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Government drags feet on chrome policy

 By Business Reporter – Thursday 16 April 2020

HARARE (Mining Index) – INDIGENOUS chrome miners across the great dyke have expressed concern over delays in implementation of the Chrome Development Policy, one year on after government announced the framework would be ready by July last year.

Currently, Zimbabwe does not have a chrome policy which targets the growth of chrome producers and chrome processors who beneficiate chrome ore into concentrates or ferrochrome.

The chrome policy, if implemented is expected to facilitate growth while ensuring Zimbabwe benefits from the revenue generated during the production and beneficiation processes.

In May last year, government announced the Chrome Policy was expected to steer development and attract additional investment in this key mining sub-sector.

Zimbabwe holds the world’s second largest chrome reserves with some of the world’s highest grades estimated at 900 million, approximately 12 percent of the global resource tonnes which gives Zimbabwe a competitive advantage as a supplier of chrome.

During the 35th International Chromium Development Association (ICDA) Conference held in Victoria Falls last year, Mines and Mining Development Minister Winston Chitando was quoted saying stakeholder consultations will be prioritised in crafting the policy, citing the Chrome Producers Association and Chamber of Mines as key participants involved in the framework.

According to a Chrome Producers Draft Policy dated 5 March 2019, chrome miners are expecting the plan to address the big elephant in the room, chrome pricing.

The current low predatory domestic market price of US$12 per tonne has left Zimbabwean chrome producer’s growth vulnerable with limited opportunity to grow as they primarily depend on foreign direct investment (FDI).

The draft policy stipulates the need to enforce world market based pricing both for export and domestic, with a provision to publish prices on daily basis. This will disrupt the predatory buying which is taking place inhibited on the domestic market being controlled by cartels.

“Low purchase prices are not only damaging chrome ore producers operations but also promote major opportunities for “transfer pricing” to take place. As a result Zimbabwe as a nation is losing significant foreign currency and tax revenues while at the same time opportunities to re-invest into production growth and efficiencies are being lost,” said part of the draft chrome blueprint.

Other issues outlined in the draft policy that need urgent address include access to international markets; labour; regulation of Chrome Producer Tribute agreements; sourcing; financing; environmental, safety, research and technical support; weighbridges and infrastructure support; beneficiation and value addition; marketing; security and protection of indigenous chrome miners.

There are calls for the liberalisation of the chrome sector to enable small-scale miners freely access global markets.

“Chrome ore producers face major growth challenges as there is limited access to international export market which reduces the opportunities for chrome producers to earn much needed foreign currency to help resuscitate operations,” read part of the draft policy.

The draft policy also outlines the need to regulate Chrome Producer Tribute agreements with smelters, noting non-regulation of tributors has resulted in under capitalization of tributes negatively impacting production downward impacting domestic supply.

Small-scale miners have also voiced the need to adopt a ‘no to open cast mining’ strategy for big companies whom they say should invest in machinery and technology towards underground exploitation of 20 meters and below.

Chrome miners have also noted the need for Zimbabwe to adopt a chrome model to preserve chrome reserves for future generations.

“Even the Chinese are leaving their chrome and are coming to loot ours. Strategic reserves must be kept for future generations,” said Changamire Munashe Zana, a gold miner who is also a social economic and cultural commentator.

Zimbabwe’s chrome industry is dominated and controlled by the Chinese. Major chrome producers in Zimbabwe include ZIMASCO, ZimAlloys, Jinan and Afrosheen.

Chrome miners are calling on government to protect the chrome sector from exploitation by foreigners, urging MMCZ to work with the Zimbabwe Miners Federation (ZMF) to ensure Zimbabwe retains chrome stock piles not slag.

“The chrome mining sector is under siege and what is left behind by these Chinese miners and smelters is just slag, while all the chrome is shipped to China, said Jonathan Mugumo, Mberengwa Miners Association (MBEMA) member.

Zana added that the adoption of a ‘no to open cast mining’ will ensure foreign companies will invest in machinery to exploit deep chrome reserves as they have the ability and technology.

“My opinion is if what is happening in chrome mining continues, the Chinese will mine all the top mineral and we will be left with deep chrome resources. My guess is it will be expensive to mine and with our level of technology, we might end up having a dead chrome mining sector in less than ten years,”

“Government needs to move in fast to reign in the chrome industry. I don’t think the Chinese are using our chrome at the moment, but I think they are building strategic reserves for future use. We are likely going to buy the same chrome back from them to meet our needs,” said Zana.

Chrome miners are also advocating for foreign companies investing into chrome mining to employ Zimbabweans not only as cheap labour but to take up technical and managerial positions.

Miners noted the need for foreign companies to source mining inputs from local suppliers and avoid importing products that are locally accessible.

Contacted for comment on why it has taken time to implement the chrome policy, Minerals Marketing Corporation of Zimbabwe (MMCZ) General Manager Tongai Muzenda said “These are policy issues so the ministry is the correct place to go,” before referring this publication to the Permanent Secretary in the Ministry of Mines and Mining Development Onesmo Moyo.

However, Moyo did not respond to questions sent to him at the time of publication, three weeks after being contacted for comment.

Mines and Mining Development Minister Winston Chitando only responded saying, “I will get back to you.”

In 2018, ferrochrome production stood at 350 000 tonnes, with Chitando projecting a three-fold increase in annual output of 950 000 tonnes per annum in 2020 and 1.1 million tonnes by 2023. ENDS// www.miningindex.co.zw 

 

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