HomeBusinessZimAlloys engages Chinese firm

ZimAlloys engages Chinese firm

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HARARE — Former Anglo American Plc ferrochrome producer, Zimbabwe Alloys, has engaged an unnamed Chinese firm to recover chrome from its dumps while talks are underway with some potential investors to inject fresh capital into the business, the judicial manager has said.

Zim Alloys, which was sold to the Farai Rwodzi-led Benscore consortium for the equivalent of $10 million in 2005, was placed under final judicial management last year due to poor performance attributed to the closure of its four furnaces, poor global metal prices and escalating costs.

At the time it was placed under administration, the group’s net asset position stood at $71 million while net current liabilities were at $36,7 million.

Its biggest creditor is Interfin Bank, which is under curatorship and in which Rwodzi is also a major shareholder, owed $20 million.

Judicial manager Reggie Saruchera of Grant Thornton told The Source on Wednesday that the company signed an agreement with a Chinese firm two months ago to recycle some of its dumps.

“They are importing and setting up the machinery and in the next three to four months they will be fully operational,” he said.

Last November Saruchera told creditors at the High Court that the Chinese firm would recover metal from half of its slag dump estimated at four million tonnes and worth $2,7 million, while a South African mineral processing firm, Specialised Metallurgical Projects, would extract from the balance.

At the time, the company planned to upgrade its Lalapanzi plant near Gweru to increase production to 7 000 tonnes per month while another one at Sutton Mine in Mutorashanga, would also be upgraded and new equipment installed to realise about 14 000 tonnes of concentrate per month.

All these initiatives were expected to generate $46,6 million in revenue per annum, with an estimated operating profit of $13,6 million.

Saruchera said the process of recovering chrome from dumps would take between two to three years, with an estimated recovery rate of between two and 5%. He said the company, which was seeking $50 million in fresh capital, was in talks with some potential investors.

“Zim Alloys is talking to four investors who are at various stages of conducting due diligence,” he said, but declined to elaborate.

The government imposed a ban on chrome ore exports in April 2011, in a bid to promote local refining but granted ZimAlloys temporary permission to export its chrome ore.

Zim Alloys is owned by Benscore Investments, which holds 83% equity; Spain’s Cometal SA; Cometal Trust Zimbabwe and Rosenmarket Investments, with 10 percent, five percent and two percent shareholding, respectively.

— The Source

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