Issues Affecting U.S. Ferrochromium Import Dependency

This paper addresses two issues affecting the international ferrochromium market as they pertain to the changing pattern of U. S. chromium import dependency. These issues are 1) the long-term ferrochromium production cost differential between the United States and the Republic of South Africa and 2) the ability of Zimbabwe to expand ferrochromium production and exportation. This paper draws upon the data and analyses of a recent Bureau of Mines Minerals availability Program appraisal that evaluated the international availability of chromium in the form of chromite and ferrochromium from 10 market economy countries. South African ferrochromium producers are shown to have a long-term production cost advantage over U.S. producers of $0.03 to $0.04 per pound of contained chromium, in 1981 dollars. Zimbabwean ferrochromium production and exportation are expected to increase in the future. Major expansions of production capacity will be dependent upon alleviating potentially serious constraints in electric power, rail, and port facilities. In the long term, ferrochromium production costs in Zimbabwe are expected to increase faster than the rate of inflation, because as chromite mining from the podiform resources in Zimbabwe decreases, production from the Great Dyke resources will increase.