Chrome Miners Left In The Lurch After Chinese Buyers Leave

By Mark Mhukayesango

Gweru, February 28, 2016 – CHROME miners in Midlands have been left stranded with tonnes of the mineral following the sudden closure of Chinese firms which used to buy the stone from them within the province at the beginning of this year.

Chinese buyers like Jin An, Nelson Holdings among others have been the sole buyers of chrome since the closure of Zimasco furnaces in December last year but have since shut down due to operational challenges, owing to a slump in world chrome prices.

The closure of Chinese companies comes as a blow to the miners who have also been reeling under the exploitative tributary system of Zimasco which alongside ZimAlloys owns about 70 percent of mining claims along the Great Dyke.

For all the sales they make, chrome miners are expected to pay tribute fees to Zimasco.

Investigation done by RadioVOP show that the closure has also been precipitated by the dip in world ferrochrome prices which is one the major causes of the folding of Zimasco.

Nelson Holdings has been bleeding financially and is saddled with over $60 000 in salary arrears in a pending case at the Labour Court, whilst Jin An has also been facing similar challenges to the extent of dismissing workers citing inability to pay salaries.

 Due to operational challenges, Chinese buyers had drastically reduced prices per tonne of chrome from $40 to $15 and since they were monopoly, chrome miners were left with no choice.

The new year has brought bad fortunes for small scale chrome miners according to Shurugwi based chrome miner, Denford Chimwaradze.

“It is a major setback for us miners because we had worked hard to extract chrome only to find out that the Chinese had shut down. On the other hand we are not allowed to export chrome ourselves, so the situation is bad,” Chimwaradze told RadioVop.

“We are in the process of petitioning government through ZMF, so that miners’ consortiums get licenses to export because our lives depend on chrome,” said Chimwaradze who has been in the chrome business for the past two decades.

Last year government lifted the ban on raw chrome exports, following an outcry by chrome miners, but the lifting of the embargo seems not to translate to good fortunes for the miners.

Government is in the process of awarding companies licenses, but denied Zimasco and ZimAlloys exporting rights.

Manyowa, a chrome miner in Mashava said the decision to shut down by Chinese buyers was worse than receiving meagre amounts for their produce.

“Some Chinese companies which I used to supply have closed down saying the international prices are low,” lamented Manyowa.

Manyowa will in the meantime focus on gold panning as a possible avenue for income since her chrome business depended on the Chinese.

For a long time, Chinese buyers were accused of skewing chrome tonnage in their favour, exploiting miners who bear the brunt of extracting chrome, whilst they are also expected to pay tribute to Zimasco.

Costs of extraction to delivery are pegged at $55, whilst earning $60 per tonne, translating to $5 profit which the miners say is not sustainable.

Isaac Chivendere, Shurugwi Small Scale Miners district chairperson lamented lack of political will to assist chrome miners.

“Government has been promising to assist us through a furnace which was going to be constructed here in the Midlands, but nothing has been done. If the furnace had been erected, we would not be grappling with Chinese who are shrewd,” bemoaned Chivendere.

“We could be selling our own chrome, but now we have been crippled by this closure, whilst our own local companies cannot help,” he said.

Chivendere said miners were hoping that soon Portnex, a South African Company running Zimasco would soon resume operations.

“Portnex could consume a third of our chrome which is better than having tonnes of chrome wasting away. We should be looking at life after the Chinese because they have often disappointed us,” Chivendere told RadioVOP.

Government created a Special Purpose Vehicle (SPV), which hiked prices to $80 on delivery through the Special Purpose Vehicle (SPV).

Zimbabwe Miners Federation (ZMF) spokesperson, Dosman Mangisi blamed the current chaos in the chrome industry on the monopoly of the Chinese.

“We have always encouraged local buyers to show their interest, who should also think in line of value addition. It is because of the monopoly of the Chinese, the situation could be better with more players,” said Mangisi.

Mangisis added that government was in the process of restoring competition on the chrome market so as improve chrome prices.

As part of strategies to restore competition onto the chrome market, Mangisi said ZMF was in the process of engaging other partners interested in buying chrome.

 

The chrome mining sector has among other factors been hampered by a sharp decline in world metal prices, whilst the ban on the chrome exports also made small scale miners susceptible to dubious chrome dealers who dictated the prices.