The Sunday News
Munyaradzi Musiiwa, Midlands Correspondent
THE construction of new blast furnaces at Gweru-based ferrochrome producer, Zimbabwe Alloys (ZimAlloys) have been slowed down by the Covid-19 pandemic as the suppliers of equipment in South Africa slowed down production.
In an interview, Zim Alloys judicial manager Mr Bulisa Mbano, however, said good times were beckoning for one of the country’s largest ferrochrome although the construction of the blast furnace has been affected by Covid-19.
“The construction of our blast furnace has been affected by the coronavirus pandemic. Our suppliers in South Africa were also affected by the pandemic and some of the equipment we wanted could not get here. Other than that ZimAlloys is reincarnating and we hope that once the pandemic is over or if the situation improves the construction will be completed,” he said.
Mr Mbano said ZimAlloys had cancelled the deal with Indian Investor Balasore Alloys Limited (BAL) after it failed to honour its commitment within the agreed timeframe. He said the court had ruled in the favour of ZimAlloys after a protracted fight with Balasore.
BAL had approached the High Court in an attempt to stop Grant Thornton International, ZimAlloys judicial managers, from terminating the contract after it allegedly failed to honour its commitment. The High Court granted an interdict in favour of BAL obstructing Grant Thornton International from looking for other prospective investors for the Gweru-based ferrochrome producer.
However, Grant Thornton challenged the High Court decision at the Supreme Court. This has slowed progress on the resuscitation at the giant chrome smelter which had projected to have completed reconstructing its blast furnaces by last month.
BAL had made an undertaking to inject $100 million into ZimAlloys and to settle the company’s $50 million debt.
The Indian-based company was supposed to release part of the money in January this year but started backtracking on the agreements prompting Grant Thornton to contemplate terminating the deal.
BAL then approached the High Court seeking to stop Grant Thornton from courting another investor. Grant Thornton International argued that they had resolved to terminate the investment deal after the investor delayed in disbursing the agreed amount within the stipulated time which in turn slowed down the revival of the ferrochrome producer.
Zim Alloys, which used to employ more than 5 000 people, is working on at their dump which is inclusive of one commissioned in 2013 in a partnership with a Chinese firm, JinAn in a deal worth about US$2,3 million.
Benscore, which is owned by business mogul Mr Farai Rwodzi, acquired ZimAlloys from Anglo-American Company in 2005 before downscaling production and switching off its blast furnaces and started processing its dumps.
The former Anglo-American Plc ferrochrome producer which stopped operations in 2008 was placed under provisional judicial management on July 24, 2014. The company was then put under final judicial management in November the same year after the ferrochrome producer’s debt had risen.
However, bad debt-buying company, Zimbabwe Asset Management Company in 2016 agreed to take over US$21 million worth of the group’s non-performing loans which are sitting with a number of local financial institutions in a bid to clean the company’s balance sheet.
ZimAlloys has a total of 39 175 hectares. The company together with Zimasco jointly controlled about 80 percent of Zimbabwe’s chrome ore claims, mostly found along the Great Dyke.