The central bank cannot effectively discharge its core function as the lender of last resort with a $1,35 billion debt in its books

Martin Kadzere and Tinashe Makichi
THE Reserve Bank of Zimbabwe has released $5 million to Dorowa Minerals to boost phosphate production, a major component in the manufacturing of fertiliser. Chief executive of Chemplex Corporation Mr Misheck Kachere said the fresh capital injection would see the company operating at full capacity and able to meet domestic requirements.

Chemplex Corporation is a division of the Industrial Development Corp which owns Dorowa. The mine is the only phosphate mine in Zimbabwe. With the 2015 /16 agricultural season approaching, the capital injection will help the company raise phosphate production.

“The RBZ has availed $5 million to Dorowa for the complete recapitalisation and that money is available now. This money will take care of working needs of the company,” he said. “The scope to produce at Dorowa is still there. After the capital injection we will be able to run Dorowa at full capacity.”

The plant operates at a capacity of 150 000 tonnes of phosphates rock concentrate per annum, which can be used to make various chemicals. Mr Kachere said it would take a month to reach full capacity. “At the moment we are running at 30 percent capacity,” said Mr Kachere.

“The running of Dorowa at capacity will result in a 25 percent cost reduction and that will be passed on to the players in the value chain and prices will come down gradually as we increase capacity.” In an interview recently, central bank governor Dr John Mangudya said recapitalising Dorowa was critical since it produces key inputs in the production of fertiliser. The central bank would further avail $10 million for the Zimbabwe Phosphate Industries to complete the whole phosphate chain.

“These are not projects which take long to kick off,” said Mr Kachere. Zimbabwe is an agro-based economy and President Mugabe, on his State of the Nation Address this week, recognised agricultural revitalisation as a priority for economic growth. Dorowa Minerals operates two open-pit mines in the Dorowa area to extract phosphate and more recently magnetite which has a ready market in the region.

It is located 3km south of the Save River in the Upper Save valley about 90km west of Mutare and is the only phosphate mine in Zimbabwe. Dorowa’s beneficiation plant consists of milling and flotation processes to produce phosphate concentrates which are converted into superphosphates at Zimphos. Ore from the pit is at 6,5 percent P2O5 and the concentrates being dried and sent to Zimphos are at 37 percent P2O5.

The dried concentrates are sent to the railhead at Nyazura some 65km away by road and 190km to Zimphos by rail. Zimphos requires $7,5 million for immediate refurbishments which includes the following; sulphuric acid plant $4,2 million, phosphoric acid plant for TSP $1,5 million, Phosphates plant $600 000, Aluminium Sulphate Plant $450 000, Materials Handling Equipment $500 000 and factory buildings, structures and utilities $250 000.

The company also requires $3,5 million in working capital. In order to expand production capacity the company requires new investors. In line with market demand, Zimphos would like to exploit its export potential and shift to high analysis products in the next three to five years. The shift requires an investment of $30 million.