China is the biggest consumer of chrome in the world, but its pricing policies are unfair and might affect the local chrome industry, a local mining expert has said.
Zimasco services director Joel Zvaipa told the Parliamentary Portfolio Committee on Mines and Energy China dictated the pricing of chrome, since they were the largest importer in terms of tonnage, hence offered low prices for the product.
“China does not produce any chrome and they are getting it from countries like Zimbabwe and South Africa, and then producing ferrochrome from it, of which they have already announced that in five years time they even want to overtake South Africa in ferrochrome production — even if they do not have the chrome,” said Zvaipa.
“China is saying by 2016 they will be producing 38% more than South Africa, which therefore means that if Zimbabwe is not careful, we are not going to be able to produce and make profits because China is dictating prices of ferrochrome.”
Ferrochrome is produced by electric arc melting of chromite, iron magnesium chromium oxide and chromium ore. Over the years, Zimbabwe has been forced to export raw chrome due to lack of the special smelting furnaces required, thereby depriving the country of the benefits of exporting value added products.
Zvaipa said Zimbabwe’s competitiveness was being eroded and yet it was one of the biggest producers of chrome with 12% of the world’s chromite deposits while the biggest producer, South Africa had 72% deposits of the world’s chromite resources estimated at 7,6 billion tonnes.