Four foreign chrome buyers identified

Deputy Minister Moyo

Deputy Minister Moyo

Martin Kadzere Senior Business Reporter
GOVERNMENT has identified four potential international buyers of chrome ore while issuance of export licences to local producers has started, a senior official has said.

Of the four identified buyers, one offtake agreement has been signed and three are being worked on, Deputy Mines and Mining Development Minister Fred Moyo said yesterday.

The Government lifted the four-year ban on chrome ore exports in June this year to boost foreign earnings from the sector and enhance viability of small-scale miners.

“We have identified four foreign offtakers of which one agreement has already been signed while others are being worked on,” said Mr Moyo.

“We are happy with the progress. A few (export) licences have already been issued to local chrome producers.”

The Government had imposed a ban on chrome ore exports in 2011 to encourage companies to beneficiate the mineral. However, the ban had a negative impact on producers, particularly small-scale miners, some who were forced to shut down. The 2011 ban was not the first as Government in 2007 suspended raw chrome exports.

After lifting the ban in 2009, the chrome sub-sector continued to experience challenges.

These included lack of effective accounting framework for chrome ore volumes and values that were being exported through the port of Maputo, lack of a well-coordinated administration and monitoring framework for production, marketing and export of chrome ore and environmental degradation that resulted from uncontrolled mining of chrome ore.

The Government created a special purpose vehicle to facilitate buying and selling of chrome ore from small-scale miners following the lifting of the export ban on the mineral.

The SPV, to be comprised of the Ministry of Mines and Mining Development, the Reserve Bank of Zimbabwe, Minerals Marketing Corporation Zimbabwe and Zimbabwe Revenue Authority, is meant to create efficiencies in buying and selling of chrome ore.

A 20 percent export tax on raw chrome was scrapped and royalty fees for the mineral increased from 2 percent to 5 percent while the sector was granted a special electricity tariff.

During the first six months of the year, chrome production declined by 56 percent, according to the Chamber of Mines.

Zimbabwe, alongside South Africa, holds about 90 percent of the world’s chrome reserves, according to the US Geological survey. The major producers are ZimAlloys, currently under reconstruction and Zimasco, owned by China’s Sinosteel Corporation.