Small-scale chrome miners plead with Zim govt to lift export ban

2nd December 2011 By: Oscar Nkala

Zimbabwe’s small-scale chrome miners have called on government to reconsider its decision to ban the export of raw chrome, saying they are unable to raise the capital needed to set up their own smelters.

Raw chrome exports were banned in late 2009, but, after heavy lobbying by small-scale miners, government relented in March 2010 and gave chrome producers until April 2011 to set up their own smelters. Government argued that the country was losing millions in revenue through exporting raw minerals, including chrome.

However, the small-scale miners failed to meet the April deadline, when the government moved to enforce the ban.

Zimbabwe Miners Federation (ZMF) CEO Wellington Takavarasha says the small-scale miners are not against pre-export value addition, but argues that government needs to understand the constraints facing the miners and that setting up smelters is a capital-intensive affair that takes years.

“Value addition is indeed the way to go and small-scale chrome miners are not opposed to it. However, we are saying government should give us more time to set up smelters while continuing with the export of raw chrome. Our members are already setting up consortiums to construct smelters because the costs are beyond the means of any individual miner,” Takavarasha tells Mining Weekly.

He adds that, because of the export ban, small-scale miners in the Midlands now have huge stockpiles of nearly 30 000 t of raw chrome. “Many small-scale miners have stopped operations because they cannot continue producing a mineral that cannot be sold. “The ban has dealt us a double blow because, on the one hand, we are facing deep financial problems and, on the other, they have to use meagre resources to produce a mineral they cannot sell because of the value-addition rule,” he says.

Takavarasha says chrome producers, like businesses in other sectors in Zimbabwe, do not have easy access to credit lines.

The country has only one operational chrome smelter, run by the Chinese-owned Zimbabwe Mining & Smelting Company (Zimasco) but small-scale miners cannot use it because it is too expensive, while Zimasco does not always have enough capacity to smelt material from other producers. Small-scale miners also accuse the new Chinese owners of Zimasco of deliberately undervaluing their chrome and buying it at rates as low as $60/t, compared with the international selling price of at least $160/t.

“Zimasco is producing nearly 50 000 t of chrome each year and, because of capacity limitations, is battling to smelt this amount. “This leaves small-scale miners stranded with their product as they are reluctant to sell to the Chinese at subeconomic rates,” he says.

Other chrome industry sources say the ban has led to an upsurge in the smuggling of raw chrome into South Africa and Mozambique, from where it enters the international market. “This ban has not stopped the export of raw chrome. On the contrary, government is losing more revenue now than ever before because miners have found smart ways of smuggling raw chrome into the regional market and some can even send it straight to China from here. “Rampant corruption at the border posts makes it very easy for locals who are part of the Chinese-run smuggling syndicates to export chrome in bulk,” says one miner, who requested anonymity.

However, Deputy Mines and Mining Development Minister Gift Chimanikire says government will not review the ban. “When the ban was effected in 2009, the miners protested and in March 2010 government gave in to their demands and allowed them a 12-month grace period to set up smelters. “When that ended in April this year, none of them had made any effort to set up their own smelters. I want to say to them that the door has been shut and there will be no further discussions or compromise on that issue.”