‘Chrome target unattainable’

FAILURE to leverage on abundant local chrome deposits, especially along the mineral-rich Great Dyke, is likely to peg back Government’s target to generate US$3 billion from the sector this year, small-scale miners said last week.

Instead they are proposing to be allocated additional claim reserves that are presently monopolised by Zim Alloys and Zimasco.

Most small-scale chrome miners have tributary agreements with the two big mining companies.

Under such agreements, they get revenues for mining ore on behalf of the big miners.

Statistics from Treasury’s quarterly review released last week indicated that first-quarter chrome exports at 316 625 tonnes were 18 percent less than the forecast 375 000 tonnes.

Confederation of Chrome Miners Association chairman Mr Isaac Chivendera told The Sunday Mail Business that challenges in accessing capital and machinery will continue to affect output.

He also noted that the current claims were not enough to support the targeted production figures.

“There is no way we are going to meet targets under the current circumstances,” said Mr Chivendera.

“The situation we have demands more or less the same with what happened in the agriculture sector, where Government engaged farmers on their needs and brought about Command Agriculture that has yielded impressive results.

“We complain every day that we don’t have adequate claims, yet companies like Zimasco and ZimAlloys have plenty of them which they are not using.

“Why can’t these be handed to people who are working on the ground so that we can up production and earn the country the much needed foreign currency,” queried Chivendera.

Mines and Mining Development Minister Mr Walter Chidhakwa last year set a US$300 million export target for chrome miners, but by December only US$146 million had been realised.

However, of the US$146 million, US$31 million was generated through raw chrome exports, while high-carbon ferrochrome accounted for the larger chunk of $115 million, thus, emboldening Government’s push for beneficiation.

Despite less than impressive production, revenues have been healthy.

In February this year, accruals from chrome were US$42 million, up US$10 million for the same period a year earlier.

But of late prices have been trekking southwards to US$90 per tonne from US$200 a tonne a quarter earlier on increased supply on the international market.

Growing resource nationalism is forcing most governments on the continent to consider restricting exporting ore and concentrates. Beneficiation has its own challenges. In 2011, one of the world’s biggest ferrochrome producer, Merafe-Xstrata partnership, noted that with high electricity tariffs, beneficiation was less economically viable and rather opted to export ore in countries like China where demand is very high.

Locally, lobby groups are ratcheting up pressure for tariffs as low as US4c per kilowatt hour from the current US67c in order to cushion producers.