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Export Control Guidelines on Scrap Metal Extended

March 26, 2020

Department of Trade and Industry

Amended export control guidelines on the exportation of ferrous and non-ferrous waste and scrap metal have been extended.

The trade and industry department published notification of the extension in Government Gazette 43141.

The Policy Directive limiting the export of ferrous and non-ferrous scrap metal came into force in 2013.

It set out the policy in terms of which the International Trade Administration Commission (ITAC) was to exercise its powers under the ITA Act in administering the exportation of ferrous and non-ferrous waste and scrap metal.

ITAC subsequently issued export control guidelines.

The guidelines put in place a price preference system to assist domestic users, processors and recyclers to purchase scrap metal at a preference price for local consumption before the metal is exported.

The guidelines also contained substantiated proposals on what the price percentage lower than the Metal Bulletin price as determined in Rotterdam should be.

Local foundries, mills and smelters of scrap metal are given first option to buy the scrap at the preferred price for which an export permit has been applied for.

If no interest is shown in the metal by local operators within 30 days, then the exporter is able to continue with the export plans.

The price preference system is managed by the ITAC.

In September 2018, the policy directive was renewed for nine months until 30 June 2019.

The Amended Export Control Guidelines were also extended in the same month.

According to the earlier notice, the extension was sought so that the department, together with national treasury and the trade and industry department, could “explore the introduction of an export tax on ferrous and non-ferrous waste and scrap metal and its implications for the Directive”.

In Budget 2019, the finance minister, Tito Mboweni, announced that the introduction of an export tax on scrap metal was under consideration.

Last year, the Policy Directive was extended for a further nine months until 31 March 2020 and, last week, it was extended for a further nine months from 31 March 2020 until 31 December 2020.

The extension was implemented to enable treasury and the trade, industry and competition department to finalise the implementation of an export tax on scrap metal.

The export control guidelines have been extended until 31 December 2020.