A mining technology outfit controlled by Zimbabwean and foreign shareholders, Intrachem Private Limited, will invest $7 million into its Kwekwe-based explosives manufacturing plant.
This was disclosed in a report released by the firm this week, following an inspection of the firm’s facility, by the Industry and Commerce minister Sekai Nzenza. According to the Minister, Intrachem will be carrying out its strategy in stages.
Nzeza said “The company has completed two of the four phases in setting up a fully integrated civil explosives manufacturing plant,” Nzenza said.
“The company is investing $7 million in establishing a highly automated and fully integrated local plant in two phases, the bulk emulsion and detonator assembly respectively.”
The minister said the company had also completed construction of storage facilities in line with its expansion drive. Nzenza said Intrachem’s detonator assembly would be in two parts. The minister said the first would focus on small artisanal miners, while the other would be for large-scale mining houses.
She said on completion of the full project, Intrachem would have scope to produce cartridges, boosters and specialised products, mainly for use in exploration.
The company has already began the exportation of detonators into the Tanzanian and Zambian markets. Development of the firm gives traction to Zimbabwe’s target to reduce its import bill through setting up firms whose products are currently being imported.
In 2021, Mines and Mining Development minister Winston Chitando had disclosed that when completed, Intrachem would save the country $20 million yearly through reduced imports.
In a recent interview, Nzenza said Zimbabwe’s value chain development would promote exports in finished products.
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Over the years, many African countries, including Zimbabwe, have been exporting unprocessed raw materials to European countries.
“The Ministry of Industry and Commerce’s mandate is to move up the value chains and increase local production utilising the raw materials we already have nationally. One of my key priorities is to increase the local production of fertiliser and ensure food security,” she said.
“The ministry has always taken a strategic approach to fertiliser production. Even before the Ukrainian crisis, as a ministry, we pushed the five-year fertiliser import substitution strategy to ensure that Zimbabwe becomes self-sustainable in fertiliser production.
“This is why the government and companies like Zimphos and Sables are working on increasing their capacity and efficiency in fertiliser production,” Nzenza added.
African governments have challenged industrialists to enhance value-addition and diversify exports to help end Africa’s reliance on exporting raw materials much to the detriment of the continent’s growth prospects.
The firm has been aggressively diversifying from a trader in finished explosives into a producer.
Recall that Zimbabwe’s President , Emmerson Mnangagwa had on Thursday, July 28, officially commissioned a combined $27 million investment by two Kwekwe companies covering explosives and dairy expansion projects, which are envisaged to assist the country reduce imports while creating more job opportunities for locals.
With 85 percent of Intrachem Explosives is owned by locals with just 15 percent in the hands of foreign investors, Intrachem has invested $7 million in establishing the new plant, which has an import substitution value of up to $20 million.
Zimbabwe’s Mining Industry
Zimbabwe’s mining sector is highly diversified, with almost 40 varied minerals. The nation’s major minerals range from platinum group metals (PGM), chrome, coal, goals and diamonds.
Zimbabwe prides itself as the second-largest platinum deposit and high-grade chromium ores in the world, with an estimated 2.8 billion tons of PGM and 10 billion tons of chromium ore. The industry accounts for about 12% of the country’s gross domestic product (GDP), and the minister of mines claims the sector has the potential to generate $12 billion yearly by 2023, if the government tackles challenges that include prolonged power shortages, foreign currency shortages, and policy uncertainties.
Low foreign currency retention requirements have challenged mineral exporters, especially during periods when the black-market exchange rate diverged significantly from the official rate leading to smuggling. The government’s projections the sector would drive economic growth were crushed by COVID-19 pandemic in 2020. However there had been some early signs of recovery in 2021 driven by improved international commodity prices.
Companies are required to export all minerals using only the state-owned Minerals Marketing Corporation of Zimbabwe (MMCZ), except gold which must be sold to the Reserve Bank of Zimbabwe’s (RBZ) subsidiary Fidelity Printers and Refiners (FPR). Individual companies may receive permission, however, from the government of Zimbabwe to sell minerals directly to avoid U.S.-targeted sanctions on the MMCZ.
Leading Sub-Sectors
Zimbabwe’s top minerals include gold, platinum group metals (PGM), chrome, coal, diamonds, and lithium.
Exploration of possible oil and gas deposits in Muzarabani is scheduled to begin later this year. Compared to largely depressed mining activities in 2020 due to COVID-19 induced lockdowns, demand increased in 2021 for a wide range of commodities. Supply chain disruptions in South Africa and Russia helped increase global PGM prices in 2021.
