Martin Kadzere Senior Business Reporter
Reconstruction of the Alaska Smelting Plant has started nearly two decades after the facility owned by the Zimbabwe Mining Development Corporation, stopped operations. Alaska was shut down at the turn of the millennium following the closure of Mhangura Copper Mines-also owned by the ZMDC, which provided concentrate for the smelter.
MCM closed its shafts after ore reserves fell to unviable levels. Exploratory studies undertaken prior to MCM closure indicated the existence of sub-economic resources, quantified at 0,65 percent, which would have seen the mine operating at a loss. At the time of closure, MCM was mining at a depths of 1 000 metres thereby increasing costs of extraction. The closure of the smelter and the mine turned the once thriving town of Alaska, located 15 kilometres west of Chinhoyi in Mashonaland West into a ghost town as delivery of essential services, which were supported by the mining activities, collapsed. At the time of the closure of the mine, more than 2 000 people were left jobless.
While the smelter and refinery was placed under care and maintenance as ZMDC made efforts to source concentrate from third parties, it eventually became unsustainable. Recently, ZMDC, a Government owned mining entity entered into a 10 year lease agreement with Parrogate Zimbabwe, which is now reviving the smelter, to process chrome. Parrogate will resuscitate the plant at an estimated cost of $18 million with potential to generate $40 million in exports annually, managing director Mr Anirudh Ganediwal said recently. The company will refurbish the old structure of the smelter and related infrastructure.
It will have capacity of 2 500 tonnes of ferrochrome per month, which should generate, at the present market rate, about $40 million per year, Mr Ganediwal added. Zimbabwe is the world’s second largest chrome producers after South Africa. The project is expected to create about 400 jobs and bring back life to Alaska town.
“As you can see some works have started and we are going to collapse most of the steel structures and start rebuilding again,” project manager Mr Rohit Kumar said during a site visit last week.
“The bigger portion of the structure is dilapidated, but after a few months, we will have a refreshed structure. It is a massive structure that will certainly bring back life to Alaska. We will also restore essential services to the community.
“We have also made a commitment to restore supplies of water to Alaska town and we intend to purchase a pump and an electricity transformer that was vandalised,” said Mr Kumar. Previously, ZMDC engaged Gecamines of the DRC to revive the smelter, but the deal failed to sail through. The company has hired some of the technical former employees helping with redesigning the plant.
“Parrogate has already engaged financial advisors who are busy working on financial closure and by December, we should be in a position to have financial closure done. It would not take more than nine months to start production. Investing in chrome smelter was in line with Government’s policy on mineral beneficiation, said Mr Ganediwal.
“We found that it was ideal to value add rather than export raw material, which is basically in line with the Government policy,” he said. “We also found it will also be a good idea to resuscitate operations at Alaska and create jobs (for the local community.” The plant will initially rely on chrome ore from small scale miners in the surrounding areas such as Darwendale and Mutorashanga, but would later apply for own claims.
Alaska residents have welcomed the investment by Parrogate, saying it would bring some relief to hundreds of community residents who have been finding it hard to secure jobs for nearly two decades. Over the years Zimasco, a unit of China’s Sinosteel and ZimAlloys had enjoyed monopoly of the chrome mining sector, as it owned over 80 percent of the mining claims in the country.