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GOVERNMENT this week lifted the ban on chrome ore exports in an effort to ensure the viability of miners, create jobs and improve revenue inflows to Treasury.
The ban was imposed in 2011 to encourage the beneficiation of the mineral. However, despite the noble initiative behind the move, it negatively affected most small-scale and artisanal miners, who lost their economic ventures and livelihoods.
The industry used to employ more than 2 000 people directly and many more jobs in downstream industries such as transport and smelting. The ban resulted in no meaningful smelting capacity being created while the existing smelters were left exposed to internal and external operating challenges, leaving them incapacitated to expand.
In addition the ban constrained opportunities for smelters to invest in new technology for expanded value-addition and beneficiation. This week’s review of the ban will enable chrome ore producers to mobilise financial resources to invest in modern smelting technology and enhance viability. The decision will allow for the export of up to 30 million tonnes of chrome ore (lumpy, fines and concentrates) over and above the export of processed ferrochrome.
However, we are of the view that while we consider the viability of companies in the chrome sub-sector critical, Government should not lose sight of the need for beneficiation.
Beneficiation and value-addition should remain a priority. The lifting of the ban should only be an interim measure. In the meantime companies should be encouraged to increase mining output and thereafter, begin investing in smelters with latest technology for beneficiation.
As the companies realise export receipts, we encourage them to re-invest in latest chrome mining equipment and latest smelting plants so as to ensure competitiveness. We are aware of the nature and quantum of investment required, but miners can come together and set up a plant, which can be utilised by small-scale miners.
The goal should be to ultimately achieve full beneficiation of our natural resources to derive full benefits.
With an estimated one billion chrome ore reserves, mining companies should not be under the illusion that Government will forever allow the exportation of raw chrome.
In taking the decision to lift the ban, Government took into account the available chrome ore production capacity, limited smelting capacity, transportation idle capacity at National Railways of Zimbabwe to ports and the capacity of the road transport system.
Production capacity, which exceeds the processing capacity, means huge stocks of chrome ore in warehouses yet allowing exports would also help increase business volumes for distressed companies such as NRZ and other road transport operators.
However, we are also mindful of the fact that mines have to survive, jobs must be created and Government should derive revenue from such activities.
This is why we applaud Government for seeking a balance between survival of mines through exports and beneficiation of minerals. That balance is critical to ensure that we do not continue losing more jobs at a time formal employment is diminishing while also not giving up on deriving more value from our minerals.
The lifting of the ban on chrome exports will allow companies to clear stockpiles they had accumulated since the ban was imposed in 2011. For the sake of ensuring viability and survival of mining companies Government has made the right decision by allowing them to export. The companies should obtain some value on the stockpiles.
Online Reporter