Imposing an export tax and vice versa a tax on imports will always be controversial with opposing views generally worlds apart. A recent proposal by the South African government to impose an export tax on chrome ore and the latest scrap metal policies to be implemented certainly has drawn a plethora of views, both for and against depending whether the proposals/taxes benefit your business or not.
In the last issue I highlighted how at the beginning of August 2021 the new South African export duties on scrap metal came into effect and the government’s decision to extend the price preference system (PPS). Scrap metal, widely seen as a strategic resource, is an important feedstock in the production of downstream metals due to the relatively lower energy consumption and its lower carbon footprint versus other metal production processes. In recent years we have seen steel makers such as SA Steel Mills, Cisco, United Heavy Industries, Fortune Steel, Agni, SA Steelworks, Unica Iron and Steel and Veer Steel established. They all use scrap metal as their input source and through these companies many new formal employment opportunities have been created. So keeping this strategic resource at home might not be a bad idea.
The point of my editorial was however, we should be looking at imposing duties on the thousands of components and products that are being imported from the likes of China at prices well below what is the cost price of what is made locally. However, what has become even more important is the assault on our environment and local resources by international companies. Chief suspects are Australia and China and they have been at it for many years.
It becomes ironic when you look at the political spat that is happening over commodities between these two counties and South Africa is the country to benefit because tons of iron ore and coal is being shipped to China from here and not from Australia as has been done for many years. As a result South Africa even boasts of trade surpluses these days. Through these difficult times of COVID-19 and corruption the taxes enjoyed by the government have certainly been a saviour for our country.
But let us not be deflected away from the real concerning issues with a specific look at areas such as South Africa’s West Coast – the arid, hauntingly beautiful stretch of otherwise largely untouched public and private farmland abutting the sparkling Atlantic Ocean stretching up to the Orange River. Long stretches of pristine coastline are being affected by mining enterprises and the increasing number of prospecting and mining activities on the Cape West Coast, which has led to ecological degradation and restrictions to coastal access, according to many opposition activists. In several instances, existing sites have not been rehabilitated as required by South Africa’s Environmental Impact Assessment procedures. Incredibly fragile ecosystems are being carved up for diamond mining, oil and gas exploration and valuable heavy mineral deposits, often with damaging results.
Statements like the following are very concerning: “There have been several objections and appeals against the increase in prospecting and mining applications along the West and Northern Cape coasts, but these have been mostly ignored by the minister of environmental affairs, Barbara Creecy.” And: “The South African government is greenlighting companies to mine on vast areas along the West Coast with very little pushback and consideration for anything other than some short-term jobs and some cash in the bank.” And: “What is alarming is that the environment minister is supporting these mining activities and did not stand up and protect our coast as is required of the minister charged with protecting our coastal resources and heritage.”
It does not help that one of the chief countries involved would not dare allow that the same devastation take place on their west coast from Cape Mentelle to Cape Leeuwin.