April 2 (Bloomberg) -- Sinosteel’s Zimbabwe unit, Zimasco (Pvt) Ltd., has fired almost all of its managers and workers and closed supply stores at its Mutorashanga mine after equipment meant to refine chrome ore fines failed to work, three managers at the operation said.
China’s Jilin Houyan and Gold Horizon companies installed a sinter plant and a slag gravity separation plant at an estimated cost of about $25 million, according to a company statement in February. The equipment, installed at the company’s refinery in the central town of Kwekwe failed to process chrome fines dug at Mutorashanga, said the managers, who asked not to be identified because the information hasn’t been made public.
Zimasco operates a ferrochrome refinery in Kwekwe as well as mines along the country’s Great Dyke mountain range stretching from Lalapanzi and Shurugwi in the south to Mutorashanga in the north. The company has the capacity to produce 180,000 metric tons of high-carbon ferrochrome a year, or 1.2 percent of global production, according to its website. It doesn’t say how much of the mineral it’s producing currently. Chrome ore is smelted into ferrochrome, used to make stainless steel rust-resistant.
“The situation on the North Dyke is disturbing and we’re investigating ways of resuscitating operations,” Walter Chidakwa, the country’s mines minister, said in a telephone interview from the capital, Harare, on March 25, declining to comment further.
Zimbabwe has the world’s second biggest chrome reserves after South Africa.
Mutorashanga mine employed more than 700 people in 1994, according to the managers. Mining will now be conducted by small-scale contractors, known as tributors, who are paid by metric ton at market prices, the managers said. The latest round of cuts brings to more than 500 the number of jobs that have been eliminated over the last two years, the managers said.
Clara Sadomba, Zimasco’s general manager for marketing, requested e-mailed queries, acknowledged their receipt and said she would reply but did not. Sinosteel spokeswoman Zhang Zhixia didn’t answer phone calls made to her office in Beijing.
Chrome ore fines are a powdery form of the mineral dug from shafts and the surface on the Dyke. The company’s smelter, in the midlands town of Kwekwe, is better suited to smelting ore in the form of rock, known as lumpy chrome.
A Zimasco manager in Mutorashanga, fired last week and given a severance package of about $20,000, or about seven months’ pay, said the equipment installed in Kwekwe specifically to refine ore from the mine had failed to process fines mined at Mutorashanga efficiently.
Innocent Mavingha, who has been digging the mineral on contract for Zimasco for six weeks, said fuel, equipment and explosives would now have to be bought in Harare, 100 kilometers (60 miles) south of the mining town, because the mine stories have been closed.
Zimasco, which once belonged to Danbury, Connecticut-based Union Carbide, now a unit of Midland, Michigan-based Dow Chemicals Inc, has mined in Mutorashanga since about 1910. The company, sold to local managers in 1994, was bought by China’s Sinosteel in 2007, according to Zimasco’s Website.
The company dug for chrome ore alongside Zimbabwe Alloys Ltd., once owned by Anglo American Plc, which ceased mining operations last year.
“Now that Zimbabwe Alloys and Zimasco aren’t operating in the district, we’ve seen poverty and crime go through the roof,” said Last Gambaya, a small shop-owner operating near a village that previously housed Zimasco’s lower-paid mine workers. The village is now occupied by contractors and their families, many living on less than $45 a month, Gambaya said.
Zimbabwe’s Chamber of Mines president, Alex Mhembere, said the organization, which represents most mining companies in the country, doesn’t comment on individual companies.
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