Zimbabwe: Zimasco to Splurge U.S $300 Million – by Phillimon Mhlanga (All Africa.com – January 30, 2014)

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ZIMBABWE Mining and Smelting Company (ZIMASCO), the country’s largest ferrochrome producer, is building a new 600 000 tonnes per annum sinter plant which is expected to boost output, it has been learnt.Sources with intimate knowledge of the company’s expansion plans told the Financial Gazette’s Companies & Markets that the plant, which is the latest technology in ferrochrome production, would cost between US$250 million and US$300 million.

It is understood that funding for the plant will be provided by Chinese majority shareholder, Sinosteel Corporation, which controls a 73 percent stake in the company. ZIMASCO’s spokesperson, Clara Sadomba, said she would not divulge details in the absence of the company’s chief executive who was in China.

“Unfortunately, I can’t officially comment on the developments because my CEO (Li Jinqian) is away on business in China but he is coming back after the second week of February,” said Sadomba. The plant, which will be built in Kwekwe, would process chrome fines into balls that can be processed by other existing blast furnaces.

Experts say the plant supplies the blast furnaces with sinter, which is a combination of blended chrome ores, fluxes and coke which is partially cooked. In this form, the materials combine efficiently in the furnace and allow for more consistent and controllable ore manufacture.

Research has shown that about 70 percent of the world’s primary lead production is produced using the sinter plant-blast furnace combination.

With the sinter technology, ZIMASCO which has underground deposits of chrome ore in dust form which cannot be directly processed in a blast furnace would now be able to convert these ore fines into lump materials which can be processed in blast furnaces.

The sinter plant will also be environmentally friendly as it will have a de-dusting system that traps dust and toxic elements from the furnace to ensure that these are not released into the atmosphere and harm the environment.

Finance Minister, Patrick Chinamasa, said he expects chrome output to increase to 500 000 tonnes this year, benefiting from increased output at ZIMASCO.

“Chrome ore output is projected at 500 000 tonnes in 2014, as ZIMASCO is currently in the process of installing a new high-tech sintering plant,” said Chinamasa.

Official figures show that a total of 312 285 tonnes of chrome was produced during the first 11 months of 2013 compared to 394657 tons produced in the same period in 2012.

Chinamasa said the low chrome output which was expected to increase to 360 000 by December 31, 2013,was due to low capacity utilization during the first quarter of the year, due to viability challenges faced by chrome smelting companies.

Government had relaxed the ban on exports of chrome ore but Chinamasa said the ban on raw chrome exportation policy will be upheld as it encourages value addition by smelting companies.

ZIMASCO was forced to close operations in 2008 when its ferrochrome supplies were affected by the global financial crisis. The company however resumed operations the following year when the trading environment improved.

Previously known as African Chrome Mines, Zimasco started operating in 1926 as an exporter of chromite ore. In 1962, it started its first smelting operation and was re-named Windsor Ferro-Alloys. The company was purchased by Union Carbide Corporation and expansion of the smelting operations started in earnest.

Between 1965 and 1972, furnaces I, II, III and IV, which today make up Kwekwe’s West Plant, were installed. East Plant, comprising Furnaces V and VI was built between 1976 and 1980 and the two furnaces were commissioned in 1981 and 1984 respectively.

In 1980, ZIMASCO, which held all the Zimbabwean assets of Union Carbide was incorporated. In 1994, Union Carbide completed a sales and management agreement whereby an experienced team of managers was appointed to run the operations. In 1995, a new holding company, Zimasco Consolidated Enterprises (ZCE) was set up in Mauritius and the Zimbabwe company officially changed its name from Union Carbide Zimbabwe (Pvt) Ltd to ZIMASCO Holdings (Pvt) Ltd.

In December 2007, Sinosteel Corporation of China purchased a controlling stake in ZIMASCO.

ZIMASCO has chromite mining locations in Shurugwi, Guinea Fowl, Lalapanzi, Mutorashanga and tributor operations along the Great Dyke of Zimbabwe.

The chromite ore is mined and transported to Kwekwe where it is smelted in combination with reductants and fluxes to produce high carbon ferrochrome alloy.

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