Australian firm gets 70 percent stake in chrome mine

via Australian firm gets 70 percent stake in chrome mine | The Source  January 7, 2014

An Australasian-based exploration and resource development company, TPL Corporation on Tuesday said it has received a licence from the Zimbabwe Investment Authority to take a 70 percent stake in chrome mine, African Chrome Fields (ACF).

ACF owns around 150 alluvial chrome mining concessions in central Zimbabwe and a recovery plant which can produce a chrome concentrate and a magnetite product.

The current owner of ACF, Farvic Consolidated Mines, will keep the remaining shareholding of 30 percent, although under the terms of the ZIA approval it will have the right to claw back a 21 percent stake in the company via a purchase of shares from TPL.

Under Zimbabwe’s indigenisation law, foreign firms are required to cede 51 percent shares to local black people.
ACF’s existing plant and equipment is capable of processing around 30,000metric tonnes per month of feedstock to generate around 3,000 mt/month of chrome concentrate, the Australian Stock Exchange-listed TPL said.

The company said it intends to restart the chrome mine and processing plant within the first quarter of 2014, assuming shareholder approval of the investment.

“Chrome concentrate can be sold domestically or exported if the company receives an export quota or access to an export quota,” TPL said.

The company intends to apply for a quota to export a fixed tonnage of chrome concentrate and, if approved, to use the proceeds to generate sufficient cash reserves to finance the construction of a ferrochrome smelter in the country.

Government banned chrome ore exports in 2011 to promote local refining but has since relaxed the law to accommodate small producers that had accumulated huge stockpiles due to limited absorptive capacity of local smelting companies.

In his 2014 budget statement, finance minister, Patrick Chinamasa said government will uphold the ban but support companies whose processing operations go beyond ferrochrome production, in order to mitigate against price volatility on the international market.