Zambia’s government’s decision to ban of export of scrap metals has been met with resistance from players in the iron and steel industry with dealers opposing the move. Last month the government ordered the stop in exports of scrap metals to allow lee way to dealers in the steel and iron industry gets real returns.
However, dealers in the manufacturing sector, chiefly scrap metals dealers contend that manufacturers need to create their own reserves by bidding for raw materials from the mines’ salvage yards rather than influencing the government to impose the export ban of scrap metal.
Mr Richard Sooka spokesperson of the scrap metal dealers said that the impending ban would affect small scale entrepreneurship that the government sought to promote among its citizenry adding that the action by scrap metal dealers was out of entrepreneurship and the need to survive under the prevailing liberalized economic environment.
Recently government imposed various measures aimed at developing the steel industry in Zambia because the importation of steel and iron products was affecting local manufacturers. Other measures include the introduction of 25 per cent duty on importation of grinding mill balls.
However, the dealers argue that instead the government should level the playing field since local manufacturers offered lower prices that force them to export the raw material.
Siwoende Lutuka Investments Limited said that “We buy scrap by bidding from the mines’ salvage yards and also from the railways at ZMK 800,000 per tonne but local companies offer half the amount so if the measures are aimed at creating reserves let the local manufacturers also bid from the same source and stop influencing government to ban exports. We have employed people and we have borrowed money from banks and we have also signed contracts with steel companies in South Africa hence we appeal to government to give us grace period to fulfill these engagements.”
On calls by the Association of Manufacturers that the export ban on scrap metal would increase production of steel and iron, Mr Fabian Chisulo, a dealer said that scrap metal prices needed to be revised to international standards.
Mr Chisulo, who spoke on behalf of others said that “Our contention is not on the export ban, it is on the prices. The ban can stand as long as the prices are pegged at London Metal Exchange. Government should step in to protect dealers from manufacturers offering exploitative prices and in other countries London Metal Exchange prices are reflected in their local markets.”
Another dealer, Mr Lubasi Kalumiana said that there was no market for cast iron and hard steel was lacking. Clement Soonga of Livingstone added that it was wrong for the government to continue supporting foreign owned firms at the expense of locally-owned companies.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
