Zim to mobilise investment in ferrochrome sector

Source: Zim to mobilise investment in ferrochrome sector | Herald (Business)

Martin Kadzere-Senior Business Reporter

Zimbabwe is well placed to mobilise huge investment in the ferrochrome
sector after it granted huge tracts of mining fields to investors
intending to value add the mineral.

Aiding prospects for huge capital inflows into the sector was the ban on
raw chrome exports on Tuesday by government in a development likely to
encourage building of smelters.

Announcing the latest strategy to boost the mining sector during Tuesday’s
post Cabinet media briefing, Information, Publicity and Broadcasting
Services Minister, Monica Mutsvangwa, said the moratorium on raw chrome
ore exports would promote the local value-addition chain.

The announcement comes a week after Finance and Economic Development
Minister Professor Mthuli Ncube said the Government had availed land to
five companies intending to establish integrated chrome mining and
ferrochrome smelters.

Amazon was granted 21 chrome claims on 1 545 hectares, Best Trade was
granted 13 chrome claims on about 1 000 ha while Zimbabwe Alloys, whose
furnace is 70 percent complete also got land exploration. 1

Afrochine and Monachrome were granted 1 000 ha each while Jin An’s
application for nearly 4 000 hectares is being processed.

“It is kind of a carrot and stick approach that the government has taken
and that should obviously boost capital inflows into the sector,” Carlos
Tadya, a research analyst with a local think tank told Business Weekly in
an interview.

Zimbabwe is endowed with arguably the world’s second biggest resources of
chrome ore after South Africa, which is used for metallurgical processes
such as steel manufacturing.

In 2015, Zimbabwe lifted a ban on raw chrome exports introduced in 2011
after companies struggled to build smelters citing lack of capital, high
production costs and power shortages.

Investors were also worried about the country’s indigenisation laws which
required foreign business to own not more than 49 percent in local firms.
The policy has since been scrapped as part of efforts by President
Mnangagwa’s administration to attract investment.

“The environment has changed (from the time of the first ban and now).

“The conditions of doing business are more favourable; no ownership
limitations to foreigners and investments being made by the government and
private sector in the energy sector are likely to attract more capital
into the ferrochrome sector,” a mining executive who declined to be named
for professional reasons said.

Ferrochrome, alongside platinum, gold and nickel is among minerals
expected to help          Zimbabwe achieve the US$12 billion industry by
2023.

Afrochine and Chinese owned Zimasco are the country’s major producers of
ferrochrome.

Chrome ore output for the first quarter of 2021 stood at 300 926 tonnes,
comparable to the previous quarter output of 311 495 tonnes.

Output was weighed down by reduced intake for both raw chrome and high
carbon ferrochrome from China, the world largest consumer due to the
second wave of Covid-19, which constrained shipments of goods.

In response, most local smelters closed operations but took advantage of
this period to refurbish and modernise their furnaces in anticipation of
the resumption of trade.

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