High quality ferrochrome processed from Chinese and Indian plants affected competitiveness of the Zimbabwean chrome industry forcing government to lift the ban on exportation of chrome ore, the ministry of Mines and Mining Development has said.
BY VENERANDA LANGA
Last week, government lifted the ban on the export of chrome ore of up to 30 million tonnes saying the embargo had negatively affected small scale chrome ore producers.
Quizzed in Parliament on Wednesday on why government had lifted the ban, Fred Moyo, Mines and Mining Development deputy minister, said there were “external issues that have affected us leading to the decision of reviewing our initial position of not trading unprocessed chrome ore”.
“The two biggest producers of chrome ore are South Africa and Indonesia, and the two countries have continued to trade chrome ore into India and China which are the biggest processors of chrome ore into ferroalloy,” Moyo said.
“The Chinese and Indians have the most efficient plants to process chrome ore and we cannot compete with them, and as a result South Africa and Indonesia fill up the plants in China and India resulting in a more competitive product than our own product.”
Moyo was responding to a question by Bikita West MP Munyaradzi Kereke.
Moyo said as a result there had been a lot of pressure on Zimbabwe’s plants to compete or place their chrome products on the international market.
He said plants in South Africa and Indonesia were competitive in that they were bigger, enjoy cheap labour and “their electricity or infrastructural charges or costs are much cheaper than ours”.
Moyo said a high number of the country’s chrome processing plants had shut down due to viability problems, and currently four out of the 12 old plants were effectively working.
“The consequence of that is all our small chrome ore producers have basically shut down. Some had borrowed money from banks, while others had been forced to sell their product at prices as low as $40 per tonne against international prices of $80, $90 and $100 per tonne.”
He said re-opening of exportation of raw chrome would save the sector where small chrome producers had now shut down.