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Policy Directive on the Exportation of Scrap Metal Extended

July 30, 2021

Department of Trade, Industry and Competition

The Policy Directive on the Exportation of Ferrous and Non-Ferrous Waste and Scrap Metal has been extended.

The trade, industry and competition department announced the extension in Government Gazette 44905.

The department called for comment on the extension in Gazette 44758 in June 2021.

In December 2020, the Policy Directive was extended until 31 July 2021 in order to allow for the finalization of the process on the implementation of an export tax on scrap metal.

The extension was also designed to enable consideration by the department and the International Trade Administration Commission (ITAC) on which aspects, if any, of the Policy Directive may be continued in order to complement and support the operation of the export tax on ferrous and non-ferrous waste and scrap metal.

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 ITAC was to exercise its powers under the International Trade Administration 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 2019 the Policy Directive was extended until 31 March 2020 and then further extended until 31 December 2020.

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

In the latest notice, the department pointed out that, as part of the Steel and Metal Fabrication Master Plan 1.0 adopted in February 2021, a working group on scrap metal was set up to determine which, if any or all, of the Policy Directive should remain following the commencement of the export tax on ferrous and non-ferrous waste and scrap metal.

The working group recommended that the Policy Directive be extended to provide policy certainty for the downstream beneficiation industry.

The Policy Directive has been extended for a further two years from 31 July 2021 until 31 July 2023.