Zimbabwe Alloys ordered to cede 50 percent its claims to government


The government has ordered ferrochrome producer Zimbabwe Alloys to hand over half of its vast mining claims or risk having them appropriated, saying it wants to open the sector up to new miners.

The company was given until the close of business yesterday to comply.

ZimAlloys – until 2003 an Anglo American subsidiary – and the Chinese-owned Zimasco jointly control about 80 percent of Zimbabwe’s chrome ore claims, mostly found along the Great Dyke.

A consortium of local businessmen including banker Farai Rwodzi and Savanna Tobacco founder Adam Molai purchased ZimAlloys from Anglo in 2006. The firm was placed under judicial management in 2013 as weak commodity prices and lack of capital affected the business’ viability.

In April, Zimasco, the bigger of the two firms, announced it had surrendered 22 700 hectares out of its total claims covering 45 900 hectares.

ZimAlloys has a total of 39 175 hectares.

Government has, since last year, pressed the two miners to release some ground. Mines Minister Walter Chidhakwa said the two firms would not be allowed to export chrome ore until they ceded some land, despite a July 2015 government policy shift which lifted a ban on the raw ore exports.

On May 30 2016, the Mines Ministry wrote to ZimAlloys, giving the company up to June 7 to hand over half its claims.

“Please be advised that the government, through the Ministry of Mines and Mining Development, reiterates its position that it will be acquiring 50 percent of all mining claims held by ZimAlloys in line with government policy to increase the number of players in the chrome mining industry,” reads part of the letter, signed by the ministry’s permanent secretary Francis Gudyanga.

“Despite repeated efforts to have a common understanding, you have remained evasive with regards to this matter. Therefore, we will be giving you to the 7th of June 2016 to present the claims…or risk the claims being acquired at our discretion and without notice.”

ZimAlloys officials were not immediately available for comment, but in earlier correspondence with the Ministry, the firm had offered 20 percent of its total hectarage, holding 53 percent of its lumpy chrome resource. The company also wanted some compensation for some work done to develop some claims, as well as some immovable equipment on underground claims.

Government rejected this proposal outright.-The Source


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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