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FERROCHROME producer ZimAlloys requires between $24 million and $30 million to fix three of the firm's dilapidated furnaces to ramp production and turnaround its fortunes.
An Indian investor is carrying out due diligence on the company after which the investor is expected to present his offer to acquire controlling equity.
Judicial manager Mr Reggie Saruchera confirmed in an interview yesterday that the investor was still on the ground looking at the situation at the troubled company.
"We are waiting for the investor to complete the due diligence exercise. (Largely) we want funding to repair the furnaces. We are looking at $6 million to $10 million per furnace. So, we are looking at about $30 million for three furnaces," he said.
"As such, we are waiting for the investor (to complete the due diligence) and to give us his offer. We have not signed papers with the investor," Mr Saruchera said.
Earlier reports had indicated that the ferrochrome producer had short-listed four prospective investors, among them AfroChine Smelting, to acquire controlling stake.
Grant Thornton and Camelsa was reportedly evaluating the bids, having rejected proposals by local suitors for failure to demonstrate financial capacity to invest.
Operations at the firm were mothballed at the height of economic instability in 2008 after a plunge in global metal prices and may require up $150 million to revive.
ZimAlloys' finances were also hurt by a Government ban on export of unprocessed chrome ore and chrome fines as part of efforts to promote value addition.
Value addition and beneficiation is one of the four main clusters in Government's medium-term blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation.
Mines and Mining Development Minister Walter Chidhakwa recently said there was huge external demand for unprocessed chrome, which has heightened calls to lift the ban.
Ferrochrome, made from smelting chrome ore, is widely used in the manufacturing of stainless steel. ZimAlloys controls 40 percent of local chrome reserves.
The ferrochrome producer is controlled 85 percent by businessman and Interfin founder Mr Farai Rwodzi's Benscore Investment. The firm requires huge investment to bring it back to life, including the need to replace its antiquated technology.
South Africa's Metmar held about 13,1 percent shareholding in ZimAlloys, which was controlled by Anglo American Plc until 2005 when the firm offloaded its interest.
The company last year resorted to sifting the dumps for sale just to secure funds to support operations. A South African firm once considered a rescue package for ZimAlloys.
Zimbabwe's ferrochrome production sector is dominated by four main players, with ZIMASCO and ZimAlloys the biggest and oldest producers.
The other two smaller producers who are in the country are Maranatha Ferrochrome and Oliken Ferroalloys.
Ninety-five percent of chromium resources are geographically concentrated in southern Africa and Zimbabwe is estimated to host over 80 percent of the world's resources of metallurgical1 quality chromite, mainly on the mineral rich Great Dyke.
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- [Editor:sunzhichao]
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