Source: ZimAlloys in talks with Govt over export licence | The Herald October 20, 2016
Tinashe Makichi Business Reporter
Ferrochrome Miner, ZimAlloys is finalising agreements with Government which will see it cede part of its mining claims as it seeks to secure an export licence aimed at boosting the company’s prospects for revival.Government last year ordered Zimasco and ZimAlloys to cede some of their chrome claims to pave way for new investors.
“We are in talks with Government over the land issue and it has been going on well. We are hopeful that a conclusion will be reached anytime soon and ZimAllows will secure an export licence,” said judicial manager Reggie Saruchera of Grant Thornton of Camelsa.
Zimasco has already ceded 50 percent of its claims to Government.
ZimAlloys ceased operations in 2008 is currently in negotiations with a potential investor to inject fresh capital for the revival of its operations. At the same time, the Zimbabwe Asset Management Corporation has already agreed to take over ZimAlloys’ $21 million worth of non-performing loans sitting with a number of local financial institutions as management works towards cleaning the balance sheet.
ZimAlloys was placed under provisional judicial management on July 24, 2014 and was then put under final judicial management in November the same year after the ferrochrome producer’s debt has risen to alarming levels. The ferrochrome company currently has a debt estimated at $60 million, a situation which has proven to be a stumbling block for the company to attract an investor. Zimbabwe has the second-largest chrome ore reserves worldwide and the largest reserves of high-grade ore, estimated at 540Mt.
It has been claimed that if major projects were undertaken within the sector, Zimbabwe could have potential to supply 10-20 percent of world ferrochrome demand. However, the chromium sector has suffered from limited investment compared with the platinum and gold industries and since 2011, the industry has struggled with sharp increases in electricity and mining costs, financial restraints and competition from lower-cost producers.
COMMENTS