THE Minerals Marketing Corporation of Zimbabwe (MMCZ) is considering a raft of measures to improve payments to particularly small-scale chrome producers, including making upfront payments for the mineral, to stimulate production and ensure viability of the sector, businessdigest reports.
Currently, small-scale chrome miners are selling their produce to cartels at heavily discounted prices.
“When small-scale miners are in the bush, they sell their produce at even below half the standard price because they just want quick money,” MMCZ general manager Tongai Muzenda told businessdigest this week.
“We do have some ideas, but currently we have to conclude the Chrome Policy which is being drafted. One of the ideas is to secure funding or sponsorship so that we pay producers half their money on delivery then the balance is paid when the chrome is sold. This depends on grades and everything,” Muzenda said.
“For example we might say, your chrome can get you US$460 (per tonne) so we pay US$30 (per tonne) and stockpile then the balance is paid when we sell,” Muzenda added.
Under the current set up, small-scale chrome miners have to wait for buyers to collect their stockpiles after which they are paid.
Last year, the Zimbabwe Miners Federation said small-scale miners were losing about US$70 in potential revenue per tonne to cartels, who are cashing in on huge disparities between domestic and exports prices.
Predatory buying, it emerged, is rampant on the mineral-rich Great Dyke belt, where the cartels are taking advantage of cash shortages and infrastructure constraints besetting the economy to buy chrome for a song from small-scale producers.
“Two weeks ago we reengaged small-scale miners in Karoi, Gweru and Zvishavane. We were encouraging them to come forward and get expert assistance and information so that they are not taken advantage of. It also helps us come up with solutions that are informed,” Muzenda said.
Zimbabwe accounts for 12% of the world’s chrome reserves, only second to South Africa. Official statistics suggest only 5% of chrome reserves have been exploited.
Last month, an official with the Norton Miners Association warned that while Zimbabwe had set an ambition to transform its mining industry into a US$12 billion sector by 2023, the vision might be hard to achieve unless the challenges confronting chrome miners are addressed.
There are a plethora of challenges facing the chrome mining subsector, chairperson of the association Privilege Moyo said.
He said the challenges included lack of government support, predatory buying and low prices.
In addition, the sector did not have a value addition and beneficiation policy.
Chrome miners have also been affected by lack of weighbridges, mining equipment and under-capitalisation.
These challenges have dampened the spirits of many miners and some of them have shifted to gold and gemstones mining.
“Government needs to put a taskforce together to only focus on the mining of chrome.
“Its focus will be on production, pricing and marketing.
“I am aware of the existence of the Minerals Marketing Corporation of Zimbabwe (MMCZ), but I am sure they need to rise to the occasion,” Moyo said.
He said pricing was a huge challenge.
Chrome miners were at the mercy of buyers and smelters, and were calling for constant updates on prices to help them plan.
“Knowledge of markets is crucial to miners as it gives them local or foreign options,” he said.
“If these issues are not addressed, the US$12 billion target will remain a pipedream. We need to focus on the ease of doing business in mining because bureaucracy is affecting business. Government needs to commit and grow an industry one at a time. If they want earnings in mining, then more focus must be deployed until it starts bearing results, then move to the next.”