New scrap metals policy criticised

Fresh amendments to the policy on scrap metals will not remedy long-standing viability issues in the sector since the Department of Economic Development introduced measures a year ago to curb the exports of waste metal, according to a report in Business Day. This is the view of industry players commenting on new amendments published in September.

Non-Ferrous Metal Industries Association chairman Bob Stone said the amendments did not improve the operations of firms in the sector. “In fact, they have the potential of making the situation worse for the beneficiation industry,” he said.


Existing policy allows local buyers of scrap metal such as foundries, mills, minimills and secondary scrap processors to get it at a preferential price of 20% below the international spot price that South African exporters can get for ferrous and nonferrous waste metal.

The policy will remain in place for the next five years and will be reviewed again in a year’s time.

However scrap merchants have blamed foundries for not making valid offers to purchase scrap in an effort to frustrate their exports. Foundries have meanwhile blamed merchants for finding ways to inflate the preference price.

The International Trade Administration Commission (Itac) said the new amendments “consolidate” all the amendments made to the initial policy guidelines published in August last year.

Certain definitions were added to clarify concepts such as what a valid offer entails. “As the price preference system has only been in force for one year, it is a bit early to make any conclusive judgment on its impact,” Itac said in response to questions. “The intention of the commission is to conduct an impact study a year from the latest amendment to the guidelines.”