talks with the government about beneficiation strategy and the proposed chrome ore export tax

The Strategy includes proposals on a tax and quotas on chrome ore exports as well as linking conditions regarding beneficiation to the issuance of mining rights.

The Minerals Council, whose members represent 90% of South Africa’s annual mineral production by value, said it will study the Strategy before engaging government on its contents.

In an article published in November 2025 Mzila Mthenjane, CEO of the Minerals Council said: “It is an unfortunate policy intention from the Department of Trade, Industry and Competition, which, while not yet a law, adds to the incessant policy uncertainty that is constraining investment and growth of the mining industry and the economy.”

“The proposal regarding the issuance of mining rights with ‘conditions that must facilitate beneficiation’ could potentially damage future investments in exploration and mining. The Minerals Council is engaged in talks with the Department of Mineral and Petroleum Resources about the contents of the Mineral Resources Development Bill to ensure mining laws make South Africa a globally competitive exploration and mining jurisdiction, attracting investment, growth and creating job opportunities.”

“Mining and beneficiation are separate and distinct economic sectors in the mineral value chain. Beneficiation cannot, and must not, be imposed on mining because beneficiation forms part of manufacturing and overall industrialisation. As such, specific measures must be introduced to incentivise and attract investments to stimulate industrialisation and the diversification of our economy,” says Mthenjane.

“The Minerals Council reiterates that the supply of chrome ore for South Africa’s ferrochrome industry is not the reason for the reduced level of smelting of the key ingredient for stainless steel production. Electricity tariff increases of more than 900% since 2008 have made South Africa’s ferroalloys industry globally uncompetitive and shut unprofitable smelters. The deindustrialisation trajectory is also attributable in part to unaffordable electricity.”

“A well-considered economic plan, not mineral export taxes or quotas, will drive industrialised growth,” said Mthenjane.

“The absence of a co-ordinated and coherent economic development plan that harnesses South Africa’s mineral endowment, capability of its people and world class capital markets continues to sow confusion in policy making within government.”

“In mid-October 2025, Fastmarkets senior analyst Robert Cartman estimated that South African ferrochrome production would fall “towards 2 million tons” from between 3 million and 3.3 million tons in 2024. If the environment for smelters remains unchanged, “then another pullback in South African output for 2026 as a whole is reasonable and output could conceivably come in at 1 million to 1.5 million tons,” he said.

“China has installed ferrochrome capacity of some 14 million tons, with rapid expansion since 2000 to meet domestic demand for stainless steel, overtaking South Africa as the leading source of ferrochrome which it forfeited during the past 17 years when it endured constrained electricity generation and soaring tariff increases.”

“A decade ago, South Africa had seven major ferrochrome producers, with installed capacity of 5 million tons, and the country accounted for a third of global ferrochrome production. China was slightly higher at 37%.”

“Talk of imposing a chrome export tax on this second fastest growing sector (after manganese) in the mining industry without full and open consultations with all stakeholders stands in stark contrast to the efforts of the Minerals Council and the Department of Mineral and Petroleum Resources to change minerals policy for the better.”

“It does not bode well for a clear economic strategy that will resonate with both domestic and international investors in an uncertain world riven by political and economic turmoil. Considering the partnerships, the government has with business to urgently and sustainably address the crises in electricity, logistics and crime and corruption, this proposed imposition of a chrome export tax and possible export quotas is remarkable for its deviation from the partnership approach to resolve economic problems.”

To read the full article published by The Minerals Council South Africa’s Mthenjane go to
https://www.mineralscouncil.org.za/component/jdownloads/?task=download.send&id=2570&catid=25