Mining ZimbabweLatest Mining News, Policy and Industry Updates

Gweru-based ferrochrome producer, ZimAlloys has exited receivership after clearing its foreign and domestic debt.

ZimAlloys is now under Kuvimba Mining House, which is controlled by the Government of Zimbabwe.

ZimAlloys has been under judicial management since 2013. Grant Thornton was the judicial manager.

Buliso Mbano of Grant Thornton confirmed that the advisory firm handed control of ZimAlloys back to management.

“On May 26, 2021, the High Court of Zimbabwe granted an order to remove Zimbabwe Alloys and Zimbabwe Alloys Chrome from judicial management. The new board and management of ZimAlloys have since assumed management control over the affairs of the companies,” Mbano said.

ZimAlloys has been working on its dump which is inclusive of one commissioned in 2013 in a partnership with a Chinese firm, Jinan in a deal worth about US$2.3m.

The ferrochrome miner was also looking at initiatives to secure funding for refurbishment of its furnaces at the Gweru plant. This initiative was to see the miner engaging its customers and international financiers in raising funding which was expected to run into millions.

Benscore, a company owned by businessman Farai Rwodzi, acquired ZimAlloys from Anglo-American Company in 2005 before downscaling production and switching off its blast furnaces and started processing its dumps.

The company ceased operations in 2008 and was placed under provisional judicial management in July 2014. The company was then put under final judicial management in November the same year after the ferrochrome producer’s debt had risen to alarming levels.

However, bad debt-buying company, Zimbabwe Asset Management Company in 2016 agreed to take over US$21m worth of the group’s nonperforming loans which were sitting with a number of local financial institutions in a bid to clean the company’s balance sheet.

ZimAlloys together with Zimasco jointly controls the majority of Zimbabwe’s chrome ore claims, mostly found along the Great Dyke.

ZimAlloys has since ceded part of its ferrochrome reserves to government as part of the ferrochrome producer’s response to a directive given by government which ordered the country’s two ferrochrome giants, Zimasco and ZimAlloys to cede part of their chrome claims.

Initially Landela, a company linked to business tycoon, Kuda Tagwirei, wanted to take over ZimAlloys. But, the takeover of ZimAlloys by Landela was stalled after an appeal to the Supreme Court by Indian Investor Balasore frustrated the acquisition process. ZimAlloys, however, cancelled the US$100m Balasore deal after the Indian investor failed to honour its commitment within the agreed timeframe.

It is understood that the new investors, Kuvimba Mining House, is expediting the revival of ZimAlloys.

Business Times

LAFARGE Cement Zimbabwe says it continues to implement its US$25 million investment programme which will see the company completing the construction of a vertical cement mill (VCM) early next year.

As part of the US$25 million capital expenditure initiative, the cement producer in April this year launched its US$2,8 million Dry Mortars (DMO) project, a project expected to improve the firm’s manufacturing capacity of dry mortar products from 7 000 tonnes to 100 000 tonnes per annum.

At present, aggregate national demand for dry mortars is 100 000 tonnes, including imports from the region.

With the new plant, Lafarge is now able to meet the national demand and contribute to the country through import substitution, and thus saving millions in foreign currency.

The firm said the US$25 million capital expenditure project is a three-pronged investment plan now in its final phase of implementation.

This follows the successful installation of alternative power infrastructure in 2019 and the successful completion of the automated Dry Mortars Plant.

“The business continues with the implementation of the previously announced US$25 million capital expansion programme.

“The third investment project is the installation of the VCM, earmarked to double cement milling capacity.

“The supply contract was signed in August 2020 and the manufacturing of the plant commenced the following month,” said the company in a statement accompanying financial results for the year ended December 31, 2020.

“Civil works for the VCM have since started and expected completion date for the project is February 2022.”

In the outlook, Lafarge said the protracted impact of the Covid-19 pandemic on the business environment is anticipated to remain for the greater part of the year, given that 2021 began with yet another Covid-19-induced lockdown.

The firm, which is a subsidiary of Switzerland-based, Lafarge-Holcim Group, said the pandemic accelerated a number of trends globally that have also been seen in the Zimbabwean market.

In this context, the cement producer said it will continue to adapt its business strategy so as to thrive in the changing environment.

During the year under review, volumes in the Dry Mortars business grew by 115 percent compared to the prior year.

“This is attributed to the relaunch of the Supagrow and SupaFix range backed by active market sensitisation of the products which has led to wider product adoption.

“The gross profit margins grew by 12,4 percent to 60,6 percent (53,9 percent: 2019).

“The recognition and realisation of the RBZ (Reserve Bank of Zimbabwe) instruments improved the company’s overall operating costs through reduction of foreign currency exchange losses ZWL$336 million (2019: ZWL$3,5 billion),” it said.

A combination of revenue growth, reduced costs and reduction in foreign exchange losses resulted in the company turning an operating profit of $1,9 billion compared to prior year loss of $2,7 billion.

The firm’s net monetary position during the year under review remained favourable in inflation terms which resulted in an increase in the net monetary gain to $406 million (2019: $759 million) culminating in a profit for the year of $3,1 billion (2019: loss $3,5 billion). 

The Chronicle

A 22-year-old Masvingo man died after he fell into a disused shaft at Wanderer Mine in Shurugwi Saturday.

The deceased, Tinashe Makusha of Hwede Village under Chief Zimuto in Masvingo was walking from Vital Tuckshop in Shurugwi when he slipped and fell into a shaft about 60 meters deep.

Midlands province police spokesperson Emmanuel Mahoko confirmed the tragedy.

“Two mineworkers who were in another shaft heard the noise and suspected that a neighbouring mine was collapsing,” Midlands province police spokesperson Emmanuel Mahoko told NewZimbabwe.com.

“They later checked and discovered Makusha’s body at the bottom of the shaft. The matter was reported to the police who attended the scene and retrieved the body,” Mahoko said.

He said according to mining regulations, miners are required to rehabilitate or cover disused shafts and also fence off their working areas, tunnels, and shafts to guard against people and animals falling in.

“On the other hand, the public should report whenever they discover dangerous shafts to the Mines Ministry for corrective measures to be put in place. People should also desist from entering disused mines as they may be affected by dangerous gases,” Mahoko said.

Gold-rich Shurugwi district is littered with unprotected shafts left open by illegal miners after panning for the precious mineral in the area.