THE spike in global demand for metal-based minerals has seen Zimbabwean smelting companies increasing their prices for chrome in a move that has boosted local production, the Zimbabwe Independent has learnt.
Chrome miners have for years been crying foul over chrome price manipulation by “mafia-style” smelting companies that they accused of arm-twisting the government into crafting a policy that banned raw chrome exports.
Government’s ban of chrome fines worsened the situation in relation to the state of the chrome mining sector that was infested by buyers who were milking miners through buying at US$40 per tonne.
Zimasco, a major chrome buyer in Zimbabwe, was paying about US$38 a tonne with a component in local currency at the interbank rate. Global prices then were ranging between US$150 and US$200 per tonne.
However, the Independent is reliably informed that the local buyers have since increased the price to US$70 per tonne, in a situation that has boosted production among small-scale players and tributaries.
Currently, the biggest consumer of raw chrome is Afrochine among several Chinese smelting companies dotted around the Great Dyke.
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In an interview this week, Zimbabwe Miners Federation (ZMF) secretary for external affairs Gift Karanda said the situation in the chrome mining sector looks positive on the back of increasing prices.
“The chrome market has been firming up in terms of prices at the moment and also looking at the aspect that as a country we have been exporting our chrome as ferrochrome, therefore the prices have been good. On the other hand, the companies beneficiating the chrome and buying the mineral from local producers have since increased their price to US$70 from about US$50 per tonne. This has boosted production from small-scale producers while high demand has also been recorded on the international market. Recently there has been a spike in demand for metal minerals looking at lithium among others,” he said.
On the issue of chrome fines, there are indications that the government has been silent and no ban has been effected to date. The government banned the export of raw chrome fines in 2023.
Chrome miners had been appealing to the government to extend its deadline on the export of raw chrome fines after the fines were exempted from the previous ban on chrome exports.
Miners claimed that the fundamentals were not yet right for the ban on chrome fines considering the experiences of the ban on raw chrome exports which at one point saw some smelters colluding in the manipulation of prices.
“Government was supposed to effect the ban last year but they have been silent on the matter. It is critical to note that despite the silence, the government has been engaging various stakeholders in the sector over the matter,” Karanda said.
A spike in demand for construction projects triggered the surge in ferrochrome prices on the global market.
As the demand for ferrochrome on the global market soars, Zimbabwe however has become a target for companies that are looking at dumping second-hand chrome smelters following the promulgation of an environmental law prohibiting the use of heavy environmentally unfriendly machinery.
In 2018, the State Council of China announced that it will ban new steel, coke, chrome and primary aluminium capacity in the Beijing-Tianjin-Hebei and Yangtze River Delta regions. Within this region, Hebei’s steel production was expected to be further limited to 200 million tonnes by 2020. This comes after China is pushing heavy industries, “especially those involved in chrome smelting” to consider new environmentally-friendly technologies.
This meant that by migrating to new technologies, countries like Zimbabwe became a lucrative and ready market to dump the old smelting machinery.
The Independent is informed that several chrome companies in Zimbabwe have since been approached by foreign companies with the intention of striking deals on the smelters.
The country holds the world’s second-largest reserves of high-grade chromium ore after South Africa, with deposits of about 10 billion tonnes, equivalent to around 12% of the global total, according to the Ministry of Mines and Mining Development.