Zimbabwe: MMCZ, Chinese Nickel Company Sign MOU

HARARE, Aug. 10 -- The government-run Minerals Marketing Corporation of Zimbabwe (MMCZ) has signed a memorandum of understanding (MOU) with Jinchuan Nickel Mining Company of China that might result in the bulk of nickel, copper and cobalt mined in the country being sold in the vast Asian state.

    In a report tabled before Parliament two weeks ago, MMCZ chief executive officer, One-simo Moyo, described the deal as "strategic," adding it could turn out to be a catalyst for the accelerated marketing of Zimbabwe's minerals in China.

    "The Minister of Mines and Mining Development approved and authorised the corporation to sign an MoU with Jinchuan Nickel Mining Company, a Chinese company which specialises in mining, production and trading of nickel, cobalt and copper culminating in a joint venture which was strategically established to provide a gateway for Zimbabwe's minerals into the growing Chinese market in line with the government's 'Look East' Policy," Moyo said in the report, dated February 16 2009.

    Jinchuan Group is the largest producer of nickel and cobalt in China with an annual production capacity of 130 000 tonnes of nickel, 200 000 tonnes of copper, 6 000 tonnes of cobalt, 8 000 kilogrammes of platinum group metals (PGMs) and 1,2 million tonnes of chemical products.

    According to the company's website the output of nickel and PGMs accounts for more than 90 percent of the total produced in China.

    Jinchuan also produces chemical products such as sulphuric acid, caustic soda, liquid chlorine, hydro-chloric acid and sodium sulphite.

    Demand for nickel has been high in China's booming stainless steel manufacturing industries since 2003 with local producers failing to satisfy the market.

    Nickel prices took a sudden dip last year leading to massive closures and job losses in mines across the world, including in Zimbabwe where largest producers, Mwana Africa's Bindura Nickel Corporation (BNC) has been under care and maintenance for close to 12 months.

    While details of the joint venture between the MMCZ and Jinchuan were still sketchy at the time of going to print sources said the deal could result in the highly capitalised Chinese firm joining the current race to exploit Zimbabwe's largely untapped nickel reserves and compete with established players such as BNC in the extraction of nickel.

    The decade-long macro-economic challenges facing Zimbabwe have not spared the mining sector, with declines recorded in all major minerals.

    But Chinese firms have kept faith in Zim-babwe despite the myriad of problems the country is going through, which have triggered massive capital flight in mines and other industries.

    Large investments by Chinese companies have sprouted up in the country, among them the Gweru-based Sino-Zimbabwe cement company, a joint venture between the Industrial Development Corporation and Sino, which in 2005 was projected to increase production from 900 tonnes per annum to 4 000 tonnes. In 2006, Chinese companies were estimated to be eyeing at least US$400 million in investments across Zimbabwe's mining sector.

    Last month, another Chinese company, Sino Steel was reported to have said it was ready to pour in an extra US$10 million in its operations in Zimbabwe.

    (Source: allAfrica.com)