Govt reads riot act on ZimAlloys; targets $300m in chrome exports
HARARE – MINISTER Of Mines, Walter Chidhakwa has read the riot Act on ferrochrome giant, ZimAlloys, threatening to invoke the Mines and Minerals Act for dragging the process of relinquishing part of its claims to Government.
Chidhakwa told Finx that he had already written to ZimAlloys informing the Gweru based company of Government’s intention.
Fellow chrome smelting company Zimasco that jointly owned 80 percent of chrome claims along the Great Dyke with Zimalloys ceded 50 percent of its claims in April last year, but the latter has been dragging the process citing shareholder consultations.
ZimAlloys is also reportedly holding on to the claims after a geological survey showed that the company’s claims had large deposits of chrome that are yet to be explored.
“When you talk to companies and present to them Government policy, they have different processes with which decisions are taken. ZimAlloys is under judicial management and there has also been a process of consultation with directors and shareholders,” said Chidhakwa.
Chidhakwa said Government would not hesitate to repossess the claims if ZimAlloys does not comply.
“I have said in the past that this policy is a government policy and it does not select between the two companies, both of them must comply with government policy. It’s safe to say that if they do not comply, we will activate the necessary provisions of the Mines and Minerals Act which enables us to repossess mining locations that have been abandoned, including the concessions that are in that mining location,” Chidhakwa said.
Chidhakwa urged ZimAlloys to act or risk losing more claims.
“So we have written to ZimAlloys, advising them that we are triggering the provision of the Act and they should act fast. We are not going back on that policy and ZimAlloys will comply,” said Chidhakwa.
Government last year ordered the two ferrochrome giants to cede chrome claims to allow new investors to explore the mineral and Zimasco ceded 21 270 hectares of claims for redistribution to indigenous chrome players.
Zimbabwe has the second largest chrome deposits in the world second to South Africa and the chrome sector is bound to turn the leaf in the wake of firming ferrochrome prices, buoyed by high demand from China.
The 50 percent claims repossessed by Government from Zimasco have already been awarded to smelters in Kwekwe and Gweru.
Five Zimasco smelters have been re-opened and an additional smelter at Afrochinen had been put up.
In Gweru, the JinAn smelter has also been earmarked for chrome processing, although there are reports of smelters running out of material.
Chidhakwa said since the lift on the ban of raw chrome exports in 2015, the chrome sector has been on the rebound recording marginal profits during the January to February period.
In January chrome exports were at $28 million, up from $7 million during the same period last year.
February exports were $42 million from $10 million during the same period last year. Chidhakwa said the chrome sector was poised to achieve the $300 million target for 2017.
“We are on target to reach $300 million for this year and we think that it will be better when we finish allocating the concessions of the chrome claims that we are repossessing from chrome companies,” said Chidhakwa.
Zimbabwe is anticipating to double chrome ore production this year to 550 000 tonnes from 284 943 tonnes last year.
Ferrochrome production is expected to generate 300 000 tonnes up from 149 000 tonnes