The Zimbabwe Mining and Smelting Company (ZIMASCO) has been placed under corporate rescue after businessman Shepherd Tundiya filed papers claiming the company owes over US$77 million to creditors.

Tundiya claims that ZIMASCO failed to honor a 2017 agreement with his company Avim, to source coke peas from South Mining in Hwange. Tundiya told the court:

Had ZIMASCO not breached the agreement, Avim would have delivered 288,000 tonnes of coke peas at US$270 per tonne between August 2, 2017, and August 1, 2023.

Tundiya claims Avim incurred damages of US$17.3 million from August 2017 to February 2019, and US$50.2 million from March 2019 to August 2023.

Court documents indicate ZIMASCO owes US$77 million, including debts to suppliers, ZIMRA, ZESA, and employees.

Tundiya argued that corporate rescue, not liquidation, was needed due to ZIMASCO’s refusal to settle debts.

The court appointed Wilson Manase as the corporate rescue practitioner, placing ZIMASCO under administration to prevent creditor lawsuits.

Tundiya proposed that ZIMASCO, owned by China’s Sinosteel, be handed to new investors. He said:

I am aware that there are potential investors targeting chrome mining due to the spike in demand. Investors with equity financing can be brought on board.

ZIMASCO’s corporate rescue comes as the company seeks to expand, with plans for new furnaces and a 100MW solar plant in Kwekwe.

It commissioned a new furnace in December 2023 and plans to redevelop its mining assets on the Great Dyke.

Despite producing 70,000 tonnes of ferrochrome annually, ZIMASCO has faced furnace shutdowns due to volatile ferrochrome prices and high power costs.

More: newZWire