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(Ecofin Agency) – As the world’s largest chromium producer, South Africa relies heavily on Mozambique’s Maputo port for up to 50% of its mineral exports. However, the country is currently dealing with a severe post-election crisis that has significantly impacted its economy.
The Minerals Council of South Africa expressed particular concern on December 12 about the impact of Mozambique’s unrest on the chrome industry. Since South Africa possesses over 70% of the world’s chrome reserves and is the global leader in chrome production, the crisis has far-reaching implications.
Following the contentious victory of Daniel Chapo, the ruling party’s candidate, in Mozambique’s October 2024 presidential election, the country has been plagued by unrest and protests.
According to a civil society group, over 110 people have lost their lives so far amidst the crisis, which is disrupting the economy. Two mining companies have halted their operations in the country consequently. The Minerals Council is concerned about the situation as over 50% of South Africa’s chrome exports passed through the Maputo port in the first nine months of 2024.
Chrome concentrate prices remain buoyant, increasing from ~$290/ton (40-42%) since the start of 2024. pic.twitter.com/6HIg06933u
— TheLastQuantFund (@last_fund) July 19, 2024
South Africa exported 17.8 million tonnes of chromium in 2023. In the same year, global exports stood at 21.8 million tonnes. For now, the full impact of the Mozambican crisis on the global market–including supply and prices–is unknown. Still, demand for chromium has increased in the first months of 2024, driving up prices.
In its Q2 2024 update, the International Chromium Development Association noted that the price surge paired with greater demand from Chinese and African smelters caused production and trading to rise. Moreover, Jubilee Metals indicated in its October 2024 annual report that the average price of chromium increased by 13.8% to $296 per tonne during the financial year ending June 2024.
This article was initially published in French by Emiliano Tossou
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