‘Zim loses US$1,5m/yr to scrap metal smuggling’

The sector had the capacity to contribute meaningfully to the fiscus if all the scrap metal was accounted for.
THE Zimbabwe Institute of Foundries (ZIF) estimates that the country might earn roughly US$7,5 million if there is value-addition to the 5 000 tonnes of scrap metal that are being smuggled out of the country annually.

“An average of 5 000 tonnes is being smuggled per annum and this means the country is losing an estimated US$1,5 million per annum because there is no accountability when it comes to smuggling,” ZIF spokesperson Dosman Mangisi told NewsDay Business last week.

“The other issue is the smuggling of scrap metal has contributed to an increase in vandalism of the country’s infrastructure and also smuggling of precious metals because you cannot detect them when smuggling and this means we lose more than what we gain.”

Steel manufacturers which depend on scrap metal as a raw material used to flourish in the country, but during the past 10 years, hundreds of businesses nationwide have closed due to rising energy costs and water scarcity, among many other challenges.

Mangisi said the country needed to act and stop scrap metal smuggling, while promoting value-addition in the sector.

He said the sector had the capacity to contribute meaningfully to the fiscus if all the scrap metal was accounted for.

“What we need to do is to promote value-addition within the sector and if we value-add to the 5 000 tonnes which is being smuggled, we get approximately US$7,5 million,” he said.

Major steel companies are investing in the decarbonisation of scrap mills in response to climate change. Experts predict that by 2030, there will be 8,2 billion people on the planet, which will increase garbage creation and offer significant opportunities for recycling, which will lower carbon emissions.

The country’s sole steelmaker, State-run ZiscoSteel, shut down in 2008, partly because of poor management and lack of finance for retooling its aging plant, among other things.

Since that time, Zimbabwe, which was once a significant producer of steel and iron goods in southern Africa, has spent billions of dollars on imports. The import bill keeps rising since steel and iron goods are crucial to the sustenance of other sectors.

According to the most recent statistics from the Zimbabwe National Statistical Agency, a number of public and private infrastructure programmes helped to increase imports of steel and iron in 2021, from US$306 million to about US$410 million. According to research, the demand for premium steel and iron goods has also increased.

High demand for steel has triggered growth in the number of businesses engaged in the lucrative steel recycling industry.-newsday