MMCZ to set up fund for chrome miners
The Minerals Mining Corporation of Zimbabwe (MMCZ) intends to establish a chrome miners funding facility to assist small scale miners with access to affordable working capital. The initiative is expected to cushion small scale chrome miners from being charged punitive interest rates obtaining in the local market.
Chrome miners have been subjected to exploitative prices by buyers cognisant of the fact that the miners are desperate for funding. Unscrupulous buyers have reportedly been buying chrome at US$12/tonne, instead of the prevailing market price of around US$26/tonne.
MMCZ chief executive Tongai Muzenda said, “Chrome miners are being exploited because they desperately need the money for immediate use. Some want to survive, and almost all need working capital to back into mines.
“We are looking at options to help them out of their problems, and as MMCZ we are considering a chrome mining fund where we help the miners to get working capital and be able to sell at better and favourable terms than currently going on,” Mr Muzenda said. MMCZ intends to become the middleman between banks and small scale miners to secure funding with better and affordable terms.
Government, through the national budget, is also expected to set aside some funds towards supporting the operations of chrome miners.
“We are not going to use our own funds as we do not have any, but if we go through with this, we are going to talk to banks so that they can avail funds on a collateral basis to the fund and as well utilise the mining fund that was talked about by the minister of finance last year,” Mr Muzenda added.
MMCZ implemented a raft of measures to boost deliveries and production. The authority recently established a pricing committee to take a proactive role in addressing market distortions that have pushed or left some small scale miners on the brink of c “The pricing committee is there at the MMCZ, which includes ZMF (Zimbabwe Miners Federation) and mining firms. The new challenge is for them to adjust prices frequently as they rarely meet, and this is no incentive to miners as they want quick payouts.
Without working capital, miners will always go after those who pay quickly. We know of a situation where the prices being offered are very low.
“It is part of the issue we have lobbied for so that the Government looks into it,” he said.
Zimbabwe produced 300 926 tonnes of chrome during the first quarter of this year, compared to 353 669 tonnes during the same period in 2020.
Producers say falling output is partly due to poor pricing by mostly Chinese buyers, who have recently set up smelting facilities in Zimbabwe.
Chrome is one of key minerals expected by the government to underpin its target to build a US$12 billion mining industry by revenue in the next two years, from about US$3 billion currently.
Zimbabwe accounts for 12 percent of the world’s chrome reserves, only second to South Africa. Official statistics suggest only 5 percent of chrome reserves have been exploited.-The Herald
