Zimbabwe’s forlorn minerals export dream
IT is said dreaming is a human right that was granted to every human being by God at the beginning of time.
And fertile dreaming has kept many trudging through the journey of life. For without assuring himself/herself of a better tomorrow, many a man would give up on life and its many challenges.
Zimbabwe is one country that fondles a dream of a bright future.
This bright future is premised on the fact that the country is endowed with an abundant mineral wealth, some of which could take billions of years to exhaust.
One such mineral is chromium, otherwise known by its abridged version as just chrome.
Chromium is a metal used to induce hardness, toughness and chemical resistance in steel.
It is also used to make super-alloys that can perform well in the hot, corrosive, and high-stress environment of jet engines among others, which makes it the mineral of the future because such industries as aviation and others cannot survive, let alone flourish, without it.
In 2011, the country decided that it needed to make the most of its chrome blessing, so government mandarins — in their accustomed wisdom — decided to ban all raw chrome exports, hoping that the ban would result in the setting up of processing plants that would ensure that the country would realise more from the sale of a processed mineral than just shipping the raw ore.
Sadly this did not happen.
Instead, mountains of hundreds of thousands of tonnes of raw chrome built up around the country, with no meaningful beneficiation taking place.
The country continued to survive from hand-to-mouth, despite its rich mineral endowment.
So in June this year, the same government mandarins — again in their accustomed wisdom — decided that for the cash-strapped government to survive another day, it would not do much harm if they would lift the four-year-old ban on raw chrome exports.
This, they argued, would allow the country to get the billions of United States dollars that are needed to inject life into its economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, which was anchored on mining when it was crafted.
So a decision was made to export just 30 million tonnes of raw chrome and other minerals for this short-term purpose. It was going to be that easy. Fine and dandy.
But, the problem these wise mandarins never thought of was how they were going to ferry the huge mountains of chrome ore to the ever-waiting global market.
During the Parliamentary budget seminar for the 2016 National Budget, held in the resort town of Victoria Falls in October, Mines and Mining Development Minister, Walter Chidhakwa, assured his Cabinet colleagues and the Parliamentarians that the Minerals Marketing Corporation of Zimbabwe, a parastatal trusted with selling the country’s precious minerals to the global market, was raring to go.
He assured them that this strategy would see government killing the proverbial two birds with one stone as this move would also breathe life into the moribund National Railways of Zimbabwe (NRZ), the railway parastatal that is being trusted with hauling the chrome ore to the nearest port at Beira in Mozambique, en-route to the various global markets.
One of the disciples of this gospel is Dexter Nduna, the Chegutu West legislator who doubles up as chairman of the Parliamentary Portfolio Committee on Infrastructure Development.
“It’s given, we will be able to kill two birds with one stone,” an overjoyed Nduna beamed.
“We have pushed the executive to say, move all that 30 million tonnes of chrome using NRZ. We are saying we should pay NRZ cash to move the chrome it can so that we are starting from that point to rehabilitate NRZ using our own God-given resources,” Nduna continued.
Not so fast, warned, Deputy Mines Minister, Fred Moyo.
The NRZ that Nduna had in mind is nowhere near the NRZ that is supposed to do the actual job.
Moyo, who ironically deputises Chidhakwa, knows better about what NRZ can do and cannot do, having learnt his hard lessons during his tenure as the managing director of Hwange Colliery Company.
According to Moyo, actualities on the ground show that NRZ has no capacity whatsoever to move any bulk minerals from this country in a way that would meaningfully make the whole exercise commercially viable.
“We need to make sure that our transport systems are efficient. We need to do something about our infrastructure in order to move minerals. Zimbabwe’s minerals can, at the moment, very well be termed as locked. If we are going to get a train to move 1 000 tonnes of minerals to Mozambique and back within eight to nine days, each train does 4 000 tonnes (per month) and because we have only a single lane, we can fit say only seven trains and that will be 28 000 to 30 000 tonnes (per month) and the best vessel which can give you value for money is at least 75 000 tonnes so you want your minerals to sit at port for three months in order to fill one vessel? And by the way you are given only 30 days after which the port will start doubling (demurrage) rates, so we can forget it!” Moyo said.
