KWEKWE – One of Zimbabwe’s biggest chrome miners has halted operations in the southern African country, citing a rapidly deteriorating economic climate, highlighted by 288 percent annual inflation rate, the highest in Africa.

Africa Chrome Fields (AFC) which is operated by the South African business mogul, Zunaid Moti said on Tuesday the crisis in Zimbabwe had been compounded by a sharp drop in international chrome prices, which have wreaked havoc on operators across the continent.

It said 500 workers will lose jobs at the operation, where the Zimbabwe National Army is believed to be a dormant partner.

Global prices of ferrochrome, used to make stainless steel, have tumbled this year due to weaker demand from stainless steel mills in top producer China, according to traders in Asia and Europe.

Moti said he had been under intense pressure to close the business due to Zimbabwe’s negative image, but he is set to lose significant wealth after sinking close to US$250 million in the past five years.

“Some people would not want to do business with us because we are in Zimbabwe,” Moti told reporters on Tuesday.

“But the economic meltdown in the southern African country has also caused a negative impact as well,” he said.

Local media reports that Moti had invested over $200 million in the construction of an aluminothermic plant and six other plants that were set to generate 10 000 tonnes of ultra-low carbon ferrochrome monthly within 11 months.

AFC’s move into Kwekwe five years ago was a huge reprieve to a mining community that had seen a string of big operators including the giant ZISCO Steel, once Africa’s largest integrated steelworks, shut down.

Workers’ representative Chaipa Magura told reporters that AFC management, in a meeting held on September 6, had agreed to stop further retrenchments and pay outstanding salaries. However, only security details will be at the premises.

“After consultation between all present, the parties agreed that management pays outstanding salaries and workers shall be called to work when need arises with a seven-day notice. As for now, security details are to remain at the sites,” he said.

In Harare, Newsday on Wednesday quoted a senior official in the Mines ministry blaming chrome prices for the crisis that has returned to Zimbabwe’s mines, which have been recovering from a 2011 ban on ferrochrome exports by government.

“It’s not only ACF that has been affected, but we have big companies such as Nelson in Gweru that have been hammered by the drop in chrome price. We currently have China as our major market and they recently announced the drop in price with over 40 percent,” said the official.

In March last year, ACF Zimbabwe director, Ashruf Kaka, told delegates at the an investment conference that the firm’s investments had created 1 200 jobs in the country.

A further 5 500 people had indirectly benefited from the project, he said, reiterating President Emmerson Mnangagwa’s assurance that investments were safe in Zimbabwe, which is battling to reform unfriendly policies.

Kaka said the ambitious mining firm was also scouring for opportunities in the country’s agricultural sector, which he said presented great opportunities for growth.

He said AFC had entered the country during the most difficult time for investors, when the rule of law was “undermined” by policies of the previous government.

“African Chrome Fields invested in excess of $220 million in Zimbabwe in the last two years. We have already engaged government for diversifying to gold and diamonds. We are committed to Zimbabwe in every respect,” said Kaka.

“We have been looking at agriculture with our local partners, Sakunda. We will be injecting foreign investment into these areas,” he said, assuring investors that this was the time to invest in the country’s mining industry.

Chrome has emerged as one of the most promising minerals.

The Chamber of Mines of Zimbabwe said the chrome sub-sector comprised of primary and ferrochrome producers, both large scale and small scale.

Chrome production is dominated by two large scale producers.

The chromium industry contributed 10 percent of mineral revenue, up from one percent in 2016.

The chamber said the largest chrome producer carried out greenfield and on-mine exploration activities in 2017 valued at $720 000.

It said the industry injected in excess of $5 million for capital projects in 2017, and was planning to spend in excess of $20 million in 2018 to increase production to two million tonnes, from 1,6 million tonnes last year.

“While there were no major mine development projects in 2017, one of the producers spent on mine development in 2018, valued at $2,5 million,” said the CoMZ.

Kaka told global chief executive officers and fund managers that the key to successful investment in the country depended on working with government.

He said Mnangagwa’s government had levelled the playing field for investors.

“Our success and your success is dependent on your relationship with government,” he said.

“This is different from the past; this is what makes the change. Change is taking place and it is irreversible. We are moving forward, and we are not turning back. Someone had placed the pause button in the last 20 years. The rule of law was undermined, with large scale unemployment. In November last 2017, the pause button was released and Zimbabwe is open for business,” Kaka noted.