REDCLIFF — Steelmakers has called on government to review its mining laws, which classify steel as a mineral instead of making it a finished product, an anomaly the company feels prejudices them.
The classification of steel as a raw material has resulted in steel exporters being charged about one percent commission by the Minerals Marketing Corporation of Zimbabwe (MMCZ) as well as two percent royalty.
Steelmakers group general manager, Alexander Johnson, called on government to introduce a statutory instrument that categorises steel as a finished product to make the industry competitive in the region.
He said, “The challenge we have with our mining laws is that they treat steel as a mineral, which is totally absurd. Steel is a finished product and not a mineral and that anomaly should be corrected by a statutory instrument that steel should be classified as a finished product.
“The impact of this is that when you export you have got to pay the MMCZ one percent commission and two percent royalty because it is a mineral but actually it is not a mineral as it has gone through all the stages of a finished product. Therefore it should not be called a mineral because once you put those costs then you become uncompetitive in the export market and this kind of hurdle should be removed for steel products to be competitive on the export market.”
Of equal concern to the company is the recent floating of tenders by government for the purchase of scrap metal, which might see the lifting of the ban on exports of the commodity.
Johnson said the move would negatively impact on local steel companies some of which might be forced to scale down operations.
The impending lifting of the ban on the commodity comes after the Scrap Metal Merchants’ Association lobbied government to review the prohibition citing viability challenges.
Local buyers are buying scrap metal at between US$80 and US$190 per tonne compared to the international market price of between US$300 to US$600 per tonne depending on the quality and destination of the commodity.
There are about 50 000 tonnes of scrap metal in the country that are lying idle as many steel companies have stopped buying the commodity, which has pushed merchants out of business.
Government, through the Ministry of Mines and Mining Development imposed the ban in 2004 after local manufacturers indicated that they would be able to buy all local scrap metal and encourage value addition of locally available raw materials.