A sharp increase in the price of chrome ore in international markets, especially in China, has sparked a huge demand for chrome mining concessions in Zimbabwe, the Zimbabwe Miners Federation (ZMF) said this week.
Chrome is an important base metal mainly used in the stainless-steel industry. China is the world’s biggest consumer of chrome.
The surge in price and demand is attributed to a significant stock deficit on the international market. Zimbabwe is the second largest ferrochrome and chromite ore producer in Africa supplying 60% of its product to China.
In addition to price surge, ZMF said the sudden interest in Zimbabwe’s chrome mining concessions by investors has also been triggered by the easing of restrictions put in place to curb the spread of the Covid-19 which hit global supply chains.
Governments imposed sweeping controls of movements in an attempt to slow the spread of the virus. Consequently, the sector experienced levels of volatility last year, resulting in the price of chrome ore in China slump to around US$70 per tonne depending on the grades.
Currently, chrome ore prices in China have gone up to US$200 per tonne, depending on the grade.
The low stocks that came as a result of lockdowns as chrome miners halted operations and withholding their product.
“There is a rush on chrome mining at the moment because the international price has been lucrative. This has been driven by the loosening of Covid-19 restrictions. Chrome is fetching a good price on the global market,” ZMF secretary for external affairs, Gift Karanda, said.
Minerals Marketing Corporation of Zimbabwe general manager Tongai Muzenda said: “…the increase in price in China has been as a result of Chinese stocks that have come down but on the European from the price is actually going down because they still have stocks.”
Restrictions imposed to curb the increase of the Covid-19 pandemic resulted in China’s chrome ore stocks at its ports declining significantly, leading to some upward pressure on prices.
Chrome mining activities in Zimbabwe is mainly carried out along the Great Dyke and most of the claims are located in Mutorashanga, Chegutu, Kadoma, Kwekwe and Lalapanzi.
The Great Dyke is estimated to be home to about 10bn tonnes of unproven reserves.
Zimbabwe is one of the two five producers of chrome in the world and due to sanctions, China has been the Southern African nation’s biggest market. BusinessTimes