BENSCORE Investments, a consortium led by prominent banker Farai Rwodzi, has snapped up Zimbabwe Alloys Ltd (Zim-Alloys) for $90 billion from Anglo American Corporation Zimbabwe (AmZim).
The disposal of Zim-Alloys is in line with AmZim’s plans to leave the chrome industry. AmZim sold its 40% interest in Samancor Chrome earlier this year.
“The decision to sell Zim-Alloys is in line with Anglo American plc’s strategic intent to exit the chrome industry and follows the disposal of its 40% interest in Samancor Chrome earlier in 2005,” said AmZim spokesperson Ezra Kanganga in a joint statement with Benscore released yesterday.
The deal is however still subject to regulatory approval. As part of the deal conditions, Benscore Investments that also includes Adam Molai of Savanna Tobacco, will be expected to meet the financing obligation.
AmZim’s decision to dispose of its stake to the consortium is said to have come after it satisfied the deal requirements of representation of indigenous partners.
Benscore’s future plans for the chrome producer are to increase production. Kanganga added that the company had considered the issue of empowerment in the deal hence the awarding of the stake to a broad-based consortium.
“In line with earlier transactions involving AmZim’s Zimbabwean businesses, an important consideration throughout this process has been the continued facilitation of emerging businesses entering the Zimbabwean economic mainstream to the benefit of all stakeholders,” he said.
AmZim is planning to invest the proceeds of the sale in its new Unki Platinum Project in the Shurugwi area.
“The net proceeds available to AmZim will be applied to future mining projects in Zimbabwe including Platinum project,” Kanganga said.Zim-Alloys operates a ferrochromium smelter in Gweru, where capacity has been slashed significantly over the past few years as costs ran ahead of earnings.
Zimbabwe holds 25% of the world’s known chromium reserves, but output is under threat from a hostile exchange rate regime.
Charge chrome, the most popular grade, was last year fetching between US$0,68 and US$0,69 a pound in the European markets and between US$0,72 and US$0,73 a pound in the United States.