Zimasco back on track

Business Reporter

One cannot mention the Zimbabwean chrome industry without talking of Zimasco (Pvt) Ltd. Its operations are usually synonymous with the Midlands towns of Kwekwe and Shurugwi where the company’s smelting operations and major mining activities are based respectively. However, further up north of the Great Dyke lies Mutorashanga, where winds of hope are blowing due to the resuscitation of the chrome company’s mining operations.The global ferrochrome market has largely been depressed since 2011, having never fully recovered from the global financial crisis of 2008.

To curb the growing loss making position, Zimasco suspended operations in December 2015 whilst exploring various initiatives to restart operations on a lower cost platform.

Chief among the revival strategies was to raise much needed operational cashflow through the sale of chrome ore concentrates following the lifting of the ban of the export of chrome ore by the Ministry of Mines and Mining Development in June 2015.

The ban had been in place since April 2010. Chrome ore concentrates are upgraded from elluvial chrome ore fines which are not suitable for direct use in the normal Zimasco smelting process, making the concentrates a prime candidate for the export market.

Zimasco was granted a permit to export its excess chrome ore in early August 2016. With a 30 000 tonne stockpile of concentrates already available for export when the permit was granted, Zimasco immediately prepared to commence the export of chrome ore concentrates.

Over and above the existing stockpiles, the company has the capacity to produce and export 20 000 tonne every month.

Ms Clara Sadomba, Zimasco’s GM — marketing and administration confirmed that there is a ready market for their high grade concentrates, which are produced from the company’s chrome claims in the North Dyke, Mutorashanga area.

Exports of the chrome ore concentrates began in early September; the initial stockpile of 30 000 tonne which is being railed will augment Applebridge Investments (Pvt) Ltd efforts.

Applebridge is the special purpose vehicle put in place for the export of chrome ore from small scale miners.

One of the conditions of lifting the ban was that smelting companies would be permitted to directly export only those chrome ores which are excess to their smelting requirements.

The creation of the special purpose vehicle, Applebridge, was to allow small scale miners the opportunity to export their material in a regulated and coordinated manner.

The export of chrome ore concentrates by Zimasco will not only bring in the much needed foreign currency for the country, but will directly create over 400 new jobs.

In addition, the imminent resumption of the company’s smelting operations will result in re-employment of over 900 people in Kwekwe and over 1 500 people indirectly for ore supply.

Owing to the large volumes of concentrates to be exported, Zimasco will extensively utilise National Railways of Zimbabwe rail network for it is export traffic.

This is a very welcome development according to NRZ’s Elector Mafunga, the transporter’s marketing director.

The resumption of operations at Zimasco is a welcome development for the NRZ, as ZIMASCO had been one of NRZ’s anchor clients. The development will impact positively on NRZ’s business volumes, which had gone down significantly.

“Over the years, Zimasco has been one of our top three customers in terms of both volumes and revenue earnings. We have therefore been following closely and with keen interest the developments at Zimasco and the global mineral market prices.”

Life in the mining town of Mutorashanga has also been positively affected by the various activities that support the production and export of chrome ores.

Some of these benefits include new jobs in the mining of the chrome ore, chrome ore processing plants, transportation of the concentrates from plant to siding and other indirect services.

The company had earlier in the year ceded 50 percent of its chrome ore claims to Government which has created an opportunity for new entrants into the chrome mining business thus expanding the mining sector.

Zimasco was placed under Provisional Judicial Management on June 3 2016 and Mr Reggie Saruchera of Grant Thornton is overseeing the company’s turnaround strategy.