(HERALD) UK-based mining firm acquires 49pc Falvect stake

UK-based mining firm acquires 49pc Falvect stake
By Bright Madera

CHROMEX Mining Plc, a UK-based chrome mining company, has concluded a deal to acquire 49 percent of Falvect Mining (Private) Limited, a locally-based mining outfit.

The AIM listed firm focussed on Southern Africa said it would have the exclusive rights to co-develop all Falvect chrome concessions in the Shurugwi region and tribute agreements in the Ngezi area. Chromex will also market all the chrome products produced from those operations.

In return, the company will provide working capital into Falvect and funding for the development of current projects and any additional acquisitions in Zimbabwe, which is host to significant high-grade chrome ore deposits.

In a statement Chromex chief executive officer, Mr Russell Lamming said: "The investment in Falvect is in line with our strategy of building a broad portfolio of chrome and related mineral assets across southern Africa.

"The timing of the acquisition is linked to the lifting of the Zimbabwean ban on exports of chrome ore and fines, effective November 1, 2009 and will hopefully allow us to expand our production capabilities going forward".

The Government banned the exportation of raw chrome last year in a bid to add value to the mineral, which is exported to South Africa, China and Europe.

He added that in spite of the challenging chrome market, Chromex has continued to invest in its operations and has a producing mine and operating benefication plant.

"Our aim is to continue to build our business, expand on our portfolio and generate value for shareholders going forward," Mr Lamming said.

He said a technical review of the contained mineralisation would commence once final agreements have been concluded. In line with the development of its business, Chromex is already investigating the economics of setting up benefication facilities in Zimbabwe.

Chromex currently has two key mining assets located on the Bushveld Complex in South Africa, which between them have total resources of approximately 41 million tonnes of chromite.

Chrome mining in undertaken in Shurugwi, Mutorashanga, Lalapanzi and Guinea Fowl with the smelting being done in Kwekwe. Chrome mining in Shurugwi (formally Selukwe) started as open cast working in 1905.

Chrome is regarded with great interest because of its high corrosion resistance and hardness.

Foreign investors mainly in the mining sectors are scrambling to invest in the country following a political will by the Government to protect all foreign investments.

The rush in the mining sector follows the successful hosting of the Mining Indaba, hosted by the Ministry of Mines and Mining Development aimed at reviving investor confidence in Zimbabwe’s mining sector. Under the Short-Term Emergency Recovery Programme the exploitation of chrome was given priority as the country had huge reserves of the mineral.

STERP noted that the low level of benefication and value addition to mineral resources limits the overall contribution of mining to the revival of the economy.