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Oliver Kazunga Acting Business Editor
MINES and Mining Development Minister Walter Chidhakwa will soon investigate whether the tender to invite bids for scrap metal exports that the Minerals Marketing Corporation of Zimbabwe (MMCZ) has issued is in line with the regulatory framework.Government banned scrap metal exports in August 2004 through a Statutory Instrument to allow value addition in the steel manufacturing sector.
However, in September last year, the MMCZ flighted a tender that closed on October 4 inviting bids from companies to buy an estimated 32,700 tonnes of graded and ungraded scrap metal arising from railway operations.
“I will have to first find out whether the exports fall under my ministry or the Ministry of Industry and Commerce. I will also have to find out whether the tender is consistent with the regulatory framework,” said Chidhakwa in an interview yesterday.
Contacted for comment Industry and Commerce Minister Mike Bimha said: “I cannot answer for that because I am not the one who made that Statutory Instrument, so I wouldn’t know.”
Following flighting of the tender, local players in the steel industry have expressed concern over the conditions of the tender arguing that it indicated that MMCZ was targeting foreign firms despite government not having lifted the ban on scrap metal exports.
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.
According to the tender, the National Railways of Zimbabwe scrap metal from wagons, locomotives, tank barrels, and rail and steel sleepers, among others was available in different parts of the country.
Industrialists have argued that if scrap metal exports were to be allowed that would further reduce capacity utilisation by the local steel manufacturers and foundries that use scrap metal as foreigners will mop up the raw material.
The country’s industrial body, the Confederation of Zimbabwe Industries is on record saying lifting of the ban on scrap metal exports would starve industry of a critical raw material that was cheaper than iron which has to be mined and processed.
The defunct Zisco now New ZimSteel used to provide scrap metal to a number of local foundries. Efforts to revive operations at New ZimSteel are in progress.
In 2011, the government signed a $750 million deal with Essar Global to revive operations at the country’s largest steel producer.
Online Reporter