Zimbabwe’s sole exporter of semi-processed iron, NJZ Resources Africa, is planning to restart its Buchwa operations by June this year with an eye on the Indian market after getting regulatory approval and despite subdued prices on the international market, an official said today.
NJZ, a company owned by Hong Kong investors, suspended operations in the third quarter of last year due to delays in receiving an export permit.
In 2012, NJZ won the tender to rehabilitate iron ore dumps left when the Buchwa Iron Mining Company-owned (BIMCO) mine ceased operations over 20 years ago. The tender also gave the company rights to process and export the iron ore, estimated at five million tonnes, from the site.
Managing director Tinashe Kasere said that the company is negotiating with Indian authorities for reentry into the market after the Asian powerhouse banned imports from Zimbabwe on environmental grounds.
He said NJZ has also engaged state-owned locomotive operator NRZ and its Mozambique counterpart to lower transport costs in the face of weakening iron prices.
The price of iron ore fell by 47 percent in 2014 and is currently trending at around $74 per tonne from $131 at the start of the year, chiefly because Rio Tinto’s Australian unit ramped up production and flooded the market, leading to prices weakening.
Kasere said the company was forced to look for alternative markets after demand from China also dropped as its economy softened.
“We are trying to rationalise our operations in line with the current prices on the global market and in parity with international competition and we have engaged key stakeholders along that value chain. Key among them are NRZ and CFM of Maputo who have pledged to keep Zimbabwe alive on the international market,” said Kasere.
Commenting on the $1.2 million quarry near Zvishavane that was commissioned late last year, Kasere said the company is currently awaiting approval from the country’s environmental agency and hopes to start operations later this month.
He said the operation has capacity to produce 30 000 tonnes of construction stones per month on two shifts driven by demand from surrounding mining towns.
“We are targeting the booming construction sector around the Shurugwi and Zvishavane areas. There has been massive growth driven by mining activity and I think it’s a viable project,” he said, adding that Buchwa remained the company’s main project despite an unfavourable environment.- The Source
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