Sinosteel’s Zimbabwe mining unit, Zimasco, has drastically curbed its smelting capacity, due to a slump in ferrochrome and chrome ore prices amid a global economic slowdown.
Factors including Russia’s war in Ukraine and sluggish growth in China have led to an “untenable situation” for ferrochrome production, according to Clara Sadomba, a spokesperson for Zimasco.
“The company has therefore taken the decision to temporarily scale down the smelting operations by 50% of current capacity with effect from September 2,” she said. Two of the four smelters at the Kwekwe facility will be turned off.
Ferrochrome is an alloy used in the production of stainless steel. Prices declined sharply in August and September, while production and logistics costs have increased.
“The global market for ferrochrome ore has faced a number of challenges during 2022. The overall global economy has slowed down thereby reducing demand of prices throughout the year with August and September experiencing sharp decreases in prices at a time that production and logistics costs have increased,” she said.
Zimasco will monitor market developments and can respond quickly if circumstances change, Sadomba said. Its mining operations, including the production of chromite ore concentrates, will remain at full capacity to help build stockpiles.
Zimasco has two plants, each with two furnaces with a combined 144 000 tonnes-per-annum capacity. The miner started its US$100 million ferrochrome expansion project at Kwekwe this year, with the aim of doubling its smelting capacity by 2023.
“The Ferrochrome Expansion Project consists of the construction of two refurbishment and modernisation of two furnaces at West Plant,” said Sadomba.
Bloomberg (additional by newZWire)