By Business Reporter
DEFUNCT steelmaker, Zimbabwe Iron and Steel Company (Ziscosteel) is scheduled to resume operations with a projected annual output of one million tons of steel products following US$1 billion investment grant from a foreign investor.
The resuscitation programme which is expected to start soon, will last between 18-24 months to restructure and reconstruct blast furnaces before commencement of production.
Presenting the Transitional Stabilisation Programme, which is the policy implementation programme for Vision 2030, Finance and Economic Development Minister Mthuli Ncube set the bar high for the steel producer.
“Once the restructuring and reconstruction of the blast furnace is complete, Zisco Steel is expected to produce 1 million tons of long steel products, bars and wire roads per annum, while 3 million tons of long flat products, section steel and belts, per annum will be produced during the second phase.”
Once one of Africa’s top steel producers, Zisco Steel used to produce some of the best steel in the world, with a capacity output of one million tonnes per year, in which 70 percent accounted for exports with the remainder for local consumption.
The investor has to date carried and concluded a due diligence exercise to determine the status of the plant, having been allocated two special grants on which to do exploration and determine quantity and quality of coking coal available.
“Government has already signed an Asset Purchase Agreement with a potential investor who is ready to invest at least US$1 billion to restart operations,” said Mthuli.
In order to kick start operations, government has satisfied the conditions precedent which includes debt assumption, assented in May 2018 valued at $494 817 324 million owed to various local and foreign creditors.
The Zisco Steel programme was granted National Project Status by Treasurer on 27 December 2017 and the Special Economic Zone status on 19 December 2017.
Huge savings on import expenditure are also expected once the iron maker has gone into full production.
“The program will also benefit from anticipated savings on import of steel translating to at least US$350 million per annum while generating the much needed foreign currency through potential exports projected to over US1 billion, as well as creating 3 000 and 20 000 in both direct and indirect jobs, relatively along the iron and steel value chain,” he said.
The revival of Zisco Steel cannot be revived without the efficient functioning of upstream enablers. “The resuscitation of Zisco will provide a boon to such industries at Hwange Colliery, National Railways of Zimbabwe, and Munyati Power Station which was constructed specifically to supply power to Zisco,” said the minister.
At full operation, ZISCO requires a significant level of dedicated supplies of coal amounting to 100 000 tonnes from Hwange every month and NRZ locomotives to carry the supplies between Hwange and Redcliff.
Investors such as Global Steel Holdings and Essar Africa Holdings expressed interest to resuscitate the mothballed operations of the steel giant but their attempts failed due to varied reasons.
In 2017, R&F Company president, Mr Zhang Li met with senior government officials after the Chinese firm secured a US$1 billion investment towards resuscitation of Zisco Steel. According to Forbes, Mr Zhang Li is believed to be worth US$3.9 billion. ENDS//