China Development Bank provides $240 million to Sinosteel for Zimasco Equity Acquisition Project

In 2007, China Development Bank provided a $240 million loan to Sinosteel (中国中钢集团有限公司) for the Zimasco Equity Acquisition Project. The proceeds of the loan were used to be used by the borrower to facilitate Sinosteel’s acquisition of a 92% equity stake in the Mauritius-based company ZCE, which is the owner of the Zimbabwe’s largest chromium producer, Zimbabwe Mining and Smelting Company (Zimasco). The borrowing terms of the loan are unknown. On September 19, 2007, the Chinese state-owned company Sinosteel Corporation signed an agreement to acquire a majority 92% stake worth $200 million in the Mauritius-Zimbabwean company Zimasco Consolidated Enterprises (ZCE) (Chinese contract name: 中钢集团收购津巴布韦Zimasco之控股公司ZCE股权项目). The agreement also included an option to acquire the remaining 8% stake over the following two-and-a-half years; Sinosteel did not formally acquire its share in Zimasco until December 13, 2007. Also, as part of the deal, Sinosteel gained indirect ownership of ZCE's subsidiary, Zimasco Holdings: a ferrochrome producer and exporter based directly in Zimbabwe. Sinosteel originally planned to purchase a 50% stake in Zimasco but that progressed over time to 67%, 73%, and eventually 92%. All of Zimasco's staff and management were expected remain in place, while Sinosteel was expected acquire Zimasco's iron-ore mines and smelting plants in Zimbabwe. As of 2010, Zimasco Holdings was renamed as Sinosteel Zimbabwe Chrome, but it remains a wholly-owned subsidiary of Sinosteel Corporation. It is the largest ferrochrome producer in Zimbabwe with major plants operating in Kwekwe and Shurugwi, Zimbabwe.

Additional details

1. The Chinese project title is Zimasco之控股公司ZCE股权项目 or 中钢集团收购津巴布韦Zimasco之控股公司ZCE股权项目 or 中钢集团在津巴布韦投资的铬铁加工生产项目 or 国家开发银行安徽省分行津巴布韦矿业投资贷款项目. 2. Sinosteel Corporation's representative in the deal was the general manager of the company's international cooperation department, Jiang Baocai.

Number of official sources

9

Number of total sources

14