HomeBusiness DigestMnangagwa takes over Ziscosteel revival drive

Mnangagwa takes over Ziscosteel revival drive

THE Office of the President and Cabinet (OPC) has taken over the scouting for a strategic investor for Zimbabwe Iron and Steel Company (Ziscosteel), it emerged this week.


This follows government’s decision in May to revive the defunct giant steelmaker, brought to its knees mainly through mismanagement and high-level looting.
Cabinet set up an inter-ministerial taskforce to spearhead the revival, but in an interview this week, chairperson of the taskforce, Industry and Commerce minister Sekai Nzenza, said the scouting process will now be handled by the Zimbabwe Development Agency (Zida) which falls under the direct supervision of the OPC.

She said Zida is evaluating a number of expressions of interest from as yet unnamed potential investors.

“There is a lot of interest, but I am not able to speak (about them) yet. We are working closely with Zida on the matter. Zida takes the lead,” Nzenza said.
She said the Ziscosteel board and management was in the process of finalising a work plan for the company.

“The board’s first meetings and various committees have been established. They are working on a national steel production strategy as part of our growth and innovation goal. The board will present a report soon,” Nzenza said. “We are very pleased with the way the board has started; good corporate governance and transparency while working closely with management to deliver the expected mandate.”

A 2006 parliamentary inquiry established that the Redcliff plant was brought to its knees by grand looting by government ministers and other senior officials. However, the report was never published.

Previous efforts to revive the massive steel manufacturer, which at its peak employed more than 5 000 people, have yielded no fruit, mainly on account of bureaucratic wrangling and allegations of corruption.

Last year, a US$1 billion deal with Chinese company Guangzhou R&FA to resuscitate Zisco collapsed after the government changed its shareholding offer to the company’s president, Zhang Li.

The Chinese billionaire, a real estate mogul, had been willing to start work on the collapsed steel giant and progress had already been made in procuring some equipment.

At first, Guangzhou R&FA was offered 100% shareholding in the steelmaker, but the government later changed it to 48%. The Chinese team felt short-changed by the sudden turn.
In January 2018, President Emmerson Mnangagwa promised that Ziscosteel and Shabani Mashaba Mines would begin operations within his first 100 days.

There has, however, not been activity at the two entities, which used to provide thousands of jobs and had downstream benefits to the economy at their peak.
Ziscosteel officially closed its doors in 2016 and laid off its remaining workers without terminal benefits.

Most of its infrastructure, equipment and spares have either been vandalised or looted or become obsolete over the years.

In 2006, Indian firm Global Steel Holdings Limited courted Ziscosteel and wanted to inject US$400 million in a rehabilitate, operate and transfer arrangement, but the deal suffered a stillbirth.

In 2011, Essar Africa Holdings’ bid to take over the firm in a deal worth US$750 million also hit a brick wall due to bickering in the then inclusive government comprising three political parties Zanu PF, and the two MDC formations, which were led by Morgan Tsvangirai and Arthur Mutambara.

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