Creation of a full duty rebate facility on titanium dioxide

02 Feb 2024

The International Trade Administration Commission (‘the Commission’) considered an application by Ferro South Africa (Pty) Ltd (the “Applicant” or “Ferro”), for the creation of a full duty rebate on titanium dioxide classifiable under tariff subheading 3206.11 for use in the manufacture of white masterbatch classifiable under tariff subheading 3206.19.

The Commission considered all the relevant information available at its disposal. In particular, it considered the following factors:

• At the time of evaluating the application, there was no local manufacturer of titanium dioxide in the Southern African Customs Union (SACU) area. However, Nyanza Light Metals (“Nyanza”), a local company, has undertaken to produce titanium dioxide domestically. Nyanza anticipated to start construction of the main plant in Quarter 2 of 2023 and is aiming for commercial production to commence in Quarter 1 of 2025.

• Titanium dioxide constitutes a significant portion of the Applicant’s total cost of production, which is indicative of the potential cost raising impact on manufacturers of white masterbatch.

• Amongst other comments considered during the investigation, the Commission noted that Nyanza submitted its support for the application based on the condition that the rebate facility be made temporary and be removed once it commences with production.

The Commission recommended that, a rebate facility be created for titanium dioxide, classifiable under tariff subheading 3206.11, for use in the manufacture of white masterbatch, classifiable under tariff subheading 3206.19.90, in such quantities, at such times and subject to such conditions as ITAC may allow by specific permit provided the product is not available in the SACU market.

The Commission further recommended limiting the validity period of the rebate facility to 30 months from the date of implementation to support domestic production of titanium dioxide.

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Report 670