Ferrochrome producer Zimbabwe Alloys is looking for investors after it failed to secure a loan to refurbish its furnaces and retire debts, an official said on Monday. ZimAlloys this year applied for a US$60 million loan from the Global Emerging Markets (GEM) to pay off debts and reconstruct furnaces under the agreement that it would repay using proceeds from export of chrome ore.
The Government banned exports of raw chrome, which included concentrate and briquettes, as an initiative to promote value addition and boost revenues.
ZimAlloys production manager Mr Jabulani Chirasha said the company was looking for investors after it failed to access the US$60 million from GEM, which would have boosted production capacity to 70 percent following refurbishment of the three furnaces.
"Access to the loan from GEM was subject to Government lifting the ban on chrome ore exports.
"Our cash flow could not support operations, refurbishment and repaying of the loan in 12 months," he said.
"We are, however, looking for investors who can buy the stake so that we will be able to recapitalise.
"The mineral prices are currently very low as these commodities sometimes go up and down thereby affecting the industry," he added.
Mr Chirasha said the company was currently producing between 300 and 500 metric tonnes of metal and recovering revenue of close to half a million per month.
ZimAlloys ceased operations in 2008 due to lack of capital and resumed mining earlier this year as use of multiple currencies reduced production costs.
The company has one of the oldest chrome smelting plants in Africa, having been built in 1949.
Zimbabwe's chrome ore reserves are renowned for their high grade and are estimated at around 560 million tonnes (15 percent of global supply).
They are situated along the Great Dyke, a mineral patch stretching 530km.
Industry analysts say the failure by companies to attract financing, coupled with erratic power supplies, has hampered efforts by chrome producers to build a local refinery.