ZimAlloys key to Metmar growth

is vital to its plans to be among the top 10 chrome producers in South Africa in 10 years.
Zimbabwe and South Africa, between them, hold more than three-quarters of the world’s total chrome ore reserves.

Metmar chief executive Mr David Ellwood said the firm is keen to establish itself in many countries in the next 10 years, to realise its vision of providing different grades of material to the international market.
But Mr Ellwood said Metmar regarded itself as an integrated ferrochrome producer in the long term and wanted to see how far that goes.
This would depend on the contribution from ZimAlloys, which holds substantial chrome reserves.

“About 70 percent of the world’s chrome reserves are in South Africa, with Zimbabwe holding 15 percent,” he said. “Their combined hold is 85 percent of the world’s reserves. Chrome is something we believe in, and the demand for it will continue.”

Metmar recently entered into a R61,4 million transaction to buy a further 60 percent of South Africa’s Eastern Belt Chrome, as it seeks to assert its dominance among the big chrome players.
This would take the firm’s ownership in Eastern Belt Chrome to 80 percent, in line with its new growth strategy to become a major chrome player.
Mr Ellwood said China, which does not have its own chrome ore sources, is positioning itself as one of the lower-cost ferrochrome producers through importing cheaper chrome ore, mostly from South Africa.

Other players have suggested that an export levy be imposed on chrome ore exports. But Mr Ellwood said he did not believe that was the way to go.
Metmar plans to invest in a crushing/screening capacity and washing plant in support of the South African and Zimbabwean governments’ calls to increase domestic beneficiation, which would bring better rewards.

But infrastructure and power, in the case of Zimba-bwe, remained of great concern in South Africa, as far as expansion and value-adding to chrome is concerned.
“In order for people to beneficiate and to create as much value as they can in a country of the resource’s origin, the infrastructure needs to be in place to allow the investor the opportunity to beneficiate,” said Mr Ellwood.

Metmar focuses on developing assets and generating revenues related to the mining, production and trading of ores, alloys, metals, plastics, rubber and chemicals.
In Zimbabwe Metmar would have to play its part in securing the US$18 million ZimAlloys requires to raise output capacity to optimum levels.

The US$18 million funding would also be required for the refurbishment of the ferrochrome processor’s ageing equipment and furnaces.
ZimAlloys contends that after refurbishment of its DC arc furnace the firm will have the capacity to process 700 000 of ferrochrome and synchro-chrome.

The firm holds 10 000 claims and 15 million tonnes of ore reserves. This would take 18 years to exhaust, assuming production is at full capacity.
The Midlands-based firm’s production capacity currently stands at 2 000 tonnes per month against installed capacity of 280 000 tonnes per month.