- April 2, 2019
- Posted in NEWS
Local chrome miners have castigated the dominance by predatory buyers who have formed domestic cartels which purchase chrome at an average price valued at 15% of export sales prices, thus they proposed measures necessary to prevent predatory buying of chrome by these unscrupulous individuals and organizations.
Rudairo Dickson Mapuranga
According to chrome producers draft policy, the government need to enforce world market trading based pricing both for export and domestic pricing and publish the prices daily as this will disrupt the predatory buying which is taking place inhibited on the domestic market.
Chrome miners believe that, monitoring prices, if established will counter predatory pricing for exports and a basing calculation if it’s created will prevent contracts with pricing being below market trading rates, thus the lowest acceptable contract export price would be viable for the miner.
The chrome producers draft policy also pointed out that, in order to promote both chrome mining production as well as beneficiation via smelters, the Domestic base price should be calculated also as per international standards as follows:
(CIF China – Discounted 25%) subtract (Cost per Km per tonne @ 0.25) subtract (Logistic & Loading $6)
For example CIF China $220; distance 100km to smelter: ($220 * 0.75) = $165; $165 – (0.25 * 100) – ($6) = $134 ,USD price paid to chrome producers domestically. This will enable chrome producers to become fully mechanized and boost production. This will become imperative in the next three years as surface chrome will be depleted and operations will require underground exploitation below 20 meters in depth.
According to the draft, the current low predatory domestic market prices offered, leaves Zimbabwean chrome producer’s growth vulnerable with the limited opportunity to grow primarily dependent on foreign direct investment at the expense of the indigenous investor/producer.
The newly revised pricing model when implemented will further increase employment via associated chrome services in transportation, weighbridge management and charges, services, parts among others.
In order to increase export and domestic transaction efficiency, the graft sets that, allowing banks to process export and transaction sales documents on behalf of the chrome miners, will allow for sales contract based financing driven by off take agreements.
Banks will then be able to finance mineral resource studies which will enable life of mine valuations, further empowering miners to reinvest and vastly grow production output while maintaining their operational ownership and control.
This will enable the Regulatory Authority MMCZ to follow up on transactions processed. Environmental, Safety, Research and Technical Support: There is need for programs specifically designed to support chrome miners as they prepare to mine below 20 meters in depth.
This will ensure greater efficiencies are realized, sustainable mining, and high production volumes. Majority of mines have significant chrome resource within the mines which due to high expenses and limited technical expertise are not being fully accessed. A strong government led initiative will ensure these experts are available to miners at a reasonable cost.