daniel chigunwe
Oliver Kazunga
KUVIMBA Mining House (KMH) has set aside US$45 million for various capital expenditure projects at Zimbabwe Alloys Limited (ZimAlloys), whose smelting plant was restarted last month after nearly US$7 million was injected into the project.
The Midlands-based company, which is one of KMH’s subsidiaries, is reasserting itself as a leading alloy producer in the country after the takeover by KMH in 2019 having been under corporate rescue for about eight years while smelting operations ceased in 2013.
ZimAlloys was placed under corporate rescue due to a combination of factors, among them — a significant dip in the price of high-carbon ferrochrome on the international market, and at that time the furnaces were due for realignment and the company did not have funding to undertake the project.
In an interview during a media tour of the firm in Gweru last Thursday, ZimAlloys managing director, Deric Dube, who is also KMH head of the bulk minerals cluster said: “Our total capex (capital expenditure) requirement as a business open-ended is US$45 million, however, we have staged it because like I said to you earlier — US$7 million has already been spent in various capex projects including smelter re-start.”
As a result of the firm’s operations rebooting programme, which is taking a phased approach, ZimAlloys is targeting 120 000 tonnes of high-carbon ferro-chrome annually.
High-carbon ferrochrome is a ferroalloy used in the production of stainless steel and other chromium-containing alloys.
“In terms of capacity utilisation, we are around the 40 percent mark now coming basically from almost nothing and I am talking on the furnace and alloy production side.
“On the concentrates and lumpy chrome production, the potential for scaling is limitless because of the amount of resources.
“So, what we measure against is our current production – in terms of capacity on our current production on the concentrates and lumpy side, I would say we are about 80 percent if we are just judging based on the current operational projects,” said Dube.
From the first smelting furnace, ZimAlloys is targeting to produce about 6000 tonnes annually of high-carbon ferrochrome generating revenue amounting to US$6 million per annum.
And so far, the alloy producer has six other furnaces that are defunct and plans are in the pipeline to gradually resuscitate them.
Under Phase 2, ZimAlloys plans to establish another furnace in the next 12 to 18 months producing 24 000 tonnes of high-carbon ferrochrome per annum.
Currently, the company employs 350 people from about 100 in 2019 and the number is anticipated to continue on a positive trajectory.
At its peak in the late 1990s to early 2000s, ZimAlloys employed around 3 500 people.
Following a new lease of life brought by KMH, ZimAlloys has also managed to restart three chrome concentrator plants and this has almost doubled production from what it was in the corresponding period last year.
“Our functional operations at the moment, we produce about 8 000 tonnes of chrome concentrates on a monthly basis — we are in the process of growing that number.
“This is all in aid of trying to revive the business and strengthen it to the place where it needs to be and beyond what it used to be,” he said.
At the moment, Dube, said his organisation is the only smelting firm in Zimbabwe that is not just producing high-carbon ferrochrome.
“If you look at our exports in terms of the value chain, we have also got exports of low-carbon ferrochrome, which is actually quite a premium.
“We also have ferrosilicon chrome and ferromanganese — a different basket of alloys helps a company to be able to pivot in difficult times when it comes to depression of a particular product or various other market sensitivities that could shift a business that would have the concentration risk of just doing one product.”
And between 2009 and 2012, ZimAlloys used to export around 120 000 of ferrochrome per annum generating at least US$100 million.
The company’s exports were destined for countries such as China, Japan, South Korea and the United States and other countries in Europe like Germany and France.
ZimAlloys has subsidiaries that include ZimAlloys Chrome — which operates chrome mining claims along the Great Dyke region as well as ZimAlloys Mines and JM Alloys that are currently dormant, and plans are in the pipeline to revive the entities.
Bongani Ndlovu