Zim Alloys seeks to unlock $225m

via Zim Alloys seeks to unlock $225m | The Herald August 11, 2015 by Conrad Mwanawashe

ZIMBABWE Alloys stands to unlock about $225 million from the export of three million tonnes of chrome ore over five years if Government grants the company’s application for an export licence.

Government recently lifted a ban on the export of chrome ore and has since set up a special purpose vehicle to facilitate buying and selling of the ores.

Zim Alloys general manager Mr Mike Dzinoreva said the funds realised from the export of ores will be invested in creating additional smelting capacity.

“Assuming that we are able to export three million tonnes of lumpy and concentrates, $11,2 million will accrue to Government, $2,25 million to the Minerals Marketing Corporation of Zimbabwe, $72 million to small-scale miners, $102 million to large-scale miners, and our contribution which will go towards recapitalisation refurbishments of furnaces will amount to $37,5 million.

“In total we can unlock a value of $225 million if allowed to export ores into the world market,” said Mr Dzinoreva.

The ferrochrome producer hopes that revenue from export sales could come in handy towards the refurbishment of its biggest furnace targeted for next year.

The company’s A3 furnace, the largest in the country, and capable of producing 3 600 tonnes a month and revenues of about $3,6 million a month, is expected to be refurbished and brought back on line in 2016.

“Because of its size we obviously enjoy the economies of scale and should be able to produce competitively. We are grateful for the lifting of the chrome ore ban and we need to secure a licence so that we start exporting now,” said Mr Dzinoreva.

He said Government is yet to respond to the application for an export licence.

Last week the company said it is seeking $2,5 million from the Distressed Industries and Marginalised Areas Fund to be able to bring back two other furnaces which would enable the company to increase its production capacity.

Zimbabwe Alloys mines and refines chrome ore to produce specialty ferrochromium alloys for the worldwide market and recovers metal from slag through jig and spirals technology for sale locally and for export.

Its mining activities are concentrated along the Great Dyke.

Government lifted the ban on the export of chrome ore to allow for the export of up to 30 million tonnes of chrome ore, lumpy, fines and concentrates, over and above the export of processed ferrochrome as part of measures to promote survival of chrome pro- ducers.

Government said the threshold of up to 30 million tonnes of chrome ore will be subject to review based on desired developments in the establishment of additional smelting capacity in the country.

Other measures include the reduction of electricity tariffs from 8,0 cents to 6,7 cents per kilowatt for chrome ore producers in order to assist them to operate viably to allow them to create investment capacity in smelting.

Zim Alloys is sitting on open castable resource of 6,9 million tonnes and underground resources about 43 million tonnes, bringing the total resources to about 50 million tonnes.