South Africa’s chrome sector, like its coal counterpart, is becoming increasingly opaque

First published in the Daily Maverick 168 weekly newspaper.

AmaranthCX has shared the maps with DM168. 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. 

The chrome mapping project also raises ecological and social red flags. In one area in Limpopo, chrome mining has taken place in rural residential areas next to homes. The scale is large and significant and heavy equipment was clearly used, yet the whole operation appears to be unregulated. How can mining take place right next to someone’s house? 

Pointedly, the mapping project has revealed the presence of at least 20 spiral plants that are not located on any legitimate mining operation. Chrome is processed in such plants and this raises the question of where such ore is being sourced. Because according to the chrome industry, a considerable amount is being exported illegally from the country. 

“It is incredibly concerning to the chrome industry – it is estimated that illegal mining could account for up to 50,000 tons in chrome ore exports per month,” ChromeSA, the main industry group, said in response to questions from DM168. ChromeSA also said it was likely that there were even more spiral plants out there than AmaranthCX’s findings suggest, which are “popping up on a regular basis to process material”. 

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. Chrome is mostly used in the making of steel and alloys, raising suspicions that much of the illegally-mined product winds up in China. South Africa accounts for more than 60% of global chrome production. 

“It mostly goes to China and there are also consignments to India ... Illegal chrome mining is linked to organised crime because it is done on a massive scale,” Louis Nel, a security consultant specialising in illegal mining, told DM168. 

It certainly seems to be the case that a thriving illicit sector has taken root. 

“The map suggests that SARS is not collecting all the mineral royalties and other taxes, it suggests that the Department of Mineral Resources and Energy (DMRE) has lost control of the chrome fields and that normal policing is ineffective, because you can’t hide excavators and dump trucks and the excavations they make. The South African state has lost sovereignty over parts of the chrome field,” AmaranthCX founder and director Paul Miller told DM168. 

The DMRE acknowledged emailed questions about the issue on 18 February, the third time they were sent, but has still not provided a response. The Department of Environment, Forestry and Fisheries referred queries to the DMRE.

Illegal chrome poses a number of challenges to legitimate industry players who do things like pay taxes, roll out social and labour plans and abide by environmental regulations. They include the likes of Anglo American Platinum, Assore, Bauba Resources, Northam Platinum, Sail, Sibanye-Stillwater, Siyanda Resources and Tharisa. 

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.