Business Reporter
Former Anglo-American Plc ferrochrome producer, Zimbabwe Alloys has closed its head office in Harare in a cost cutting exercise that will leave its management working on part time basis, sources close to the developments said.
The move comes at a time when the company is in negotiations with two investors who have expressed interest in the company. ZimAlloys judicial manager Mr Reggie Saruchera confirmed that the company was closing operations in Harare and moving to Gweru where the main operations are located.
“The motive behind movement to Gweru is to minimise costs on the back of the biting liquidity crunch. At the moment we are focusing on the processing of dumps while waiting for two investors who have expressed interest in the company,” said Mr Saruchera.
The company has pinned its revival hope on processing dumps at its Gweru plant after signing an agreement with a Chinese mining company, Jinan which will provide technical assistance on the project.
“The management will now be working on a part and need basis while senior management would looking at where the other management would be fitted. We are struggling to secure investors and we have not been doing much on the dumps due to the availability of obsolete machinery to do the job,” said the sources.
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 due to poor performance attributed to the closure of its four furnaces, poor global metal prices and escalating costs.
The sources say the company has managed to realise encouraging results in dump processing which is supposed to see the company processing the estimated 4 million tonnes of ore. Machinery has been a big let-down. Jinan, a Chinese company has gone into partnership with ZimAlloys and they are jointly processing the dumps.
“This partnership deal is set to ease the company’s cash woes, with one of the partnerships expected to about $ 2,3 million and the dump processing project is expected to be complete in the next four years,” said the sources.
The firm ceased operations in 2008 and was placed under final judicial management on November 27 last year after it was placed under provisional judicial management on July 24 the same after the ferrochrome producer’s debt rose to alarming levels. Tests were conducted the Chinese counterparts and the metal recovery results were encouraging.
The company is focusing on strategies to build its capacity to beneficiate rather than export chrome ore in line with Government policy.
Chinese companies have been heavily investing in Ferrochrome for the past two years and recently Afrochine Africa completed the construction of ferrochrome smelter plant in Selous for US$25million.
Frantic efforts are being made towards the upgrade of Lalapanzi plant near Gweru, a move that will see the company increasing production to 7 000 tonnes per month.