Chrome miners seek freedom

SMALL-scale chrome miners want to be released from the tributary agreements they currently have with two of the country’s biggest chrome mining concerns — Zimasco and Zimalloys — and be given an opportunity to sell their ore to the special purpose vehicle (SPV) that was recently launched by Government. A tributary is an arrangement through which a miner gets mining rights to exploit a claim that is owned by a lessor.

Last week, Government announced that “no producers will be allowed to sell chrome ore outside the SPV except those on tributary agreements”.

Authorities, who are deliberately trying to eliminate middlemen, intend to ship most of the chrome ore to Russia, which has a ready market for the commodity.

But the new policy means small-scale chrome producers, most of whom are mining low grade ore, will have no option but to sell their product to Zimasco and Zimalloys. Statistics from the Zimbabwe Miners Federation (ZMF) indicate that 78 percent of small-scale chrome miners are on tributary agreements with either of the two big miners, which own most of the choicest claims, while only 10 percent are regarded as truly independent.

For example, Zimasco has 890 smallscale chrome miners operating under the tributary agreements.

What is particularly worrying for the small-scale miners is the fact that the big mines, in addition to buying chrome ore at a discount, are in arrears.

Chrome ore suppliers to Zimasco, for example, have not been paid for the past 10 months. While the two mining giants are paying US$30 per tonne for raw chrome ore - considered to be below the small miner’s production costs per tonne of between US$35 and US$40 per tonne — the SPV that has been created by Government is proposing to pay US$80 per tonne.

It is the same amount that is being paid by Afrochine, the Chinese chrome smelting concern based in Selous near Chegutu.

An ordinary miner, who doesn’t have sophisticated machinery, produces an average of 100 tonnes of chrome ore per month. Also, under current tributary agreements, chrome miners are expected to pay 5 percent to the lessor and retain the remainder.

But interest groups are currently putting pressure on Government to consider legal instruments that will force the two mining houses to release mining ground that is not within their short to medium term horizons under the “use it or lose it” principle.

This way, they believe, their monopoly will also be addressed.

In particular, Zimasco, which began mining operations in Shurugwi in 1926 and is 73 percent owned by China’s Sinosteel Corporation, is understood to hold more than 10 000 chrome claims, while Zimalloys - currently under judicial management - has more than 6 000 claims.

On the overall, mining experts contend that the mining claims held by the two translate to 95 percent of those that are currently available in the Great Dyke.

This, however, cannot be independently verified.

It is also believed that Government must consider an interim measure that allows small-scale miners to sell to their ore to the SPV while Zimasco and Zimalloys put their houses in order.

Government lifted a ban on chrome ore exposed that had been imposed in April 2011 in order to safeguard the interests of small-scale producers who bore the brunt of the embargo. It however remains committed to add value to the commodity.

At a meeting of chrome producers held recently at the Minerals Marketing Corporation of Zimbabwe (MMCZ), ZMF president Ms Apolonia Muzverengwi indicated that there was a danger that the SPV would not cater for the interests of the small miners.

“If SPV is going to buy free chrome, then the plight of the majority of chrome miners is not addressed. It is only 10 percent of miners who are independent and are being saved and benefiting from the lift of the ban; 90 percent cannot sell and enjoy the benefits of the lift of the ban because they have remained in bondage of tribute or contracts agreement they signed with the two giant companies, Zimalloys and Zimasco. To address the plight of the majority of small-scale chrome miners, Government must downsize the claims of these two giant players.

The deputy minister of Mines and Mining Development Engineer Fred Moyo said, “We have since advised these two big players of chrome, Zimasco and Zimalloys to submit their records of what they hold in terms of numbers of the claims. We are working in recognition of the plight of our miners.”