HomeBusiness DigestGovt pressures chrome giants over deposits

Govt pressures chrome giants over deposits

Government has denied the country’s two largest ferrochrome producers — Zimbabwe Alloys (ZimAlloys) and Zimbabwe Mining and Smelting Company (Zimasco) — permission to export raw chrome as part of its measures to force the two players to cede part of their chrome deposits for allocation to new investors, businessdigest has learnt.

Taurai Mangudhla

A well-placed source in the Mines ministry said ZimAlloys and Zimasco are some of the four companies that were in October denied authority to export raw chrome ore out of a total of nine applications — a deliberate ploy to force them into ceding chrome claims to government.

chrome

Mines minister Walter Chidhakwa in June this year temporarily lifted a ban on the export of raw chrome, effected four years ago, to improve revenue inflows and allow players to invest in new technology.

According to a source, who requested anonymity, the Mines ministry would maintain its position until the two miners give in.
The move comes after the two ferrochrome producers, believed to own 80% of all chrome mining claims in the country, refused to play ball.

“There were nine applications of companies wanting to export excess raw chrome and the ministry approved five. The other two didn’t meet the criteria, but to these two, it’s about releasing some ground and they have to do it,” said a government source.

“For everyone else we are saying if you can smelt 10 000 tonnes of ore per month for instance, and you have more than that, let’s say even if you do 8 000, we can allow you to export.”

Mines minister Walter Chidhakwa last month told delegates at the mining indaba that Zimasco and ZimAlloys must surrender some of their claims to government for allocation to other investors. ZimAlloys and Zimasco hold 80% of Zimbabwe’s chrome rights.

A senior official with one of the two companies in question confirmed applications had been sent to the Mines ministry, but could not be drawn to specify the outcome, saying he had been out of office for the past few weeks.

He, however, said ZimAlloys and Zimasco were concerned as government is yet to determine the size of claims it requires for allocation to new players.

“What I can say is that we are not yet sure of the size of claims government wants, and this is the biggest factor in terms of the impact or likely impact of giving up some of the claims to government,” said an official in the Mines ministry.

“What we can only hope for is that whatever the outcome, the process should leave us able to operate viably.”

Zimbabwe holds the world’s second largest deposits of chrome, which is manufactured to produce ferrochrome, a raw material used in the making of stainless steel.

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