THE Zimbabwe Institute of Foundries (ZIF) has approached the Minerals Marketing Corporation of Zimbabwe (MMCZ) in a bid to block illegal exports of scrap metal, a major impediment choking the sector’s growth.
The ZIF — a lobby group representing the interests of metal casting providers and steel smelters in the country — estimates that the country could save around US$10 million a month in scrap metals export cutbacks and save thousands of local jobs.
Foundry involves the conversion of scrap metal into viable engineering products for national development.
Currently, the sector says industry requires at least 27 000 tonnes of scrap metal per month in order to fulfill their commitments and to operate at around 80% capacity, but is only getting between 10 000 tonnes and 13 000 tonnes per month, thus enabling around 40% capacity utilisation.
Speaking to The NewsHawks this week, ZIF executive secretary Reason Purazeni said several efforts in the past to engage the Industry and Mines ministries over the matter have been in vain, leaving the sector with no option but to engage the MMCZ.
“We are now in the process of engaging MMCZ with our issue as we have come to understand that they are the licensing authority. It is our hope they will assist by not issuing export permits for scrap metal.
“We have not officially sat a meeting with them but informal communication between MMCZ and our chief operations officer has shown they are more than ready to help on the issue and even go a step further as the foundry operation will enhance the beneficiation of minerals,” he said.
Purazeni said given that over 3 000 families are already being supported under these tight economic conditions by local foundries who are trying their best in the circumstances, there is urgent need to ban exports and save the sector.
“There seems to be room for enabling some entities to access export permits for the scrap metal either on the pretext that the commodity has no local takers or is in excess, yet in actual fact local foundries will not be aware of the existence of such scrap despite that we are hungrily hunting for it.
“We therefore ask for a total ban on scrap metal exports as is the case with all our regional neighbours. Currently, Zimbabwe is the only country in the region exporting scrap metal,” Purazeni said.
The ZIF top official said iron and steel scrap in South Africa fetches an average US$167 per tonne delivered while transport to South Africa is about US$3 000 per 30 tonne, translating to about US$100 per tonne.
This, he said, effectively means that the net revenue to any exporter of scrap metal, before discounting for labour and other costs, is about US$67 per tonne.
In comparison, the average price of scrap metal in Zimbabwe is US$140 per tonne collected and the price matches the South African price, after factoring in parallel market losses, making the Zimbabwean price much higher than the South African price.
Purazeni added, “What boggles the mind is that the domestic foundry industry is able to add value on the scrap up to six times on the lowest scale, for the domestic market, while other ZIF members add value up to 28 times for the export market. The range of beneficiation ratios of 6 to 28 avail much more foreign currency.” — Staff Writer.