Chronicle Editor
Gibson Mhaka, Senior Features Reporter
AS the coronavirus continues its unrelenting impact on the world economy, Zimbabwe’s chrome sector which is undoubtedly the country’s second largest employer after gold in the small-scale mining sector, is faced with a bleak future after its export markets significantly reduced production due to the deadly global pandemic.
Although, the mining industry was given a reprieve at the start of the Covid-19 induced national lockdown to continue operating upon meeting some required conditions, the chrome sector which had been experiencing operational challenges way before the deadly global pandemic struck, is seeing its fortunes taking a nosedive after its stainless steel making markets in Europe and Asia decreased operations.
Like much of Europe and Asia, China which dominates the global market for ferrochrome, which is the main ingredient in stainless steel production suspended many steel mills due to the Covid-19 pandemic.
In Europe, many large stainless steel producers such as ArcelorMittal, Europe’s largest steelmaker, have also halted production indefinitely.
The suspension adversely impacted Zimasco, the country’s biggest ferrochrome producer, after it too also suspended operations at the beginning of March after the pandemic took its toll across the globe resulting in reduced demand for the product.
Indications are that the decline of operations by international markets does not only place hundreds of local small-scale chrome miners’ jobs at risk but also prevents the sector from sustainable growth.
Depressed global markets came at a bad time for Zimbabwe when chrome miners were already struggling as a result of lack of machinery and access to international buyers which led to the depression of local prices.
Other problems bedeviling the sector include low productivity, under-capitalisation, lack of technical and management skills, lack of transparency, unfavourable prices of chrome both on the local and international markets and small-scale chrome miners some of whose activities are unregulated and contribute to environmental degradation.
It is important to note that chrome, which can also capacitate the country’s resurgence in the global chromium market and value chain is one of the potential major Gross Domestic Product (GDP) contributors if it is fully explored as Zimbabwe has the second largest chrome resource base in the world after South Africa. Statistics obtained from the Mining Zimbabwe Magazine, Issue 12 (December 2019), show that just before the Covid-19 pandemic, the country’s chrome sector’s output had already declined with capacity utilisation going down from 80 percent in 2018 to 70 percent in 2019.
According to mining experts, the decline in chrome sales in European and Asian markets due to the Covid-19 pandemic, however, worsened the already troubled sector in the country.
In his Workers’ Day message early last month, Zimbabwe Diamond and Allied Minerals Workers Union secretary general, Mr Justice Chinhema said chrome mining faces bleak prospects in the country in the face of the coronavirus.
“In our mining industry, the impact of the Covid-19 pandemic will be devastating in the small-scale mining ventures especially those in the chrome mining and other big names who were already struggling to operate before this health disaster struck us,” Mr Chinhema said.
A small-scale chrome miner, Mr Tinashe Mapiye said the Covid-19 pandemic had adversely affected most chrome mines in the country. He warned that the sector was teetering on the brink of collapse as most miners especially those in the small-scale sector were going to scale down operations.
“At the moment, chrome ore and ferrochrome prices are at relatively low levels and it’s difficult to see how chrome ore producers can be viable in the face of the coronavirus which has also caused some of the biggest ferrochrome producers and international markets to suspend operations.
“There is no doubt that most players, if the Covid-19 pandemic persists, may fold in the ferrochrome industry,” said Mr Mapiye.
University of Zimbabwe chairperson of the Institute of Mining Research Mr Lyman Mlambo said the country’s chrome sector’s output performance was in deep trouble after the Covid-19 pandemic slowed down the world economy, including the construction and industrial sectors where much of the chrome is used.
“Covid-19 has slowed down the world economy, including the construction and industrial sectors where much of the chrome is used as efforts have been directed towards fighting the pandemic. At the moment demand remains very low. As a result, several major operators and small-scale miners in Zimbabwe have scaled down their operations while some have closed down.
“While efforts are being made to take living-with-Covid-19 as the new normal around the world, this normal implies subdued production for an indefinite period, we do not know how long this pandemic will be with us. The longer it will take the more difficult it will be for miners, especially large-scale operators to reopen after long periods of dormancy.
“After Covid-19, the construction and industrial sectors which use stainless steel and super alloys made from chromium (with known substitutes) are likely to pick up but Zimbabwe could miss out on this prospective demand resurgence if some of the problems bedeviling the sector are not addressed to facilitate chrome mine re-opening and or enhancement of their productive capacities,” warned Mr Mlambo.
He said the local pricing of raw chrome by the Minerals and Marketing Corporation of Zimbabwe (MMCZ) was also a sticking point in the development of the sector.
“Artisanal and small-scale miners, who contributed significantly to production of chrome, have also not enjoyed as much support from institutions like Reserve Bank of Zimbabwe (RBZ) as their counterparts in the gold sector who have been supported technically and financially by the Fidelity Printers and Refiners (a subsidiary of the RBZ),” said Mr Mlambo.
In their proposed chrome policy document, Zimbabwe Miners Federation (ZMF) Chrome Representative Mr Masango Mahlahla conceded that chrome ore producers were facing major growth challenges as there is a limited access to international export markets which reduces the opportunities for chrome producers to earn much needed foreign currency to help resuscitate operations.
He urged the Government to identify the mineral as strategic and strive to ensure the sustainable development of the chrome industry in order to harness its full potential in contributing to the development of the national economy.
ZMF vice president – Women’s Affairs, Ms Lindi Mpofu is on record passionately calling on government to support small-scale miners as part of the expansion of its chrome industry whose low production is attributed to lack of machinery.
Online Reporter