via Ziscosteel operations to commence 2016 – DailyNews Live 2 August 2014 by Ndakaziva Majaka
MUTARE – Indian conglomerate Essar Holdings (Essar) is set to begin liquid steel operations at NewZim Steel — formerly Ziscosteel — in the next 24 months, Industry minister Mike Bimha said.
He told the Confederation of Zimbabwe Industries (CZI) congress in Mutare that the steel maker will have to rebuild 70 percent of its plant.
“Liquid steel production will start in the next 24 months, however, other activities for sustainability and preservation will continue taking place,” Bimha said.
“The company will be allowed to import steel billets for production at Lancashire Steel,” he said.
In November 2011, Essar acquired a 54 percent stake in then Ziscosteel in a $750 million deal, with the government remaining with a 36 percent while the other 10 percent is held by minority investors.
Essar agreed to inject money into Lancashire Steel, with production expected to commence in the next six months at Lancaster Steel.
A subsidiary of NewZim Steel, Lancashire Steel closed in 2010 due to a shortage of raw materials after the mother company Zisco indefinitely suspended operations.
However, government eventually settled for an 80 percent rights transfer to Essar in the deal that Bimha said “was scuttled by unity government squabbles”.
The plant is expected to create 7 000 jobs eventually.
Bimha also told delegates that government and the private sector had to “walk the talk” in regard to government’s ambitious economic blueprint
Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zimasset).
The policy, which is supposed to guide economic development programmes over the next five years until December 2018, requires $27 billion seed money.
Under ZimAsset, Zimbabwe targets to create 2,2 million jobs, unlock $1,8 trillion in idle mineral reserves and grow the economy by an average seven percent annually.
However, government is too broke to implement the policy and has appealed to various stakeholders for financial aid.
“The policy is now an issue of implementation, especially if you look at government’s efforts in concluding deals such as the Essar NewZim Steel.
“Economic underdevelopment is therefore now no longer government’s fault as they have facilitated for huge deals.
“It is now up to the private sector to now play their part through implementation,” he said.
A power plant is also set to be established at NewZim Steel, to shield the steel maker from the erratic power supply.
“With this plant, the first phase is in the establishment of a 600 megawatt plant, which even the national grid can tap into.
“The materials needed for this project have already been imported,” said Bimha.