BUSINESS MAVERICK 168: South Africa’s chrome sector, like its coal counterpart, is becoming increasingly opaque

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Mining consultancy AmaranthCX, using Google Earth and other sources, has put together a detailed map of South Africa’s chrome mining sector. It reveals at least 20 spiral or wash plants that are not located on any legitimate or regulated mine. The suspicions are that illicit ore is processed in some of these plants. The industry estimates that more than 10% of South Africa’s chrome exports are off the grid.

This follows its comprehensive mapping of South Africa’s coal operations, which among other things showed companies with apparent mining rights adjacent to protected areas.

According to data compiled by the Minerals Council South Africa, in 2020 the output from South Africa’s regulated chrome industry was 12.2 million tons, of which 46% or about 5.6 million tons was exported. So the illicit chrome is estimated by the industry to equal more than 10% of regulated exports. Put another way, around 600,000 tons of chrome which is not subjected to things like taxation and royalties is estimated to be stolen for export each year.

South Africa also lacks a publicly accessible online mining cadastre, which typically provides information on things such as existing mining rights, including their geographical location. It emerged in the presentation that this is now a priority and is high on the agenda of Minister Gwede Mantashe. An update is expected in six months’ time.

“It is not illegal to transport, sell or process chrome ore, so the DMRE and SAPS are limited in what action they can take,” ChromeSA said. “Mining rights are normally issued according to farm boundaries – these are large and even if a legitimate company is mining a right they may not be on the full piece of land and illegal miners could also be operational without the mining right holder being aware.

In a follow-up presentation on Wednesday 3 March, the DMRE said “a team… is currently finalising a turnaround strategy for Mpumalanga” and is finalising the “recruitment process to fill critical and vacant positions”.

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