KWEKWE-BASED Zimbabwe Mining and Smelting Company (Zimasco), the fourth largest ferrochrome producer in southern Africa, is unlikely to meet its export obligations after the company reduced p
roduction by half last month.
The company has ferrochrome supply contracts to Asian countries particularly Japan.
A Zimasco spokesperson confirmed to businessdigest that the company had shut down three of its six furnaces and would only resume normal operations after an analysis of the effects of the new monetary policy on its viability.
At the centre of the company’s problems is the foreign currency regime which sources say has impacted negatively on current operations.
“Three furnaces out of six have been closed down as an interim measure to conserve cash ahead of the publication of the latest monetary policy statement,” said Zimasco’s spokesperson in a statement.
She said the company was studying the monetary policy to see how best they could take advantage of the terms it offers. These terms include foreign currency retention for exporters and the rate on the auction floors.
Zimasco produces 220 000 tonnes of ferrochrome, the bulk of which is exported to Asian markets. There are fears that Zimasco might fail to service its export market, an area on which the mining and smelting company relies for viability.
The spokesperson however said the company would still meet its export orders even though they were operating at 50% of capacity.
“We shall service our markets from accumulated stocks and shipments are proceeding as normal,” said the spokesperson. It is reliably understood that the company has already begun analysing the recent RBZ monetary policy review with the view of resuming operations. The company on Wednesday said it had reopened one of its ferrochrome furnaces.
The company said it expected all furnaces to be fully operational in a fortnight.