Johannesburg Stock Exchange (JSE)-listed Metmar aims to become one of South Africa’s top-ten chrome players in the next ten years, chief executive officer David Ellwood said in an interview, adding any export levy on chrome would only make the country less competitive.
The commodities trader recently entered into a R61,4 million transaction to buy a further 60% of Eastern Belt Chrome, taking its ownership to 80%, in line with its new growth strategy to rapidly become a meaningful chrome player.
Metmar also has a share of Zimbabwe Alloys Chrome. “In ten years time, we would like to be a multi-country chrome player and be able to provide different grades of material to the international markets, but we see ourselves as an integrated ferrochrome producer in the long term and let’s see how that road goes,” he told Mining Weekly Online.
Ellwood was of the view that to be a significant chrome player, South Africa was “the place to be in for the long haul and for the long term”.
“About 70% of the world’s chrome reserves are in South Africa, and 15% in Zimbabwe, which means both countries combined hold 85% of the world’s reserves. Chrome is something we believe in, and the demand for chrome will continue.”
China, which does not have any of its own chrome ore sources, is positioning itself as one of the lower-cost ferrochrome producers through the import of cheap ore from South Africa. One way to mitigate this is to impose an export levy, which JSE-listed Merafe Resources believes will force the Asian giant to import more ferrochrome.
But Ellwood said Metmar did not believe that an export levy was the way to go. “Not competing in the international market would result in less material being mined or produced. This would lead to restrictions on sales and fewer jobs for South Africans,” he explained. —Reuters
