Zimbabwe: Sinosteel to Bid for Higher Zimasco Stake

飞雪寒冰

SINOSTEEL Corporation, China's second largest iron ore trader, will now buy 73 percent of Zimasco Consolidated Enterprises Limited (ZCE), getting a stake larger than its initial target of 50 percent.

China's National Development and Reform Commission said in a statement this week that it had approved the acquisition of a 73 percent stake in Zimasco, owner of Zimbabwe's biggest ferrochrome producer,

Sinosteel announced in September it had agreed to a deal with Zimasco to invest in ferrochrome mines and smelters.

Sinosteel, primarily into steel trading, is expanding into ferroalloys to feed China's strong demand for steel.

Zimasco, with an annual production capacity of 180,000 tons of ferrochrome, was once the fifth largest ferrochrome producer in the world.

飞雪寒冰

The Chinese firm said it had already signed an "initial agreement" with ZCE, the Mauritius based holding company of Zimasco, paving the way for an acquisition by the Chinese company. The deal, said Sinosteel, will benefit "the trade cooperation between the two countries, and help local economic development, create employment opportunities, and promote social stability in Zimbabwe".

The Financial Gazette reported in September Sinosteel had placed US$200 million to buy the 50 percent stake initially targeted.

Zimasco said at the time that an agreement, further to preliminary agreements signed between ZCE representatives and Sinosteel, had been reached. But it was suggested at the time that a deal might not be sealed immediately.

"It is important to note that the agreement is subject to certain conditions precedent, which may or may not be fulfilled," The Financial Gazette quoted the spokesman saying. "In addition, regulatory approvals from the authorities in China still have to be obtained. Therefore, until these processes have been completed, the shareholder portion of Zimasco Holdings (Pvt) Limited remains unchanged and all business will continue as usual."

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Sinosteel recently agreed to invest in a US$230 million ferrochrome mine and smelter project with South Africa's Samancor Limited