THE Government is restructuring the chrome mining sector to enable small-scale miners to drive the exploitation of the mineral, a Cabinet Minister said.
Following gold, chrome miners are the second largest employers in the small scale mining sector.
Mines and Mining Development Minister Walter Chidhakwa said the Government would forge ahead with the restructuring of the chrome sector after big corporates, Zim-Alloys and Zimasco agreed to cede 50 percent of their claims to the State.
“We are restructuring the chrome sector so that it is driven by small scale miners. Government negotiated for the release of mining claims by traditional big mining companies in order to have more players in the chrome sector,” he said.
“Zimasco has already released 50 percent of their claims. I need you to know that Zim-Alloys have already released to us approximately 43 percent of claims but we still have to do some groundwork and they are now working with our geologists to ensure that the remainder is released to the Government.”
The recent boom in chrome prices on the international market has seen a scramble for chrome ore claims across the globe. Latest reports indicate that ferrochrome prices for the first half of 2017 are providing ongoing momentum for the ferrochrome business, which is poised to benefit from the growing production of stainless steel.
Zimbabwe has also seen a rush for chrome claims, mainly in the Midlands province where small scale producers claimed they are being sidelined in the allocation of claims.
Minister Chidhakwa said the empowerment of small scale chrome producers was good for the economy.
“The future of chrome mining in Zimbabwe lies in setting up of smaller smelting facilities that are able to leverage on reduced power costs.
“I am told 40 percent of the cost of producing a tonne of ferrochrome is actually power, it is actually a big power guzzler, and so we need to manage that,” he said.
The Government has pledged to push for the reduction of power tariffs applicable to the chrome sub-sector to at least four cents per kilowatt hour to attract increased investment in chrome ore smelters.
In June 2015, the Government lifted the ban on chrome ore exports in order to improve liquidity in the sub-sector with the objective of promoting and facilitating sustainable long-term smelting capacity in Zimbabwe.
Zimbabwe is anticipating to double chrome ore production this year to 550 000 tonnes from 284 943 tonnes last year. Ferrochrome (refined chrome ore) production is also expected to increase to 300 000 tonnes, up from 149 000 tonnes. Last year, Zimbabwe realised $115 million from the export of 149 000 tonnes of ferrochrome while $31 million was earned from the export of 284 943 tonnes of raw chrome.
Most of the chrome mining is along the 550km long Great Dyke. Minister Chidhakwa told mining delegates in Bulawayo last week that chrome exists as narrow seams and as such small-scale miners were able to mine it using basic tools.
He said it was for this reason that large scale mines had contracted small-scale miners to mine on their claims and sell the chrome to them.
In recognition of the increasing contribution of small scale miners in the economy, last Thursday the Government launched a $50 million loan package to capacitate small scale gold producers with mining equipment, which will be manufactured by local companies.