Minister to meet MMCZ over scrap metal exports

Oliver Kazunga Business Reporter
Mines and Mining Development Minister Walter Chidhakwa will soon meet the Minerals Marketing Corporation of Zimbabwe (MMCZ) to get clarification on its intention to allow the resumption of scrap metal exports. Government banned scrap metal exports in August 2004 through a Statutory Instrument to allow value addition in the steel manufacturing sector.

Last month, MMCZ flighted a tender that closed on 4 October inviting bids from companies to buy an estimated 32 700 tonnes of graded and ungraded scrap metal arising from railway operations.

According to the tender, the National Railways of Zimbabwe (NRZ) scrap metal from wagons, locomotives, tank barrels, and rail and steel sleepers, among others was available in different parts of the country.

In the tender document for the sale of scrap, MMCZ said winning bidders were supposed to pay for export scrap materials using off-shore funds.

Local players in the steel industry have said conditions of the tender indicate that MMCZ was targeting foreign firms despite Government not having lifted the ban on scrap metal exports.

The industrialists argued that if scrap metal exports were to be allowed that would further reduce capacity utilisation in the local steel manufacturers and foundries that use scrap metal as foreigners will mop up the raw material.

Newly appointed Mines and Mining Development Minister Chidhakwa said he was not aware of the tender.
“I am just two weeks in the ministry. I have not had much time to look at issues concerning scrap metal exports. I have spent my time looking on issues to do with diamonds.

“As you have raised the matter, I will have to soon speak to them (MMCZ) to find out what is it that they are trying to do given the existence of a Statutory Instrument that bars the importation of scrap metal.

“How do they propose to export in the presence of such an instrument; they must tell us why they should be given a special dispensation,” he said in an interview on the sidelines of the Confederation of Zimbabwe Industries (CZI) annual congress in Bulawayo.

CZI has said lifting of the ban on scrap metal exports would starve industry of a vital raw material that was cheaper than iron which has to be mined and processed.

The defunct Zisco now NewZim Steel used to provide scrap metal to a number of local foundries.
Industry and Commerce Minister Mike Bimha told delegates at the congress that work on revival of NewZim Steel will definitely start before the end of the year.

The Government signed a $750 million deal with Essar Global in 2001 to revive operations at the country’s largest steel producer.
However, following disagreements between ministers in the inclusive Government whose term ended on 31 July, the deal is yet to be implemented.