Zim’s reputation on global chrome market at risk

Source: Zim’s reputation on global chrome market at risk | The Herald

Business Reporter
There are fears that Zimbabwe’s reputation on the global chrome market could be at risk amid revelations that some miners failed to deliver about 100 000 tonnes of the mineral pre-financed by external buyers prior to the ban on ore exports in 2011.

The buyers, mainly from China were financing chrome production and before they had taken delivery of the product, Government imposed a ban of chrome ore exports in April 2011.

According to the Minerals and Marketing Corporation of Zimbabwe, a Government institution charged with overseeing the exports of all minerals except for gold and silver, some external buyers had financed production of 105 000 tonnes valued at $11 million. The ban, which was lifted in June 2015 had been imposed to encourage local producers to set up smelters as the country sought to increase export revenue from the mineral.

“The failure by producers to deliver outstanding quantities need to be regularised to avoid negative perception on the sector and consequently the reputation of the country,” said MMCZ.

“At the end of the day, the customers are going to say it’s risky. These people have already lost $11 million. So it’s like adding on to the perceptions out there that it’s a risky to do business with Zimbabwe. We need to understand such action may end up tarnishing the image of the country as a reliable supplier of chrome.”

The MMCZ said it had already engaged the producers but some have since closed operations. “However, the MMCZ will not take on the responsibility to compensate the international buyers since the pre-financing arrangement was bilateral between producers and the buyers. This was therefore a private arrangement.”

While miners produced about 317 000 tonnes of chrome during the first quarter of 2017, slightly lower than the annual projection of 375 000, production is likely to slow after ore price spike that started in November 2016 came to an abrupt end in March 2017.

The chrome ore market peaked at price of around $390 per tonne achieved at the end of December 2016 against current trading levels of $135 per tonnes, a 65 percent decline in 5 months.

Zimbabwe holds the world second largest chrome producers after South Africa.