Global shocks frustrate Zimasco operations
FERROCHROME producer, Zimasco Private Limited, has temporarily switched off its West Plant at the Kwekwe-situated smelter amid viability challenges owing to a sharp decrease in global prices of the product.
Zimasco took over the plant in 2020 following the expiry of a five-year lease agreement
between the company and South African company, Portnex International. It switched on
the furnaces in November last year creating more than 200 jobs.
The closure of the two furnace-plant means that only the Easten Plant, which also has
two furnaces, remains operational.
Responding to emailed questions, Zimasco spokesperson, Ms Clara Sadomba, said the
company was facing viability challenges due to the Russia-Ukraine war and the
significant slowdown in economic growth in Mainland China, among other challenges.
“The global market for ferrochrome ore has faced a number of challenges during 2022.
The overall global economy has slowed thereby reducing demand of prices throughout
the year with August and September experiencing sharp decreases in prices at a time that
production and logistics costs have increased,” she said.
Ms Sadomba said the company had to take painful measures in a bid to arrest the
untenable situation hence scaling down operations by 50 percent.
“These circumstances have resulted in viability challenges for Zimasco’s ferrochrome
production at this time and it has become necessary for the organisation to take certain
measures to arrest this situation,” she said.
“The company has therefore taken the decision to temporarily scale down the smelting
operations by 50 percent of current capacity with effect from 2 September 2022 with two
of our four furnaces at Kwekwe Smelter being switched off.”
Ms Sadomba said the company will continue monitoring developments in the market and
remains ready to respond swiftly should a change in the prevailing circumstances
warrant it.
She said Zimasco will, however, continue with its mining operations including the
production of chromite ore concentrates at full capacity to support the build-up of
strategic ore stocks ahead of the rainy season and export sales.
Zimasco
The company will also remain committed to its ferrochrome expansion programme at
Kwekwe, which is expected to boost capacity.
Zimasco commenced its US$100 million ferrochrome expansion project at Kwekwe this
year, which will see its smelting capacity double from 144 000 metric tons of
ferrochrome per annum to 288 000 metric tons per annum by 2023.
“The Ferrochrome Expansion Project consists of the construction of two refurbishment
and modernisation of two furnaces at West Plant,” said Ms Sadomba.
“We are pleased to advise that this critical value addition and beneficiation project
remains on course and will be completed as planned early in 2023 in support of
Zimasco’s medium to long-term strategy and the Zimbabwe Government ‘s thrust to
grow the Mining Industry into a US$12 billion mining industry by 2023.”- The Chronicle
