Zim seeks chrome breakthrough
Windhoek – Zimbabwe’s new Mines Minister Walter Chidhakwa says the government is likely to review its policy on a ban on exports of unprocessed chrome, in a bid to revive the country’s chrome mining sector.
Exports of unprocessed chrome are banned under Zimbabwean law and lobbying by mining companies over the past two years to have the moratorium lifted have been unsuccessful.
Zimbabwe granted a temporary export window to allow mining companies to export raw chrome in 2009 but reinforced the ban in 2011.
Limited chrome smelting capacity is partially to blame for the problems affecting the sector.
Chrome producers in Zimbabwe have also been grappling with high electricity charges and intermittent power supplies.
Zim Alloys Chrome, believed to be Zimbabwe’s second-largest producer of ferrochrome, has in recent years struggled to raise capital to finance furnace refurbishments and re-opening of its mining operations.
Sinosteel Corp-owned Zimasco, the country’s largest producer of high-carbon ferrochrome, scaled down capacity to between 40 percent and 50 percent in 2012 citing a difficult operating environment compounded by the fall in prices and reduced demand for the commodity in key markets such as Europe and the Americas.
“We are working on reviewing the policy positions given the circumstances. So far I have had discussions with Zimasco and Zim Alloys and I understand that one is currently operating at between 40-50 percent whilst Zim Alloys is trying to find ways to get back online,” Minister Chidhakwa said.
Zim Alloys, which has been struggling to raise capital to rebuild smelting furnaces, failed to recapitalise following the relaxation of the chrome ore exports ban in 2009.
Last year, a Parliamentary Committee on Mines and Energy recommended that the government come up with a statutory instrument compelling Zim Alloys and Zimasco to release excess chrome reserves to allow fresh investors into the sector.
The committee also noted that Zim Alloys’ chances of revival remained minimal if its shareholders did not raise the requisite capital.
Minister Chidhakwa observed that companies like Zim Alloys had failed to take advantage of the export window granted in 2009.
“There were conditions which companies were supposed to meet and one of them being that government expected them to refurbish and mobilise capital to invest in new equipment, a condition it appears, was not met,” Chidhakwa said.
“If these two companies (Zimasco and Zim Alloys) are not operating optimally, then it means small scale-miners which were relying on them for smelting are virtually out of business.”
He said the government would seek solutions that would revive the sector within the context of adhering to a policy of value local addition.
“We are also concerned with job losses in the sector and we are holding discussions on those issues to see the necessary steps to take,” Chidhakwa said.
Zimbabwe holds the world’s second-largest reserves of chrome, with most of the deposits situated along the Great Dyke.
The Great Dyke is a 530km-long mineral strike stretching from the central parts of the country to north central Zimbabwe. It is said to hold about 10 billion tonnes of unproven reserves of chrome, almost 70 percent of which are split between Zim Alloys and Zimasco.
“Some of the chrome claims by the two companies were pegged as far back as 1904, a situation which has made it difficult for new entrants, and especially indigenous players, to actively participate in the sector,” the Parliamentary Committee on Mines said last year.