Zimbabwe News and Internet Radio

Mittal family firm snaps up Zim Alloys

By John Kachembere

One of India’s leading ferrochrome manufacturers, Balasore Alloys, controlled by the Mittal family, is on the cusp of taking over chrome miner, Zimbabwe Alloys (Zim Alloys), with plans to inject nearly $100 million to revive the company.

Lakshmi Mittal
Lakshmi Mittal

The Mittal family’s flag-bearer, Lakshmi Mittal, is chairman and chief executive officer of ArcelorMittal, the world’s largest steelmaker.

Zim Alloys, a former subsidiary of Anglo American Corporation, was sold to a consortium of local businessmen, who included banker Farai Rwodzi and Pacific Cigarettes founder Adam Molai, in 2005 but soon ran into problems.

The ferrochrome producer was eventually placed under final judicial management in 2014 due to poor performance attributed to the closure of its four furnaces, poor commodity prices and escalating costs.

The firm, which is not currently engaged in mainstream mining and is only processing chrome from its dumps estimated at four million tonnes in 2015, was last year ordered by the government to surrender at least half of its claims.

Zim Alloys judicial manager Bulisa Mbano could neither deny nor confirm that they were concluding talks for Balasore’s takeover, citing confidentiality.

But people familiar with the matter said Balasore, owned by prominent businessman Lakshmi Mittal’s family, was on the verge of taking over Zimbabwe’s struggling ferrochrome producer.

“With about a third of its sales coming from outside of India and a customer base spread over nearly three dozen countries and with the latest acquisition of a 70 percent stake in Zim Alloys, Balasore is well on its way to becoming a major player in the global ferrochrome market,” a source said.

Balasore, formerly known as Ispat Alloys, is part of the diversified Ispat group of companies promoted by the Mittal family.

The company was incorporated in 1984 and is into the manufacturing of iron and iron intermediate products. It has seven furnaces in India with a total installed capacity of 78 MVA to produce 150 000 metric tonnes bulk ferroalloys per annum.

With multiple furnaces of different capacities, the company has the flexibility to produce different types of ferroalloys as per market dynamics.

Economic analysts said Balasore, which has captive mines in different locations like Chromite ore mines in Sukinda Valley in Orissa, was the ideal candidate for the acquisition of Zim Alloys, considering the Indian firm’s strategy to boost capacity through acquisition of idle capacities.
In the past few years, the company has entered into collaborations with Japan’s Nippon Denro Manufacturing Company, Danieli in Italy, Elkem in Norway and Finland’s Outokumpu.

The latest development also confirms Indian investors’ interest in Zimbabwe despite the recent retreat of Essar Africa Holdings from Ziscosteel, a derelict steelmaker which was once one of Africa’s largest integrated steelworks.

The African unit of India’s Essar Group in November 2011 agreed to buy 54 percent in the steel maker in a deal worth $750 million.

But the deal collapsed due to squabbles in government over ownership of mineral claims.
India’s ambassador to Zimbabwe, Rungsung Masakui, last week told The Financial Gazette that investors from the Asian subcontinent were seeing opportunities in Zimbabwe despite the country’s economic and cash crises.

“I see signs of excitement in the Indian business community. This year alone we have had five business delegations and their purpose was to seek joint ventures and collaborations, as well as to see for themselves what is obtaining in the country,” he said.

“But what I am telling Indian investors, in light of the current liquidity crunch, is that if they want to invest here, it should be long term and not short term because repatriation of funds is difficult at the moment,” he said.

Indian public sector companies like Indian Railway Construction Company, Rail India Technical & Economic Services, Water and Power Consultancy Services and Telecommunications India Limited had a successful history of engagement with Zimbabwe.

India also has strong presence in the pharmaceutical sector in Zimbabwe and Indian medicines are readily available on the local market, with Ranbaxy and lpca Labs having established business relations with the local health sector.

And another Indian pharmaceutical company, Shreya, at one time invested about $1 million in Zimbabwe’s largest pharmaceutical company, CAPS Holdings. Financial Gazette

  • Dzino pera here ngano dze economy ye Zimbabwe. Zvakambonzi ma Chaina auya hot hameno.

  • lol! really now?

  • Another Gupta family coming to loot in Southern Africa.

  • dakote

  • KUKAMBENA

  • 991

    Saka kuma Zimbabweans hakuna vanhu vane mari here ? , $100Mn hayizi mari yakawanda.

    Vanhu vagara mu diaspora 10 , 20 , 30 yrs , asi unowona vachitadza kubatsira nyika yavo , zvese zvese zvakutorwa nema forena.

    Kwanzi takamirira kuti mugabe ayende , pachasvika nguva iyoyo madhongi anenge amera nyanga , then modzoka musina chinhu misoro yachena. Kuyenda kwake hakuchinje chinhu.

    Makambani aya anofanira kutengwa nema Zimbabweans , zvicherwa zvosenzeswa mu Zimbabwe , zvigadzirwa zvobuda zvava nehuremu – financial value.

    Nyika irikuruza mari nekuti munoda ma shortcuts – minerals valued at $300Bn [ ++ ] in the last 20yrs – dzakangoraswa. Ma serufoni ese , 12Bn devices ‘ dzine ka nhengo mukati kaka gadzirwa nechicherwa chedu….the potential is hugemongous.

    Pane kuita poritiks , itai economics , zero loss.

  • These guyz mean business jus look at Acerlormittal south africa and you will see the benefits of having them to take over Zim Alloys

  • Is he also going to open a processing plant and market all finished products out of Zimbabwe because the ZANU PF leaders are going to take little money for bribe and this guy’s company will loot ore out straight to India leaving Zimbabwe dry. $100 million ain’t shit equipment and labor is already.

  • Still planning…………….!!”

  • dnt let them charos dnt pay and they racist

  • I second Amissi Maulana. Mittal has a diciplined approach to steel business. It was unfortunate that it was even sidelined on ZISCO only to find that the awarded company had to withdraw due to some technicalities. Main reason I will not speak but just to say I DON’T KNOW BUT I CARE BECAUSE IT FAILED THE LIVELYHOOD OF ZISCO AND OF MANY FAMILIES

  • Let’s hope the greedy ministers won’t block the deal again. At one point the president was told that Mittal was too big to deal with Zisco n I wonder if they are now small to take up investment in ZimAlloys