7 February 2018

Zimbabwe: ACF Lines Up $100m Investment

African Chrome Fields (ACF), which has invested more than $220 million in chrome mining along the country's mineral-rich Great Dyke, is lining up an additional $100 million investment in gold mining, steel, diamond beneficiation and the pharmaceutical industry, as it seeks to diversify its local business, it has been learnt.

An estimated $50 million will be spent on gold mining, while $30 million and about $10 million will be reserved for the pharmaceutical industry and diamond sector, respectively. Speaking to The Herald Business here yesterday, ACF national projects liaison officer Mr Ashruf Kaka said the company would also consolidate its investments in chrome mining.

Most notably, its venture into the pharmaceutical sector, which is expected to manufacture generic drugs, will be in partnership with Indian-based giant, Cipla. The 83-year-old pharmaceutical and biotechnology firm has an annual turnover of US$2,2 billion.

"Each one (of the new projects) will be different. The gold industry - that one will be assessed on its own merits, but that should be in the region of about $50 million. I think in the pharmaceutical industry that would probably be about $30 million, and in the diamond industry that would probably be in the region of $5 million to $10 million.

"But all of those projects are subject to feasibility and all of that. The pharmaceutical industry is something that we are targeting with Cipla from India so that we have generic medicine at a fraction of the cost that normal medication costs. But in the foreseeable future, I think outside the chrome industry, we are looking at another $100 million," said Mr Kaka.

"We don't want to be in the diamond sector insofar as diamond mining is concerned, we only want to deal in the diamond industry to the extent of beneficiation and value addition. So, if it comes to polishing and cutting and marketing, that's where we will land a hand, and that is where our value add is going to be," he said.

ACF says the planned projects were frustrated by former Mines Minister Walter Chidhakwa. However, the company believes that the new political administration will be able to facilitate the multi-million-dollar projects, which might also include ventures in steel and property.

Mr Kaka said: "In the short term, we will obviously consolidate our chrome mining operations. We have plans that have been in place from before; some of those projects were, to some extent, thwarted by the last minister of mines, (Mr) Walter Chidhakwa. With the new minister in place, we are quite certain that all those impediments and hurdles that we had will be set aside and we can do the business as we should be doing it. Our trajectory of growth will remain in place.

"We will be putting up our aluminothermic plant. It is near completion and it will be operational in May or June of this year. Other aspects that we are looking at is diversification in a variety of different interests which stretches from operating assets in the gold industry, beneficiation in the diamond industry (polishing and cutting diamonds); we are going to be involved to some extent in agriculture."

ACF says the state-of the-art aluminothermic plant, which is used to process chrome, allows it to circumvent critical infrastructure such as the power lines in order to operate in one of the remote parts of the Midlands province.

It is believed that Government, which granted the chrome investment national project status, decided to grant the company a rebate on duty on fuel imports as a cheaper method of expeditiously facilitating the venture rather than embarking on a much more expensive project of investing in establishing supporting infrastructure for the site.

Currently, the project employs 1 100 people, including 30 experts from South Africa, and spans a 30-kilometre stretch of the mineral-rich Great Dyke.

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