- March 27, 2020
- Posted in NEWS
Portnex has shut down its Zimasco Ferrochrome plant in Kwekwe after prices of the alloy fell to four-year lows on weak demand caused by the coronavirus outbreak.
The closure places at risk hundreds of jobs at one of the town’s largest employers, reflecting the local impact of a global health crisis that has disrupted economies around the world.
“The ferrochrome industry has been the most affected with ferrochrome prices coming down to shut-down levels, even lower than those of 2015. Responding to the above, most smelters have been put on care and maintenance, with Zimasco having announced its care and maintenance on the 25 March 2020. Portnex has already closed while Afrochine are operating below 50% of installed capacity,” the Chamber of Mines said.
Afrochine, a unit of Chinese stainless steel giant Tshingshan, is the largest producer, putting out 100 000 tonnes of ferrochrome at its Selous plant a year.
Apart from Afrochine, only Gweru’s Jin An is still in operation out of the country’s 13 producers, according to players in the industry.
Although Portnex officials were yet to respond to request for comment, newZWire understands from staff that they had been informed that they would continue to earn a fraction of their salaries.
China dominates global market for ferrochrome, which is the main ingredient in stainless steel production. China, like much of Europe and Asia, has suspended many steel mills due to the COVID19 outbreak. In Europe, many large stainless steel producers such as ArcelorMittal, Europe’s largest steelmaker, have halted production indefinitely.
This has driven prices to their lowest levels in years.
The coronavirus outbreak is only the latest crisis to hit Portnex operations. In December, operations were halted due to a dispute over power bills with ZESA. Electricity accounts for 29% of the production costs at the plant, while chrome ores account for 31%.
Portnex, a South African company, took over operations at Zimasco’s Western plant in 2015 on a five-year lease, which must be renewed this year. Portnex produces 200 tonnes of ferrochrome per day, taking in chrome ore from tributaries mining on Zimasco claims across the Midlands.