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| author/source:News24 (SA) |
| published:Fri 28-Dec-2007 |
| posted on this site:Fri 28-Dec-2007 |
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| Article Type : News |
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| The Chinese company had originally targeted an initial stake of 50%, but quickly increased its stake to 67% and then 73% before gaining its current holding |
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Sherilee Bridge
Johannesburg - China's leading steel trader, Sinosteel, has completed the acquisition of a 92% stake in Zimbabwe Mining and Smelting Company (Zimasco), the world's fifth-largest ferrochrome producer. Sinosteel also retains the option to buy the remaining 8% in Zimasco over the next two-and-a-half years. The Chinese company had originally targeted an initial stake of 50% in Zimasco, which has an annual production capacity of 180 000 tons of ferrochrome, but quickly increased its stake to 67% and then 73% before gaining its current holding. Zimbabwe's financial weekly, the Financial Gazette, reported in September that Sinosteel had bought its initial 50% stake in Zimasco for $200m. Sinosteel is expanding into ferroalloys to feed China's strong demand for steel. It has successfully established iron ore and chrome ore resource bases in Australia and South Africa.
The Chinese firm recently agreed to invest in a $230m ferrochrome mine and smelter project with South Africa's Samancor. Zimbabwe hosts the world's second-largest reserves of chrome after South Africa. The investment comes just months after Zimbabwe's parliament called for more Chinese investment in the country's mining sector. Mining generates half of Zimbabwe's export revenue and it is the only sector that still attracts foreign investment after the collapse of the primary agricultural sector and the downward-spiralling Zimbabwean economy. In April 2007 Zimbabwe's parliament said some Western companies with mining claims in Zimbabwe were not exploiting them and it called on Chinese investors to consider fully exploiting the country's mineral riches. It also suggested that Zimbabwe would prefer Chinese investors to Western ones, because their investment terms were normally "mutually beneficial". Zimbabwe has reserves of coal, chromium, gold, nickel, uranium and platinum, among other metals. Chinese firms have been increasing their investment in Africa's natural resources to help feed its booming economy.
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