Government, through the Industry ministry, is in the process of vetting six investors who have expressed interest in Kwekwe based steel manufacturer Zimbabwe Iron and Steel Company (Ziscosteel), an official in the Industry ministry said
Industry ministry deputy minister Chiratidzo Mabuwa, last week told the National Assembly that invitation of expressions of interest had been sent to 29 potential investors and six responses had been receive by October 4, 2016. “These potential investors include both local and foreign investors from countries such as South Africa, India and China.
“My ministry is now working on carrying out the due diligence exercises for these potential investors that have expressed their interest,” she said. Mabuwa also highlighted that the ministry expected to finalise the identification of an investor to resuscitate Zisco by the end of 2016. This comes as the country’s $750 million deal with Indian firm Essar Africa Holdings (Essar) collapsed last year, with the investor bailing after steel prices plunged 40 percent in 2014.
Zimbabwe signed the $750 million deal in 2011 to revive Zisco fortunes but the highest level the deal was consummated to was just a name change to New Zimsteel. Industry minister Mike Bimha recently announced that government was set to assume the steel manufacturer’s over $370 million debt to make the investment attractive to potential suitors.
Bimha said his ministry and the Finance ministry were at an advanced stage of crafting a bill to clean Zisco’s balance sheet. If the bill sails through, it will not be the first time government has moved in to window dress a State enterprise’s books. Treasury last year pushed for government to assume over $1,35 billion central bank debt. There has also been talk of assuming Air Zimbabwe’s over $300 million debt and TelOne’s debt.
The minister is on record saying bickering during the inclusive government had prevented the ZiscoEssar deal from taking off. At its peak, Ziscosteel was the largest integrated steel works in Africa with a capacity to produce one million tonnes of the commodity annually, and its demise in 2008 came as no surprise due to the Zanu PFled government’s chronic mismanagement, corruption and maladministration of the economy. The company, affectionately known as the heartbeat of the Midlands Province, used to produce over 50 000 tonnes of prime iron and steel and employed over 6 000 workers.
Currently, workers at the company, who have received intermittent salaries over the years, are owed more than $110 million. Apart from resuscitating Ziscosteel, Essar also proposed to construct a 600MW thermal plant to boost power supply to the iron processor’s plant. Bimha, who at one time said Zisco would resume operations by December 2013, however, remains optimistic that the company will get an investor soon.