Applebridge seeks $10m working capital
Michael Tome Business Reporter
APPLEBRIDGE Private Limited, the Special Purpose Vehicle established to facilitate chrome exports requires at least $10 million capital injection to acquire chrome ore from small scale miners’.
Part of the $10 million is earmarked towards construction of regional hubs in proximity to small scale miners, at which chrome ore is purchased to then make its way to export markets.
At the sidelines of a consultative meeting in Gweru for small scale chrome miners, Minerals Marketing Corporation of Zimbabwe deputy general manager Masimba Chandavengerwa remarked that Applebridge should be financially capacitated in order to be able to acquire chrome ore from small scale miners and export it when the market prices are profitable.
“Looking at tonnages around the country, it would be potent stimulus and astute price hedging for the industry if Applebridge gets $10 million to buy all the chrome from small scale miners, to then sell when global markets are right, or in some instances immediately after acquiring it.” said Mr Chandavengerwa.
This comes at the backdrop of the fall in chrome prices to $90 per tonne from $200 per tonne at the beginning of the year, attributable to high supply as Chinese and Southern African ports are currently holding about two million and one million tonnes of chrome ore respectively.
Also, this development has led local side marketers to buy chrome ore from small scale miners at prices below the current global market price. The MMCZ deputy general manager highlighted that, if financed, part of the capital will be directed to the construction of hubs that will be used to securely store the chrome (in times of low prices) positioning to then export at a later stage. Moreover, hubs would be of greater convenience to buyers in terms of proximity and organisational administration; hubs will save buyers’ time in acquiring chrome ore as well as boost their confidence to pre-finance small scale mining operations.
“Initially we have to build hubs to make sure that the chrome is in a secure place. It also means buyers can now even pay upfront because they will know exactly what they are buying. “We would have done the work ourselves in terms of sampling, assaying and sizing, so instead of traversing the country in search of chrome ore, they will just be uplifting their material from the hub and off to the market,” he said.
Zimbabwe has the world’s second-largest deposits of chrome after neighbouring South Africa and the Gweru indaba was convened to discuss production, marketing and logistics issues in the local chrome mining industry.