According to sources, Zimbabwean mining company (MMCZ) intends to set up a chromium miner financing mechanism to help small miners obtain affordable working capital. The move is expected to ease the punitive interest rates charged by small chromium miners in the local market.
Chrome miners have been exploited by buyers, who realize that the miners are in urgent need of money. It is reported that unscrupulous buyers buy chromium at a price of 12 US dollars per ton, rather than the current market price of about 26 US dollars per ton.
Tongai Muzenda, CEO of MMCZ, said: "Chrome miners are being used because they urgently need the money to be used immediately. Some people want to survive, and almost everyone needs working capital to return to the mine.
"We are looking for options to help them solve their problems, and as MMCZ, we are considering setting up a chromium mining fund where we can help miners get working capital and sell on better and more favorable terms than they are currently," Mr. Muzanda said.
MMCZ intends to act as a middleman between banks and small miners to secure funding on better and affordable terms.
The government is also expected to allocate some funds through the state budget to support the operation of chromium mining enterprises.
"We will not use our own funds because we do not have any funds, but if we do, we will talk to the banks so that they can provide funds to the fund on the basis of mortgages. And use the mining fund that the finance minister talked about last year," Mr. Muzanda added.
MMCZ has implemented a series of measures to promote delivery and production. A pricing committee has recently been set up to play an active role in addressing market distortions that have pushed some small miners to the brink or brought them to the brink of collapse.
"the pricing committee is located in MMCZ, and includes ZMF (Zimbabwe miners' Federation) and mining companies. The new challenge is that they often adjust prices because they rarely see each other, which has no incentive for miners because they want to pay quickly. Without working capital, miners always chase those who pay quickly. We know that the price offered is very low.
"this is part of the issue we lobbied for the government to investigate," he said.
Zimbabwe produced 300,926 tons of chromium in the first quarter of this year, compared with 353,669 tons in the same period in 2020.
Producers say the decline is partly due to the low pricing of most Chinese buyers, who have recently set up smelters in Zimbabwe.
Chromium is one of the key minerals that the government is expected to support its goal of building a $12 billion mining industry through revenue over the next two years, currently worth about $3 billion.
Zimbabwe accounts for 12% of the world's chromium reserves, second only to South Africa. Official statistics show that only 5% of chromium mines have been mined.
Author: gdssmpa
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