Govt ready to parcel out iron ore concessions

Source: Govt ready to parcel out iron ore concessions | The Herald December 15, 2016

Martin Kadzere Senior Business Reporter—

GOVERNMENT is prepared to parcel out some iron ore concessions to investors willing to set up mines and smelters, Mines and Mining Development Minister Walter Chidhakwa said.It is estimated that Zimbabwe has 30 billion tonnes of iron ore reserves, with the bulk of the concessions held by the Government through Buchwa Iron Mining Company.

Before the closure of Zimbabwe Iron and Steel Company, BIMCO was exploiting the Ripple Creek mine, which provided iron ore and limestone as feeds to ZISCO steelworks.

“The Government is prepared to consider applications provided they are in line with Government policies and our National Development Plan,” said Minister Chidhakwa.

In terms of the law, foreign investors are prohibited from owning more than 49 percent shareholding in companies exploiting natural resources. And in line with the Zim-Asset, miners are encouraged to set up to beneficiation facilities to boost earnings from mineral.

Iron ore has remained one of the unexploited base mineral in Zimbabwe, despite holding immense potential to turnaround the fortunes of the economy.

The international price of iron ore broke through the $80 a tonne barrier last Friday, up from $38 per tonne at the end of last year, although still below the peak of $182 a tonne in 2010.

The increase beat analysts expectations, which forecast iron ore prices to be around $65 per tonne.

The unexpected rally has been largely driven by hot money from Chinese speculators.

Rising Chinese demand is also a key factor as mainland steel mills increased the use of higher grade iron ore to reduce production cost after the price of steel-making ingredient metallurgical coal surged, according to reports.

Challenges facing the steel works at ZISCO have impacted negatively on iron ore exploitation as no iron ore production was realised in 2009. A deal to sell the majority shareholding of Zisco and Bimco to an Indian firm Essar Africa Holdings failed to materialise over a number of issues including the settlement of its domestic debt.

Essar planned to build a new steelworks complex, replacing the antiquated plant and exported it via a terminal it wanted to build in the port of Beira, Mozambique. The company was also looking into the feasibility of building iron ore and coal terminals at the port of Beira.