THE Chinese majority owner of chrome miner and smelter, ZIMASCO has approached the government for an exemption from the country’s economic empowerment laws, a deputy minister has confirmed.
Under the country’s economic empowerment programme, foreign companies are now required by law to transfer control of 51 per cent of their Zimbabwe operations to locals.
But government officials have previously indicated that investors from friendly countries such as China could be exempted from the requirement.
Deputy indigenisation minister Tongai Matutu recently told Parliament that Zimasco had submitted its plans for compliance with the law.
“The position is that ZIMASCO has submitted its provisional indigenisation and economic empowerment proposal, that proposal has been under consideration and there have been negotiations going on about compliance issues,” he said.
“However, the management of ZIMASCO has been arguing that since they are Chinese, they have been actually friends of Zimbabwe and therefore they should be exempted. They have also argued that they have got a five-year development plan which they believe should not be disturbed by bringing on board a new investor.
“But nevertheless, I think the negotiations are going on and I would like to believe that a solution will be agreed upon and they will comply.”
Sinosteel Corporation became the majority shareholder in Zimasco after purchasing 92% of Zimasco Consolidated Enterprises (ZCE) in 2007. But various share purchases since then have seen Sinosteel reduce its interest to 73%.
Sinosteel recently injected US$35 million into the company for the refurbishment of one of the smelters at the Kwekwe plant.
"The investment from Sino Steel, which owns 73 percent of the company, will be used to rebuild furnace number two was received and work is currently underway,” Zimasco’s Marketing and Administration General Manager, Clara Sadomba said.
"The restoration of the furnace will help increase output of high carbon ferrochrome from the current levels of 170 000 metric tonnes per annum to 230 000 metric tonnes per annum."
Zimasco operates smelters in Kwekwe and Chrome mines in the nearby town of Shurugwi.