The Sunday Mail
Tinashe Farawo —
GOVERNMENT is set to liberalise chrome mining by allocating over 50 000 hectares of mining claims to small-scale miners and smelters in a bid to boost production.
The move is expected to shore up chrome ore supplies to smelters who are battling shortages of the resource. Liberalising the sector would also result in more jobs being created, which dovetails with the aspirations of the country’s five-year economic blueprint, Zim-Asset.
Currently, the chrome mining and smelting sector is dominated by Zimasco and ZimAlloys. Smelters such as Zimasco, Afrochine and ZimAlloys have capacity to process up to 100 000 tonnes of chrome ore per month but are being hampered by in adequate supplies of chrome ore.
Mines and Mining Development Deputy Minister Engineer Fred Moyo told The Sunday Mail Business recently that Zimasco and ZimAlloys have agreed to cede some of their chrome claims to allow other players to participate in the sector.
“The chrome ore claims ceded to Government by Zimasco and ZimAlloys are going to be released to some smelters who have invested in beneficiation plants and some small-scale miners so that we can boost production,” said Eng Moyo.
Smelters require a steady supply of chrome to avoid switching off their machines, which take long to heat up once they go off. Eng Moyo said Government is also pressing ahead with encouraging local beneficiation of mineral resources so as to increase revenue generation.
Beneficiation and value addition is one of the four clusters of Zim-Asset. The country loses a lot of potential revenue through the exportation of raw minerals, only for the citizens to spend more to acquire finished products.
In 2011, Government blocked the exportation of raw chrome to promote local beneficiation. To encourage beneficiation locally, Government will only allow the exportation of chrome ore where a company has a viable business plan to set up a smelter in the country.
For instance, some companies may propose to set up a plan but will request that they be allowed to export chrome ore so as to raise funds for the establishment of a smelter.
Said Eng Moyo: “Those who have submitted business plans to set up smelters are allowed to export raw chrome on the basis that they will jointly have an account with RBZ so that the miner will be able to pay for the establishment of the smelter in the country.”
The export ban was lifted in June last year in an effort to create employment, give smelters an opportunity to retool and boost the National Railways of Zimbabwe (NRZ).
The country has since generated US$500 million in revenue from the exportation of high-carbon ferrochrome and 197 700 tonnes of chrome ore after the lifting of chrome exports.
Minerals and Marketing Corporation of Zimbabwe (MMCZ) acting general manager Mr Masimba Chandavengerwa, who chairs a committee that represents chrome ore producers and ferrochrome smelters, has said it is crucial for Government to expedite its commitment to release more claims to smelters.
“We urge Government to expedite the distribution of ceded chrome claims so that all smelters will do (their) own mining and only augment their chrome requirements by suppliers from independent producers,” he said.
Mr Chandavengerwa said the chrome ore which is being produced by miners, is not enough to satisfy the market. He also said it imperative that Government intervenes and address the contentious issue of chrome ore pricing on the local market.
“Smelters licensed to export chrome ore were buying chrome ore from small-scale producers and exporting the same at a huge margin.
“This means that the small-scale producers are subsiding the operations of the smelters,” said Mr Chandavengerwa.
The minimum purchase price for the lowest grade of chrome ore (lumpy) is at US$50 per tonne while chrome concentrate is US$80 per tonne. Chrome ore producers are expected to produce 500 million tonnes next year.
