Ferrochrome, chrome ore drive earnings
Exports likely to reach $1,6 billion this year
Zimbabwe’s mineral exports will surpass the 2017 target with earnings from major commodities likely to reach $1,5 billion, largely driven by an increase in high carbon ferrochrome and chrome ore sales, the Minerals and Marketing Corporation of Zimbabwe said.
In 2016, the country earned $1,2 billion from minerals exports–excluding gold and silver.
MMCZ is an agent of Government responsible for marketing all minerals excluding gold and silver which are marketed by Fidelity Printers and Refiners, a unit of the Reserve Bank.
“We had a target of generating $1,4 billion last year but we surpassed that in November. We are doing the final audit and we are looking at about $1,5 billion this year,” MMCZ general manager Masimba Chandavengerwa told Business Weekly in an interview.
“We witnessed a significant growth in smelted ferrochrome and chrome ore and that is where that is where the largest contribution came from and obviously much higher in 2018.”
Zimbabwe lifted a four-year ban on raw chrome exports in 2015 to boost export earnings. The ban had been put in place to force companies to beneficiate the mineral.
In 2016, mining sector contributed 62 percent to the country’s exports from 55 percent in 2015. This year, the mining sector is expected to grow by 5,1 percent, underpinned by a strong performance in major minerals also including gold, nickel and platinum.
Mr Chandavengerwa said mineral exports for this year were likely to hit $1,6 billion, saying the country was looking at selling more diamonds following the consolidation of the industry.
The country earned $293 million and $84,4 million from high carbon ferrochrome and chrome ore. Export revenue from platinum stood at $851 million, diamond, $65 million, nickel, $36 million, coke $15,6 million, granite $32 million and $2 million from coal.
A modest recovery in international commodity prices is projected to spur growth in mining this years, the African Development Bank said its 2018 economic outlook on Zimbabwe.
Zimbabwe has already repealed empowerment regulations, which prohibited majority ownership of mines by foreigners for all minerals except for platinum and diamond.
But President Mnangagwa has already hinted that his administration may also scrap the requirement for diamond and platinum to help the country attract investment.
“I only excluded diamonds and platinum for now. We do not have a real or deep-rooted or well-interrogated policy on diamonds or platinum,” the president told Bloomberg in an interview. “Down the line when we are satisfied that this can also go into the open basket we will do so.” Mining analysts say the new administration should quickly “review” the laws to attract the much needed foreign direct investment.
“Mining, particularly of platinum requires and lot of money, which needs to be raised from outside,” mining consultant Donald Chiriza said. “It is refreshing that the new administration has freed most minerals from the indigenisation laws but this will not be enough if platinum and diamonds still remain affected by the regulations.”
Zimbabwe’s mining lobby group Chamber of Mines said the country required an investment of $400 million this year with platinum sector needing just above half of the amount. The gold sector needs $110 million, coal $70 million and $20 million chrome.