Zimasco cedes chrome claims to Govt

Source: Zimasco cedes chrome claims to Govt | The Herald

Tinashe Makichi Business Reporter
Zimbabwe’s largest ferrochrome producer, Zimasco has ceded 50 percent of its chrome claims to Government to enable new investors to explore the chrome mining sector, a senior company official said.

The move is in line with a directive that was issued by Government last year to Zimasco and ZimAlloys to cede some of their chrome claims.

Zimasco had 45 900 hectares and following the Government’s directive, it ceded 22 700 hectares.

Government had argued that the two ferrochrome producers owned about 80 percent of all chrome mining claims and they should release some ground to cater for new investors.

An official at Zimasco told The Herald Business that the Ministry of Mines and Mining Development has written to the company expressing their satisfaction with the size of land ceded by the ferrochrome giant.

“With regards to the Government directive, we complied by ceding 22 700 hectares and they officially accepted what we did as a company,” confirmed Zimasco general manager (Administration) Clara Sadomba.

She said the company had been in discussion with Government and they finally reached an agreement.

Zimbabwe holds the world’s second largest deposits of chrome, which is smelted to produce ferrochrome, a raw material used in the making of stainless steel.

When he issued the directive last year, Mines and Mining Development Minister Walter Chidhakwa said that after ceding some of their claims, Zimasco and ZimAlloys will still be left with enough mining claims that would meet their production targets.

In 2014, Zimbabwe produced 260 000 tonnes of high-carbon ferrochrome, which was 2,3 percent of global output.

Zimasco produced 68 percent of Zimbabwe’s ferrochrome in 2014.

In June last year, Government temporarily lifted a ban on raw chrome exports that was introduced four years ago and scrapped a 20 percent export tax on the metal, as it aimed to boost earnings from the struggling sector.

Government had directed that it was not going to issue Zimasco and ZimAlloys with licences to export raw chrome until discussions on ceding some of the mining concessions held by the two companies are concluded.

The ceding of claims is part of Government’s use-it-or-lose-it policy which seeks to ensure that mining claims are fully utilised and not used for speculative purposes.

Government in 2006 directed Zimbabwe’s biggest platinum producer, Zimplats to release ground with 36 million ounces worth of resource, the two ferrochrome producers have also been asked to do the same.

Last year, Government also set up a special purpose vehicle which small-scale miners have been using to export chrome ore or concentrate in bid to accelerate the exportation of the mineral following the removal of an export embargo.

Chrome ore exports were banned in 2011 to promote value addition and the purpose of regularising the export of chrome ore this time, smelters and small-scale miners are expected to adhere to registration of chrome smelters to export excess chrome ore. Small-scale miners have been exporting their chrome ore or concentrate through a special purpose vehicle, Apple Bridge Investments but the ore delivered has been low.