Zimbabwe: Chinese Buyers Exploiting Chrome Miners


SMALL scale chrome miners are singing the blues because buyers from China who are now dominating the market are driving a hard bargain.

The Chinese buyers are buying a tonne of chrome for as little US$10.

Last year, prices of chrome ranged between US$30 and US$40 per tonne.

Following the closure of the Zimbabwe Iron and Smelting Company (ZIMASCO) in December last year, the Chinese are now calling the shots in the market.

With no other major buyers in sight, the Chinese buyers are dictating the price -- forcing sellers to part with their product at giveaway prices.

Interestingly, after driving prices to current levels, the Chinese buyers have strategically retreated to the sidelines in order to create an oversupply of the product, which will in turn push prices further downhill.

Industry players say it costs about US$55 to extract a tonne of chrome and delivering it to the buyer.

Small scale chrome miners are, therefore, crying foul and have no kind words for the Chinese buyers whom they are accusing of impoverishing them.

Miners have been accusing buyers from the Far East of manipulating chrome tonnages to their detriment.

Zimbabwe Miners Federation spokesperson, Dosman Mangisi, confirmed last week that Chinese buyers had forced prices to go below cost recovery levels.

"The Chinese have monopoly over buying of chrome so we are trying by all means to arrest the situation. We had a meeting that sought to come up with ways of cushioning our miners," Mangisi told the Financial Gazette a fortnight ago.

He said the federation was working with government to save the interests of chrome miners while at the same time inviting other buyers to enter the market and hopefully offer better prices.

Mangisi said a Special Purpose Vehicle has since been created by government to connect miners to buyers, although there is disquiet among small scale players over its effectiveness.

"We are casting our net wider, engaging other buyers. And we are also saying that those miners who think they have the capacity to value add, let them come on board," he said.

Minrod Mashaya, a chrome miner in Shurugwi, said mining was no longer viable.

"These Chinese change the tonnage to suit themselves and pay us meagre sums for our hard work. The costs related to the extraction and delivery (of chrome) far outweigh the money we get," he said.

"There is speculation that the prices are going to be reduced further and this is not a good way to begin the year. Government should act fast."

Lovemore Magura, a chrome miner in Mashava, said the plight of miners was getting desperate.

Magura is one of the small scale chrome miners who are considering quitting the business owing to poor prices.

It appears that it never rains but pours for chrome miners.

Last year, chrome miners breathed a sigh of relief when government lifted a ban on raw chrome exports.

That joy was short lived when ZIMASCO's furnaces went silent late last year.

Even when ZIMASCO was still operational there were still complaints over the exploitation of chrome miners by foreign buyers who are dictating prices and paying late, while charging a raft of other taxes.

"It is like jumping from a frying pan onto the fire," remarked Isaac Chivendera, the district chairperson of Shurugwi small scale miners.

Buyers argue that the issue of prices is beyond their control.

They cite the falling international prices of metals, including chrome, as having contributed to the misery facing all chrome miners.

Even some of the Chinese companies that were in the business of extracting chrome have also suspended production owing to ebbing international prices.


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