Govt expects Zisco to reopen in January

via Govt expects Zisco to reopen in January – DailyNews Live by Mugove Tafirenyika  5 JANUARY 2014

Zimbabwe’s steel maker New Zimbabwe Steel, formerly Zimbabwe Iron and Steel Company (Ziscosteel), will be revived this month, a government official has said — a reopening that could stem the destitution stalking Redcliff in the wake of the mining group’s shutdown.

Mike Bimha, Industry and Commerce minister, told the Daily News yesterday that all was set for the re-opening.

“Essar will officially begin operations this month soon after the festive season,” Bimha told the Daily News. “Government has since done its part in terms of transferring the ownership of claims at Buchwa, Ripple Creek and other claims.”

Indian firm Essar Holdings’ $750 million takeover of NewZimSteel had stalled because of a dispute over the transfer of mineral claims, forcing officials from the firm to decamp from the Redcliff site.

Three thousand workers and tens of thousands of their family members in the town of Redcliff were languishing because of the shutdown, that has affected salaries, medical aid and insurance fees.

Yet steel prices are at a record high on the international markets, and this company, which has found a suitor to pump working capital, is also sitting atop one of the richest and consistently-producing iron ore veins in the world.

Ziscosteel, a major foreign-currency earner before independence in 1980, stopped operations in 2008 at the height of an economic crisis, due to a lack of capital to re-equip its plants.

Prior to the takeover, government held about 70 percent in Ziscosteel — once the largest integrated steelworks in the region.

The situation at NewZimSteel is getting out of hand, with hundreds of angry workers charging that their families were going hungry and plagued by disease.

“Both of us as government and the investor are committed to the deal,” Bimha said.

“That is why we have made sure that we do our bit to make sure the water and energy issues which are part of the deal are available for the investor to do business.”

Bimha said on its part, Essar had also met part of its obligation to take over the NewZimSteel debt estimated to be over $200 million.

Essar had earlier rejected the reserves at Buchwa and Ripple Creek saying they were of poor quality and too deep that it was not viable for the company to exploit.

While acknowledging that the quality of the ore was not good enough, Bimha said the steel giant was not concerned about that as they could blend it with high grade ore to produce a quality product.

The company’s estimated 3 000 workers have not been paid since June last year.

Workers who spoke to the Daily News on condition of anonymity, fearing victimisation, said living conditions had deteriorated because they did not even have money to buy food — and this might result in violence.

“It is only promises and promises from the side of management and workers are very angry,” said one worker.

NewZimSteel’s rescue has been delayed due to squabbles in government during the inclusive government era, amid reports that Welshman Ncube and Obert Mpofu were differ on the sale off of mining claims.

Government had initially indicated that operations at New Zimbabwe Steel will “definitely commence” before the end of last year but that was not to be as the Indian giant insisted on government meeting its obligations first.

Firdhose Coovadia, Essar’s resident director for Africa, Middle East and Turkey, has said that Essar was prepared to invest $1bn in the steel plant “to achieve annual production of 1,2 million tones.”

It would also sink $100m on iron ore reserves that have not previously been explored and another $3bn to create a world-class beneficiation plant and a separate power plant.

Zimbabwe miners are reeling under crippling power outages and challenges emanating from the operating framework such as expensive capital and high mineral royalties.

 

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