By Reason Razao
GOVERNMENT’s decision to set the chromium prices through the Minerals Marketing Corporation of Zimbabwe (MMCZ) will likely turn away investors and companies willing to venture into, top economist has said.
In a post-Cabinet briefing Tuesday, information minister, Monica Mutsvangwa, said the government had agreed to a policy change whereby all chrome ores will be traded through MMCZ.
“The MMCZ, through a Chrome Ores Coordination Committee, will set quarterly prices of chrome ore which miners and traders will trade at. The Committee will comprise representatives of Smelters and the Chrome Small-Scale Miners Association,” Mutsvangwa said.
Government however did not reveal the forces behind the policy change.
Economist Gift Mugano said the new measures in chrome mining and trading will likely turn away investors.
“Price control does not work, Settings prices will make the measures look more like command pricing and this usually is tantamount to upsetting existing operations,” Mugano said.
“Zimbabwe does not consume chrome, we export chrome, therefore setting prices will only affect the local chrome industry.”
He added that Zimbabwe as a player in the industry, it was near to impossible to set chrome prices for the international market
“Chrome prices are set internationally and we are just a small player in the market, it would be almost impossible to dictate prices to international players. The move will likely push away investors and those mining chrome.”
According to Mugano, the government needs to provide information on what premised such a measure.
“As it stands we do not know what triggered the enactment of the regulatory measures. MMCZ should rather provide information to the players in the market about the trends in chrome trading.”
Zimbabwe has the world’s second-largest reserves of high-grade chromium ore after South Africa, with deposits of about 10 billion tonnes, equivalent to around 12 percent of the global total, according to the Zimbabwean Ministry of Mines and Mining Development.
Some of the measures in the mining industry include a new policy that compels miners to pay half of their royalties in commodities and half in cash as part of efforts by the country to build precious metal and mineral stockpiles for the first time.
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