Export tax will not save SA's struggling ferrochrome industry, says industry body

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The Minerals Council has said that the proposed introduction of an export tax on chrome ore will not address fundamental competitive issues plaguing SA's ferrochrome industry. 

This comes after Cabinet announced earlier in the week that it was considering levying such a tax as part of a raft of measures to "support domestic ferrochrome production and its chrome value-chain sector."

Ferrochrome is used in the production of stainless steel. South Africa's industry has been struggling to due increases in electricity tariffs. 

In addition to the proposed tax, the measures include the usage of energy efficiency technologies on smelters, and the adoption of cogeneration and self-generation technologies.

But the council, which represents most SA producers, said the export tax would not address the fundamental competitiveness issue of high electricity prices.

"Export taxes are generally a blunt instrument that have material unintended consequences," the council said in a statement.

"The critical component of competitiveness is the availability of a cost-effective and consistent electricity supply."

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