From MiningWeekly. Story by Martin Creamer.

Black South African interests are giving South Africa’s once-mighty ferrochrome business the cold shoulder.

(About 80 percent of the world’s ferrochrome is used to produce stainless steel. Most of the world’s ferrochrome comes from South Africa, Kazakhstan and India.)

The value-adding pursuit, which puts six times more value into chrome and generates three times more jobs than mere raw chrome exportation, was last week ditched by Royal Bafokeng Holdings, the investment arm of the 300-strong Bafokeng community, which has long been associated with chrome.

(Earlier, value-adding was ditched) by Patrice Motsepe’s African Rainbow Minerals (ARM), which first opted out of ferrochrome in Machadodorp with its Assmang partner and then chose to close the Machadodorp ferroalloys operation altogether and relocate to a new ferroalloys project in Malaysia.

Both steps represent a serious indictment of the government’s beneficiation policy, which is failing when it comes to chrome beneficiation on the scarcity of competitively priced electricity and a lack of incentivisation.

(Beneficiation entails transforming a mineral or combination of minerals to a higher-value product for export or local consumption. The term is used interchangeably with “value-added,” according to a definition by the South African Department of Mineral Resources.)

Ironically, China is making use of South Africa’s raw chrome exports to advance to a leadership position in ferrochrome – and is likely to advance further in coming quarters as it lowers power tariffs to stimulate energy-intensive operations and as South Africa enters the more expensive winter tariff electricity period.

Read more at MiningWeekly.