Is a chrome export tax a solution to South Africa’s illegal mining and mineral smuggling crisis?

Mineral and petroleum resources minister Gwede Mantashe has expressed support for the idea of introducing an export tax on chrome, but referred to it as “a blunt instrument” if used in isolation.

The minister is keen on government exploring an export tax on raw chrome ore as one tool among many, but he rejects the idea that such a tax alone will fix the problem.

Mantashe believes the rest of the value chain has to be working, especially electricity costs and smelter viability.

According to a report in the Business Day, he believes such taxes must be paired with other measures, such as stable and affordable electricity supply, a corrected tariff regime for mining and upskilling of the value chain.

Speaking to Stephen Grootes on The Money Show, mining analyst David van Wyk says an export tax could work, under certain conditions.

"What would work...create a central buying agency for these minerals, so you can only sell them to you, and then sell forward into the global market," said Van Wyk.

"...so whatever minerals we are having, if we really want those minerals to work for us, we need to actually take control of the flow of those minerals out of the country. And the only ay to stop the illegal flow of minerals is through a central buying agency," added Van Wyk. 

Listen to the interview in the audio player below.