ArcelorMittal: Zimbabwe Alloys targetedComment on this story
The biggest steel maker, ArcelorMittal, was considering an offer for Zimbabwe Alloys Chrome, an insolvent ferrochrome producer seeking investors, an insider said last week. ArcelorMittal officials would visit the company in the next two weeks and carry out a due diligence, said the person, who asked not to be identified. Zimbabwe Alloys’ chrome ore reserves made it of strategic interest to ArcelorMittal, the person said. Ferrochrome is used to produce stainless steel. An ArcelorMittal spokeswoman declined to comment. Zimbabwe Alloys, 85 percent owned by Benscore Investments, controls 40 percent of the country’s chrome reserves, the biggest after South Africa. Three local bidders failed to raise the cash to meet the requirements of audit firm Grant Thornton Camelsa, which was appointed to manage the company after it was placed under judicial management, the person said. Its finances were hurt by a government ban on exporting unprocessed chrome ore and falling ferrochrome prices. It has been struggling to raise $40 million (R414m) to rebuild three chrome smelting furnaces in Gweru, shut since 2008.
South Africa’s Metmar owns 13.1 percent of Zimbabwe Alloys, which was controlled by Anglo American until 2005. Zimbabwe faced “huge” external demand for chrome ore, renewing pressure on the government to relax an export ban, Mines Minister Walter Chidakwa said in March. – Bloomberg