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13 Oct 11 Zimbabwe: Chrome Ore Export Ban Leaves Producers in Debt

Published by the government of Zimbabwe

12 October 2011

THE ban on all chrome ore exports has left producers in debts totalling more than US$9 million, borrowed mostly from banks.

Government banned chrome ore exports in April this year after the companies twice failed to meet deadlines to set up smelting plants in the country as a value addition strategy.

The chrome producers borrowed the money to finance operations.

The financiers are now demanding their money back following the Government ban on the exportation of the mineral.

Minerals Marketing Corporation of Zimbabwe officials on Monday told the Parliamentary Portfolio Committee on Mines and Energy that they had engaged Government to re-consider its position on the affected companies.

MMCZ acting general manager, Mrs Nomsa Moyo said: “The chrome producers owe the companies that pre-financed their operations about 12 000 tonnes of chrome valued at US$9 538 285.

“We have since written to the Ministry of Mines showing them which producers had their operations pre-financed and we requested if the ministry could allow the companies to export what was required but they (ministry) told us that they were not ready to open exports.

“The customers are actually up in arms with the producers demanding that they be re-imbursed. We are currently consulting the producers to see which alternatives they can pursue to raise the money.”

Mrs Moyo added that the imposition of illegal sanctions on MMCZ was making it difficult for the corporation to operate.

MMCZ, she said, could not export directly to the United States therefore forcing the corporation to allow Zimasco to export the chrome on its own in order to evade the sanctions.

Mrs Moyo also said the country would benefit more from beneficiation of chrome ore than exporting the mineral in raw form.

“There wasn’t much impact from the ban because as far as employment is concerned, the producers have been employing people at a minimal scale and mostly temporary.

“Everybody else is moving towards beneficiation of their minerals and it is important that beneficiation is encouraged.”

MMCZ deputy general manager (marketing) Mrs Otilia Furusa said middlemen who buy from actual producers for a song and sell at higher prices manipulated the actual miners.

“These middlemen from South Africa will come and buy chrome ore at between US$40 to US$50 and they would then export the chrome for about US$140 (per tonne).

“It is also important to note that if the ore is processed here, the nation will benefit from employment creation and industrial machinery that will come in,” she said.

The MMCZ officials said they were having challenges reining in Chinese firms that are leasing chrome claims from local claim owners. They said most of the Chinese firms, which extract chrome throughout the country, were causing environmental degradation which was difficult for the Environmental Management Agency to follow up.

Mrs Furusa said the country had exported over 300 000 tonnes of chrome ore since 2008 up to April 2010. From the total exports, the country got over US$52 million with about US$1 250 000 going to royalties and levies.

Mrs Furusa said that about five more smelting companies had been set up since the initial lift of the ban on chrome ore exports in 2008.

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