At this rate, using the NRZ option, Zimbabwe’s chrome stockpile of over 400 000 tonnes which is ready for shipment to the market would take at least a year just to get to Port Beira. That would also mean several decades to ship out the envisaged 30 million tonnes.
Moyo’s point seems to be confirmed by a private coal mining firm, Makomo Resources, which early this year had to buy its own six locomotives saying that its 2014 coal exports had taken a 40 percent nosedive on the previous year’s figures because of its reliance on service from the decrepit NRZ.
The company is getting wagons from South African logistics giant Grindrod Limited.
NRZ is also expected to haul in maize the country is importing in order to alleviate the food shortages, which the government blames on inclement weather conditions.
Private grain importers are relying on the expensive road transport system to bring in some of the maize from neighbouring countries as realities on the ground show that the troubled NRZ would need to make over 700 train trips to bring in the maize, a capacity that the parastatal does not have.
The parastatal, now a pale show of its former self, needs about US$1 billion to retool and it is currently sweet-talking the Development Bank of Southern Africa over a possible US$650 million loan.
At independence in 1980, its predecessor, the Rhodesian Railways, had a formidable fleet of 109 locomotives that operated on a pristine network and could timeously deliver goods and passengers anywhere in the country and the region.
An NRZ insider this week told the Financial Gazette that a head count of the parastatal’s locomotives was less than 50, including several dozens of those that have not been operational for years due to lack of spares.
Its wagon fleet has correspondingly depleted over the years due to non-maintenance and natural attrition and its rail network has about 20 percent caution infestation rate, which is the equivalent of potholes on the road surface.
These cautions are spread all over the country’s 2 760 kilometre network which, in 1897, was futuristically designed to carry 18 million tonnes of traffic every year.
The effect of these cautions on the tracks is that it becomes difficult to navigate since they are single lanes. Locomotive drivers have to travel slowly until they get past the caution area and therefore journeys take longer.
When in 1974, the then future President of Mozambique, Samora Machel, decided to enforce United Nations sanctions imposed on Rhodesia 10 years earlier, following Ian Smith’s Unilateral Declaration of Independence from Britain, by closing the Rhodesia-Mozambique border, one of the major mining companies, the London and Rhodesian Mining Company (Lonrho), a company owned by the Janus-faced British business magnate, Tiny Rowland, had over 400 of its rail wagons stranded on the Mozambican side, where they were delivering largely raw chrome which was being exported to the United States and other Western nations.
This was just but a small fraction of the rolling stock that the company owned, which allowed it to deliver chrome and other minerals ores to the Port of Beira timeously.
More wagons were owned by such firms as the Rhodesia Iron and Steel Company, which is now the Zimbabwe Iron and Steel Company.
So important is Zimbabwe’s high-grade chrome in the global markets that after the United Nations slapped blanket sanctions on the rebels in Salisbury, six years later — in 1971 — the American Congress passed a law called the Byrd Amendment, which allowed them to violate the UN sanctions in order to import Rhodesian chrome in fulfillment of America’s Strategic and Critical Materials Stock Piling Act.
After Machel closed his country’s border with Rhodesia, in 1974 Smith’s government decided to open another export route, through his soul mates in apartheid South Africa, by building a railway line linking Rutenga and Beitbridge, and thereafter to South African ports.
Although engineering experts put the timeline for the construction the 145 km railway line to take 24 months to complete, such was the indefatigable fighting spirit of the Rhodesians that the project was completed in a world record time of just 93 days, 21 months ahead of schedule.
In cruel comparison, it has taken the government of Zimbabwe nearly 20 years just to plan the construction of a 30 km railway line linking Harare and its dormitory town of Chitungwiza, a planning process that has been punctuated with several false ground-breaking ceremonies.
Until Zimbabweans get imbued with the indomitable spirit of the Rhodesians and do something about their worsening transport and infrastructure challenges, the dream of exploiting the country’s vast mineral resources for their own betterment might just remain a pipe dream.
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