Sinosteel snaps up 67% in Zimbabwe ferrochrome producer

Updated: 2007-12-21 09:17

HARARE -- A Chinese company, Sinosteel Corporation, has acquired 67 percent stake in Zimbabwe's leading ferrochrome producer and exporter Zimasco Holdings for an undisclosed amount, becoming the majority shareholder, The Herald reported on Thursday.

The deal is yet another show of foreign investors' confidence in the country's economy despite the current challenges and misconceptions about the Zimbabwean government's indigenisation policy, the newspaper said.

Although no figures were mentioned, the deal is worth millions in US dollars, The Herald said.

"The transaction closed on December 13, and Sinosteel has become the controlling shareholder of Zimasco Consolidated Enterprises," a Zimasco Holdings spokesperson was quoted as saying.

Zimasco Consolidated Enterprises is the parent company of Zimasco Holdings, while Sinosteel has 76 subsidiaries under its umbrella, 53 of them in China and 23 dotted around the world.

The core business of the Zimbabwe company is developing, processing, trading and logistics of metallurgical mineral resources and related engineering technical services and equipment manufacture.

Under the deal, Sinosteel will retain the current Zimasco staff and the existing management in both the company's mines and the smelting plant.

The Zimasco spokesperson added that Sinosteel would market the output through the appropriate channels, with due regard to existing contractual obligations, the present customer base and the need to maximize company profitability.

Zimasco Holdings is the fifth largest high carbonated ferrochrome producer in the world. It used to produce 210,000 tons of high-carbon ferrochrome per year, nearly all of it along the mineral-rich Great Dyke, accounting for 4 percent of global ferrochrome production.

Zimasco has also the world's second largest reserves of chrome, after South Africa. It was formerly owned by Union Carbide Corporation, now part of Dow Chemicals Corp.

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