6 December 2012

Zimbabwe: Dorowa Poised to Bounce Back

DOROWA Minerals, the country's sole phosphate producer, has increased its production to 50 percent following part payment of the money that it is owed by Government and other clients. In an interview, Chemplex Corporation group chief executive Mr Misheck Kachere said Government had since paid them US$6 million resulting in the reduction of its debt from US$23 million to US$17 million.

Dorowa scaled down production to 30 percent of their operational capacity two months ago following slow uptake of the 20 000 tonnes of phosphate that had been produced.

Mr Kachere said the stocks they had built had, however, reduced to about 13 000 tonnes.

He said this meant they still had to produce less than normal quantities of phosphate in order to avoid stocks building up in the absence of buyers.

"At maximum, we produce 12 000 tonnes but as we have just started operating at 50 percent capacity, this month we hope to produce 8 000 tonnes of phosphate," he said.

Chemplex are on record saying that they are experiencing cash flow challenges that have been exacerbated by numerous debts on their account.

Last month Chemplex said their major challenge was that their customers including Government owed them money and they were not able to access lines of credit as banks were denying them credit facilities.

This was because Chemplex already owed these banks a lot of money.

Mr Kachere said for the past month they had been working on collecting money owed to them by their customers so as to be able to buy other inputs needed for fertiliser production such as sulphuric acid.

"Fertiliser and seed companies owe us US$17 million and US$13 million respectively, and if we can collect some of that money, then our operations will back to normal," he said.

He reiterated the need to export their produce in order to supplement their cash flow.

The financial problems have not only affected Dorowa Mine and Zimphos but it had spread to other companies under Chemplex Corporation such as Sable Chemicals and Zimbabwe Fertiliser Company.

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