SA nears iron ore, steel export tax
07 December 2012
Posted by: SAIT Technical
Executive summary (SAIT Technical)
The cabinet has endorsed a recommendation to introduce an export tax on iron ore and steel to push producers to sell more locally. Iron ore producers have been biased towards exports by global price increases which is disadvantaging the local market.
Cape Town - The cabinet has endorsed a report recommending the introduction of export taxes on iron ore and steel, where appropriate, to push producers to sell more of their products domestically.
The government has been looking to protect local manufacturers who have been struggling to pay export-level prices.
"The manufacturing industry has been seriously impacted by the price increases that happened globally in iron ore, which means iron ore producers have been biased towards exports, disadvantaging the local market,” Phumla Williams, a cabinet spokesperson, told reporters on Thursday.
The recommendations, scheduled for "urgent implementation”, also seek to boost the domestic use of steel, especially as South Africa embarks on a massive infrastructure investment programme that includes new railway lines and ports.
Williams could not provide details on the potential tax but said the relevant ministries, which include the departments of minerals, trade and finance, would look into its implementation.
The market is currently dominated by iron ore producer Kumba Iron Ore [JSE:KIO], a unit of Anglo American [JSE:AGL] and the continent's biggest steel maker ArcelorMittal South Africa [JSE:ACL].