Zimbabwe to ban raw chrome exports – Minister

1st June 2009 By: Oscar Nkala - Creamer Media Correspondent

BULAWAYO (miningweekly.com) – The Zimbabwe government says it will soon impose a law to ban the export of raw chrome.

It will hold a follow-up meeting with producers and chromite exporters to explain its position – the key element of which is a statutory insistence on value addition to the mineral before it can be traded on the international markets.

Zimbabwe is believed to have some of the world’s largest, but least exploited, chrome reserves.

Speaking to journalists on the sidelines of the Common Market for Eastern and Southern Africa (Comesa) summit in the resort town of Victoria Falls, Mines and Mining Development Minister Obert Mpofu said the proposed ban on raw chrome exports was a loss-control measure, which aimed to plug one of the major holes through which the country had been losing a lot of revenue.

“We have already spoken to some producers and exporters on the issue. The country is losing a lot of revenue through the unregulated sale of such high value minerals resources as chrome and chromite products, which would generate huge revenues if sold through the right channels,” Mpofu said.

He said some producers, such as the Zimbabwe Mining and Smelting Company (Zimasco) and Zimbabwe Alloys, were already smelting raw chrome into such semi-finished products as ferrochrome.

Mpofu said the reform of the chrome sector would also seek to promote small-scale miners by supporting them in setting up smelting plants.

“The government will seek to promote small-scale miners while imposing this total ban on chrome exports before value-addition. The international market is still very good for chrome, so we hope to cash in while it lasts,” he said.

Mpofu said Zimbabwe still had abundant buyers for its chrome products, mainly in South Africa, China and Europe which were willing to buy stockpiles of the mineral.

Chrome, which is found mostly in the Midlands province along the Great Dyke which also bears huge gold reserves, is one of the minerals listed by the new government as strategic for offering chances for high revenue earnings through value addition and, therefore, vital to restarting Zimbabwe’s battered and idle economic engines.

Shurugwi, Mutorashanga, Lalapanzi and Guinea Fowl all produce high-grade chrome. In its brief on minerals, the government’s economic recovery blue-print, the ‘Short-Term Emergency Recovery Programme’, or STERP, gives the exploitation of chrome a top priority alongside other metals.

“The inclusive government will, therefore, take advantage of the existing beneficiation facilities to refine all important metals, which include chrome, copper, nickel and iron-ore,” the STERP document reads in part.

The plan also identifies the current low level of beneficiation and value addition to Zimbabwean mineral resources as limiting the contribution of the mining sector to the overall economic revival plan.

Through STERP, the government also intends to increase the beneficiation and value addition for gold, platinum, nickel, copper, coal, coke among other mineral products. 

Mpofu said the draft ban, which includes hefty penalties for export of raw materials which could be pre-processed in the country, would be enforced as soon as the Parliamentary Legal Committee approved it.

Among other benefaction alternatives, Zimbabwe also seeks to establish several diamond cutting and polishing factories to tap into its increasing diamond wealth. 

Economist Eric Bloch tells Mining Weekly Online that while the government’s plan sounds ambitious and full of good intentions, the implementation would always be a problem, unless international investors were called into Zimbabwe’s benefaction business, which was far-from developed.

“I do not see it taking off if the government wants to set up and take charge of these processing centres. It can only work if they invite those private investors who have the money and the expertise to set up the benefaction centres for which ever minerals they want to handle.

“Botswana’s diamond benefaction industry is not even two years old, but it has been a huge success because they opened up and attracted the right people for the cutting and polishing business. That expertise is being offered now to locals, which is a plus for mining related knowledge and technology transfer,” Bloch said.

Zimbabwe’s coalition government has pinned all its hopes for national economic revival on the resuscitation of the mining sector because of the huge and widely varied mineral reserves it boasts of. Prior to the beginning of the economic meltdown in 1999, mining was the top contributor of the country’s foreign currency earnings.