Parrogate Zimbabwe plans to set up chrome smelters in Mhangura, at an estimated cost of $18 million, with potential to generate $40 million in export earnings annually, managing director Anirudh Ganediwal said.
The company has entered into an agreement with the Zimbabwe Mining Development Corporation to put a new plant at Alaska Copper Smelting Complex and related infrastructure, Mr Ganediwal told The Herald Business in an interview.
“The plant will have capacity of 2 500 tonnes of ferrochrome per month, which should generate, at the present market rate, about $40 million per year,” said Mr Ganediwal. Zimbabwe is the world’s second largest chrome producer after South Africa. The chrome smelting project will create about 400 jobs and bring back life in the mining town of Alaska town. Alaska Copper Mine shut down operations in the late 90’s following depletion the of copper deposits.
“We have engaged financial advisors who are busy working on financial close and by December, we should be in a position to have the financial closure done,” said Mr Ganediwal. “Once it is done, it should not take (us) more than nine months to put everything together.” Mr Ganediwal said Parrogate, which also has business interests in agro-processing, said investing in chrome smelting was in line with Government’s policy on mineral beneficiation.
There is huge upside potential in prices from processed chrome, compared to exporting raw product, which are grossly discounted on global markets. Ferrochrome prices currently average $1 300 per tonne compared to $90 per tonne for raw chrome, according to metal bulletin.
“We found that it was ideal to value add rather than export raw material, which is basically in line with the Government policy,” he said. “We also found it will also be a good idea to resuscitate operations at Alaska and create jobs (for the local community.”
The plant will initially rely on chrome ore from small scale miners in the surrounding areas such as Darwendale and Mutorashanga, but would later apply for own mineral claims from Government Over the years Zimasco, a unit owned China’s Sinosteel and ZimAlloys enjoyed monopoly of the chrome mining sector and owned over 80 percent of the mining claims.
Small scale miners participated in the chrome industry only as tributors to the two multinational companies. To ensure wider inclusion of indigenous players in the chrome sector the Government then directed that 50 percent of the claims held by the two companies to be released to other small scale players.
Zimasco ceded 22 000 hectares of land to the Government which has about 800 claims chrome ore producers are allowed to export excess chrome ore after satisfying the local demand.
Currently, Zimbabwe has three large chrome smelter owned by Zimasco, ZimAlloys and Afrochine.