TINASHE MAKICHI
The Mineral Marketing Corporation of Zimbabwe (MMCZ) is confident of reaching the targeted US$2bn revenue on mineral sales on the back of expected price improvement during the last quarter of this year.
This comes after mineral sales in the last two quarters have been affected by fluctuating global mineral prices which affected mostly ferrochrome.
According to sales figures from MMCZ, mineral sales for the period to September 2019 in terms of value were at US$1.4bn, up from US$1.2bn in the same period last year.
MMCZ general manager Tongai Muzenda told Business Times that the biggestcontributor to the revenue and sales during the period under review was the Platinum Group Metals (PGMs), concentrates and matte which contributed over 60% of total sales.
This contribution is followed by high carbon ferrochrome and other associated chrome products like chrome concentrate and chrome ores which contributed around 20% to gross sales revenue. Other minerals followed, such as diamonds and granites, bringing in a total US$1.4bn during the period under review.
“However, demand has not been doing great on almost all the metals, but we hope that in this final quarter, from October to December, we can see a revival of price especially on ferrochrome and other base minerals,” Muzenda said, adding:
“So we will continue to make sure we export as much as possible, so that we can hopefully reach the US$2bn mark by the end of the year. The figures do not include gold.”
Depressed global markets in the first half of 2019 made Zimbabwe to record a decline in chrome concentrate sales of about US$30.8m, which was a significant drop from US$47m recorded by the end of 2018.
The decline in chrome sales was also exacerbated by the on-going trade war between the world’s two biggest economies, China and the United States. As the trade war rumbles on, some African countries, especially Zimbabwe, are becoming collateral damage in the dispute.
China is the world’s top consumer of chromium as well as the top stainless steelproducer, while Zimbabwe is the second largest ferrochrome and chromite ore producer supplying 60% of its production to China for the manufacturing of stainless steel.
But the raging dispute between the US and China means China’s demand for ferrochrome from Africa, mainly Zimbabwe, has been subsiding. Zimbabwe is one of the two top producers of chrome in the world but due to Western sanctions imposed since 2001, China has been Zimbabwe’s biggest market.
While the US imports steel from more than 100 countries, threequarters come from just eight countries and the top supplier in 2017 was Canada, followed by Brazil, South Korea, Mexico and Russia. Other exporters to China include Turkey, Japan and Taiwan.
China is just outside the list at number 11 despite producing about half of the world’s steel but still command a bigger voice in as far as the American market is concerned.
This means countries like Zimbabwe and South Africa who see China as a lucrative market are bound to take a tumble both on the volume of exports price amid revelations that demand from China for chrome has been low.
