Pretoria - As South Africa continues to experience major job losses amid the raging Covid-19 pandemic and restrictions on certain businesses, the SA Communist Party (SACP) has called on the government to introduce policies restricting the exportation of raw materials, particularly chrome ore, to save jobs.
Lobby group SaveSA Smelters has been running an intense campaign, warning about impending job losses as smelters in South Africa continue to close owing to the exportation of chrome ore. SaveSA Smelters has urged the government to speed up the implementation of the mooted tax on the export of raw ore, as it announced in October last year.
SACP national spokesperson Alex Mashilo said the idea of a tax on the exportation of South Africa’s raw materials “makes sense”.
“We are not fighting any country. We are saying, it is important to drive development in South Africa. We cannot sit with this high rate of unemployment. It is unsustainable. We have a high rate of poverty, so the idea of a tax on the exportation of ore makes sense. However, in order for it to work, it has to be part of a comprehensive and high-impact manufacturing, development and employment-creating industrial strategy,” said Mashilo.
“At the moment, South Africa lacks that manufacturing, development and employment-creating industrial strategy. The country’s now so-called industrial master plans are not adequately supported in the economic framework.”
Mashilo said in the ruling tripartite alliance, incorporating the African National Congress, the SACP and the labour federation Cosatu, there are resolutions on the beneficiation of the country’s raw materials in South Africa.
“It is of critical importance for South Africa to beneficiate, to process its raw materials in the country. That is important because it creates employment. If you just dig and extract the raw materials, then you export them without any value addition, you export even the soil where the raw material came from – you are disadvantaging South Africa. You are creating employment where the material will be processed, while South Africa has a high rate of unemployment,” said Mashilo.
“There are more than 11 million South Africans who are unemployed. If you just extract the raw material, and you export them to overseas export destinations, where they will be beneficiated/processed, you are undermining employment creation in South Africa. How are we going to reduce unemployment if we do not beneficiate our mineral resources?”
Last month, SaveSA Smelters convener Lindelani Nyathikazi said the proposed introduction of an export tax on chrome ore would help resuscitate the struggling industry that sources say employs about 68,000 people.
In October last year, the Cabinet announced that it was considering levying the export tax as part of a raft of measures to support domestic ferrochrome production and its chrome value-chain sector.
Nyathikazi said some people who were opposed to the tax on chrome ore were evidently supporting the “ransacking” of the country’s mineral resources without benefiting local communities.
He reiterated that his organisation would not allow the country’s minerals to leave the country without benefiting citizens, and called on President Cyril Ramaphosa to make good on the Cabinet’s promise to protect the sector by imposing the tax with immediate effect.
“Eight months later (since October) there is still no announcement. We would like to reposition our country as the destination of choice for investors in the steel and stainless steel value chain.
“We used to be very big in the supply of steel. We had a lot of plants, and now we have lost a lot of them as companies opt to export the raw ore and beneficiate outside the country,” Nyathikazi said.
He added that when mining companies were forced to pay the export tax on raw ore, they would then consider beneficiation and value-addition processes within South Africa and in turn create much-needed jobs.
Some analysts have suggested that the introduction of the export tax on chrome and chrome ore would result in South Africa being repositioned as the global leader in ferrochrome production due to local product beneficiation, as opposed to the current position of largely exporting raw materials.
African News Agency (ANA)