SA’s chrome exports boom while its smelters cling to life
The country has finally offered cheaper electricity to its smelters, but is this enough to win back the business?
South Africa's ferrochrome smelters have received a 62c/kWh tariff in an effort to revive the struggling sector. According to Trade & Industrial Policy Strategies (Tips), chrome ore exports reached 7.3 million tonnes in the second quarter of 2026, a 28% increase from the previous year. However, ferrochrome exports decreased by 18% to 364,000 tonnes. This raises concerns about whether the local mineral beneficiation promoted by the government is being supported by South African ore or is being produced elsewhere.
The ferrochrome sector has become a symbol of South Africa's deindustrialization, leading to the question of how much export revenue could have been retained with earlier government intervention. Ferrochrome smelters operate under separate agreements, but their loss of competitiveness is evident in the decline in exports, largely due to rising Eskom tariffs.
With the new 62c/kWh tariff for ferrochrome smelters, local smelters are now more competitive with Chinese producers. Eleven of the 66 smelters in South Africa were operating just a few months ago, and the lower tariff is expected to bring more back online. This change comes as part of a government recovery plan that aimed to restore all 22 of Samancor's furnaces by September.
However, the decline in ferrochrome exports remains a concern. In the June 2026 quarter, ferrochrome exports through Mozambique fell to zero, despite the sharp increase in exports to Japan and South Korea. The costs associated with this situation remain a concern, as profitability for the sector depends on production volumes and ferrochrome prices.
Written by urgent.news from The Citizen's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
