Local Miners Cry Foul as Zimasco Transfers Claims to Chinese Investors
Local chrome miners, who have been operating under agreements with Zimasco since 2008, are protesting after the company backtracked on its commitments, choosing not to renew their contracts and instead transferring the claims to Chinese investors, Mining Zimbabwe can report.
By Ryan Chigoche
Since 2008, the Midlands-based smelting company has subcontracted small-scale miners to extract chrome from its numerous claims. However, Zimasco has recently allowed Chinese miners to take over operations in areas previously worked by local miners.
The abrupt end of agreements with these local miners, who had been subcontracted since 2008, has drawn criticism for the lack of formal communication. The miners allege that they were only informed of the terminations via phone, without any written notice. Zimasco had verbally promised them the opportunity to resume mining by June 2024, but this promise remains unfulfilled.
Zimasco cited power cuts and depressed international chrome prices as reasons for terminating the local miners’ contracts. However, the miners argue that Zimasco’s practices—such as imposing unrealistic production targets and undervaluing their ore—were designed to drive them out of business.
With the export of chrome currently banned, the local miners are sitting on accumulated chrome deposits that they cannot dispose of, as they are unable to sell to Zimasco.
In November 2023, Zimasco shut down small-scale mining operations in several areas, including Mutorashanga, Mhondoro, Lalapanzi, Shurugwi, Mashava, Mberengwa, and Neta. This closure has devastated local miners who had invested significant resources in these sites. They are particularly aggrieved that Chinese miners have taken over these areas and continue to operate.
Chinese miners have long dominated the local chrome industry, controlling both the buying and selling of the metal. Their dominance has allowed them to benefit from the 2022 export ban, despite the significant drop in domestic chrome prices. These miners are also reportedly smuggling chrome to buyers abroad.
Zimbabwe introduced a ban on chrome ore exports in 2022 to boost the domestic mining sector by increasing the capacity of local smelters and maximizing the value of the country’s chrome resources.
However, the ban has worsened the plight of local miners, who continue to be exploited by monopolistic foreign players in the industry. These foreign entities have kept the price of chrome per tonne below US$80, despite ferrochrome prices being strong on the global market, ranging between US$250 and US$350 per tonne.
Currently, the legislation only regulates the export of chrome, with no regulations on domestic dealings. Mining industry research expert Layman Mlambo stated that there is a need for government intervention in terms of policies guiding the chrome sub-sector.
“There is an overarching issue of a policy vacuum at the national minerals development level and within the chrome-specific subsector. Policies should guide legislation and regulations based on clearly articulated objectives that consider the interests of all stakeholders,” Mlambo said.
Zimbabwe holds the second-largest known chrome ore reserves globally, after South Africa. Chrome is a critical industrial commodity, with over 90% of the world’s chrome output used to produce ferrochrome—a blend of chrome and iron ore created through high-temperature smelting. Ferrochrome, with a chrome content ranging from 50% to 70% by weight, is essential for manufacturing stainless steel.
Stainless steel, containing 10% to 30% chrome, is valued for its strength and resistance to corrosion. It is used in a wide range of products, including cutlery, kitchenware, home appliances, medical equipment, construction materials, and components in the automotive and aerospace industries.