The South African government has launched a comprehensive rescue plan to revive the country’s ailing ferrochrome industry, which has suffered major setbacks due to rising production costs, power supply challenges, and increased global competition. The Cabinet has approved a set of urgent policy and regulatory interventions aimed at halting the sector’s decline and stimulating industrial recovery.
Chrome ore will now be subject to export control measures. Exporters will be required to obtain permits from the International Trade Administration Commission (Itac), in a move designed to encourage domestic beneficiation and protect local ferrochrome production.
The Department of Electricity and Energy has been tasked with finalising a tariff realignment deal between government and industry to ease the burden of high electricity prices on smelters. While specific terms remain undisclosed, the model may resemble existing Negotiated Pricing Agreements (NPAs), which offer lower rates for large industrial users like South32’s Hillside aluminium smelter, in return for power-use flexibility during grid stress.
Expanded SEZ incentives
The incentives framework for smelters operating within Special Economic Zones (SEZs) will be expanded to make these industrial hubs more attractive for investment and operation. A dedicated task team, comprising the departments of Mineral Resources, Trade and Industry, Energy, Transport, and National Treasury, has been formed to coordinate the response. Its mandate includes; reviewing electricity pricing models, implementing chrome export restrictions, improving logistics infrastructure and supporting domestic beneficiation through targeted incentives.
These measures come as more than half of South Africa’s 59 chrome furnaces have shut down in recent years, resulting in significant job losses and reduced smelting capacity. Government aims to reverse this trend by restoring industrial competitiveness and revitalising beneficiation efforts, even though electricity incentives could mean up to R20 billion in lost revenue annually—a cost that may be borne by other electricity users. In essence, this intervention reflects a shift toward more proactive industrial policy to preserve a key segment of South Africa’s mining and metals sector.