Siphakeme .Mnindwa
Zimasco prioritises furnace optimisation amid market volatility
FERROCHROME producer Zimasco Private Limited is prioritising the optimisation of one of its furnaces, which is under maintenance, while keeping a close eye on global market trends.
Should market conditions continue to deteriorate, the company may defer further optimisation of its second furnace, potentially resulting in its temporary closure.
In a press release, Zimasco general manager Mr Pindukai Musarandega reaffirmed the company’s commitment to navigating market volatility with resilience and strategic foresight, ensuring decisions are aligned with the best interests of the company, its employees, and stakeholders.
“As you may be aware, the ferrochrome market has faced a period of volatility, with persistent bearish trends impacting global pricing and production dynamics. In response to these ongoing challenges, Zimasco made the difficult decision to shut down four of its older furnaces in November 2023 as part of a strategic cost-control initiative aimed at safeguarding the company’s long-term viability,” he said.
Since the fourth quarter of 2023, Zimasco has concentrated its production efforts on four newly commissioned furnaces.
Two of these semi-closed submerged arc furnaces have been operational since mid-2023, performing well and meeting production targets.
The remaining two fully closed submerged arc furnaces, the first of their kind in Zimbabwe, were brought online in early 2024 and are still undergoing stabilisation and optimisation.
The fully closed furnaces were designed to operate primarily on sintered ore produced by the company’s Shaft Sinter plant. However, delays in completing the Shaft Sinter plant due to resource constraints have necessitated the use of ordinary furnace feed, instead of the pelletised and sintered ores initially planned.
Recent weeks have seen a significant decline in global ferrochrome prices, compounding the challenges faced by Zimasco. As a result, the company temporarily shut down one of its fully closed furnaces early this month to mitigate value destruction and preserve long-term business sustainability.
Mr Musarandega said temporary closure is a necessary step to navigate the current challenging market environment. He said while not ideal, it is a proactive measure to protect the company’s interests and those of its stakeholders.
“The company remains committed to closely monitoring the market and adjusting its operating model as needed.
However, with market conditions continuing to weaken and further price deterioration expected, Zimasco will be forced to consider additional measures, including the potential suspension of optimisation efforts on the remaining furnace, should prices continue to fall,” he said.
Mr Musarandega said Zimasco remains committed to closely monitoring market conditions and adjusting its operations accordingly. He said the two semi-closed furnaces, which have remained stable, will continue normal operations. Efforts to optimise the performance of one fully closed furnace will also persist.
However, Mr Musarandega cautioned that further price declines could force the company to suspend optimisation efforts on the second fully closed furnace, potentially leading to its temporary shutdown.
He said Zimasco will continue to adapt its operations to market realities, ensuring the long-term sustainability of the business while safeguarding the livelihoods of its workforce and the interests of its stakeholders.
