South Africa: SA Mining Sector Jolted By Government Chrome Tax, Beneficiation Proposals

'Beneficiation' is the artless term that speaks to the processing of raw minerals and metals into finished, industrial products. And a tax on chrome exports is seen as one way of achieving this goal.

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 proposals surfaced in an industrial development strategy issued this week by the Department of Trade, Industry and Competition.

Beneficiation is the artless term that speaks to the processing of raw minerals and metals into finished, industrial products. And a tax on chrome exports is seen as one way of achieving this goal by supporting a domestic ferrechrome industry that has collapsed in the face of surging power prices and Chinese dominance.

"Institute export tax and quota for the chrome industry," is one of the policy targets laid out in the document.

"A review of mining legislation on the allocation of mineral rights is critical to enable the government to attach conditions that must facilitate beneficiation. This shift is crucial because it will allow beneficiation objectives to be embedded in mining licensing decisions," it says.

That would effectively boil down to: if you want a mining right, show how you plan to transform the minerals into a higher-value end product in South Africa.

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