Chinese investors squeeze out local chrome miners – Newsday Zimbabwe

Since 2008, the Midlands-based smelter has been outsourcing the extraction of chrome from its many concessions and the delivery of its supplies to small-scale miners.

The Zimbabwe Mining and Alloy Smelting Company (Zimasco) has dumped about 150 small-scale chrome miners in favour of Chinese investors, an investigation has found.

The affected miners are crying foul because their exclusion is against the Zimbabwe Investment and Development Agency (ZIDA) Act and the Constitution.

Article 13 of the Zida Law (Chapter 14:37) prohibits discrimination between local and foreign investors.

“The Agency (Zida) shall accord to foreign investors and their investments treatment no less favourable than that it accords, in like circumstances, to domestic investors with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of their investments.”

This clause therefore imposes on Zida the responsibility to monitor the conduct of investments involving foreign companies in their relations with their local counterparts in order to ensure equality and fairness in the way in which both are treated or operate.

Article 56 of the Constitution prohibits unfair discrimination and obliges the State to take legislative and other measures to correct unequal treatment of citizens and permanent residents.

In November 2023, Zimasco shut down small-scale mining operations in Mutorashanga, Mhondoro, Lalapanzi, Shurugwi, Mashava, Mberengwa and Neta, killing local contract chrome miners.

Since 2008, the Midlands-based smelter has been outsourcing the extraction of chrome from its many concessions and the delivery of its supplies to small-scale miners.

However, several Chinese mining companies have been allowed to resume operations in areas where local investors previously operated.

Chinese miners have been found to sell the chrome to buyers of their choice, including outside Zimbabwe.

Local miners, known as tributaries, are wondering why they have been forced to cease operations while foreign miners appear to be enjoying preferential treatment as they continue mining on the chrome claims.

Zimasco argued that due to continued power cuts and falling international prices, among other factors, it could not continue its chrome production when it disengaged local miners.

But Zimasco Tributary Committee Chairman Robert Antonio told NewsDay the disengagement was not communicated in writing.

Instead, they were informed of Zimasco’s decision by telephone, unlike in the past when all communications were documented.

The taxpayers also claimed that Zimasco had verbally promised them that they would be allowed to resume operations in June of this year, but this did not happen.

They are also angered by the fact that Chinese chrome miners have taken control of areas where they had already spent time and money developing and prospecting for ore.

“Local mining contractors have been prevented from operating the mine in November 2023,” Antonio said.

“But there are Chinese contractors who have continued to exploit the same areas that were previously exploited by local miners under a contractual agreement with Zimasco.”

He cited Earthgate and Shangxi as some of the Chinese miners who had invaded the concessions on which they operated.

To add to their woes, Zimasco does not allow the tributaries to sell the chrome ore they have already accumulated.

“The problem today is that local miners had already extracted ore… when the contracts were abruptly cancelled. This is despite the fact that the contracts were due to expire in December 2023 and they could renew them the following year, as has been the case for the past 15 years,” Antonio said.

“This ore is currently unexploited,” he said, “and miners are not allowed to sell it.”

He revealed that illegal miners were stealing and selling the accumulated ore, causing huge losses to taxpayers.

Zimasco chief executive John Musekiwa initially said he would respond to questions in writing, but later said Zimasco staff were busy with meetings.

“This week we have board meetings, so there is no one to prepare your response,” he said.

“We thought we could finish preparing the answers today, but we didn’t manage to do so. Let’s postpone it until tomorrow, that’s when we’ll probably be able to give you the answers.”

One of the local chrome miners, Spencer Mushayavanhu, whose contract was terminated, accused Zimasco of sacrificing them for the benefit of Chinese investors despite supporting the company for more than a decade.

“Zimasco does not want to be transparent on the issue of our mining contracts. The mining company has become secretive and evasive. I have been under contract with Zimasco since 2008, but it was terminated without notice last November,” he said.

“They started to act differently when they hired Chinese miners to operate the concessions. To get rid of the artisanal miners, they made absurd demands, such as ordering an individual miner to deliver 5,000 tons per month or risk terminating his contract.

“They know that we don’t have machines, so we will not be able to meet these conditions and therefore the contract will be terminated.”

The miners also claim that even before ceasing operations, Zimasco was buying chrome from Chinese companies at higher prices than them, despite the fact that local players were supplying high-quality chrome.

This led them to speculate that Zimasco had long sought to prevent them from continuing their activities in order to make way for Chinese miners.

“I had a contract with Zimasco since 2008, but I was forced to leave the company because of unfair practices,” said Petnas Badze, a minor.

“They classified my ore as low quality, even though I knew it was high quality. When I asked for my ore so they could sell it elsewhere, they told me it had already been smelted.

“Why were they smelting low-grade ore? Because of these unfair business practices, it was no longer profitable and I had to retire.”

Badze said the same tactic was used to exploit local miners, forcing them to accept low prices for their ore, while Zimasco profited from the true value of the ore.

Some local miners are living in houses owned by Zimasco, but they are now at risk of eviction due to their inability to pay their rent, as their sources of income have been disrupted.

The stranded miners petitioned Midlands Provincial Affairs and Decentralisation Minister Owen Ncube when they were prevented from working.

Ncube allegedly promised them that they would be allowed to resume their activities.

However, when contacted for comment, Ncube said he was not at liberty to speak to the media.

Zida’s chief executive, Tafadzwa Chinamo, requested questions in writing and later said “we are still preparing your answers”, but had not yet responded as of last night.

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