The Minerals Marketing Corporation of Zimbabwe (MMCZ), is pushing for location based pricing mechanism for chrome that will see the mineral going for different prices to encourage buyers’ appetite in less accessible areas.
Addressing stakeholders in the chrome mining sector at a stakeholders interface on Monday, MMCZ acting general manager Mr Masimba Chandavengerwa, said Zimbabwe sells its chrome, largely to China for between $240 to $250 per tonne.
Local chrome miners then receive $120 after factoring in logistics among them Ocean freight, insurance, port handling and railage.
To the Government marketer’s credit, the figure is higher than other international producers among them South Africa who are selling for $200 to $205 per tonne.
The challenge, however, is some buyers are turning down chrome from remote parts of the country for logistical reasons with the Northern Dyke the most affected as international buyers prefer chrome that is closer to the Durban exit port.
“What we would want looked at obviously is the regional differences in terms of logistics as they come up with prices. So obviously we would want a situation where we have different prices for different miners depending on their locality,” said Mr Chandavengerwa.
“Some miners because of their location find it difficult to attract buyers and we end up with product pile up in some areas, so some of those things must be factored in when coming up with prices other than just looking at chromium content.
“As you move from one region to the other, from one mine to the other you find that the chrome to iron ratios are different but there is need to go further and differentiate chrome from one mine to the other,” he said.
A representative of the miners, Mr Masango Mahlahla, who made a presentation on behalf of chrome miners, said in as much as miners in less convenient mines or in the northern dyke could feel hard done by the differences in pricing, it was unavoidable as it is the said reality of the industry.
Mr Mahlahla said such differences will allow all miners a chance to attract foreign buyers.
“These are things which are still in early discussions, but as miners the benefits of having regional pricing or location pricing means that the miner who is deep in the bush who normally would require additional cost by a buyer to reach them, can now have access to export or even domestic markets,” said Mr Mahlahla.
Meanwhile the MMCZ is confident of clocking one million tonnes of chrome ore sales for 2018 having managed to ship out just over 405 000 tonnes in the first half of the year according to Mr Chandavengerwa.
(By Ishemunyoro Chingwere)