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A team of engineers from Essar Africa Holdings reportedly arrived in Redcliff yesterday to start preparatory work for resumption of operations at New Zim Steel. This is definitely welcome news for the more than 3 5 00 employees of the defunct Zisco who will be taken over by the new company. The workers, who have gone for years without salaries after Zisco suspended operations in 2008 choking under a $340 million debt and other operational challenges, had lost hope following delays by Essar Holdings to resume operations.
President Mugabe commissioned the $750 million New Zim Steel (Pvt) Ltd in August 2011 but because of political bickering, operations are yet to resume. The Ministry of Mines and Mining Development and that of Industry and Commerce have been blaming each other for the delays. The Ministry of Mines has been pushing for the renegotiation of the Government-Essar deal, arguing that the new investor could not pay a paltry $700 million for resources worth more than $30 billion.
Under the original deal Essar Holdings bought a 60 percent controlling stake in New Zim Steel, leaving Government with 40 percent. The Government also has a 20 percent stake in New Zim Minerals (Pvt) Ltd, formerly Buchwa Iron Mining Company (Bimco), while Essar Holdings has 80 percent. The Government has resolved to honour the original deal hence things have started moving.
This week Government and Essar started joint exploration of Mwanesi Ranch iron ore deposits to ascertain the exact amount of iron ore deposits in the area. The Mwanesi iron ore claims were owned by former Zisco employee, Mr Roderick Mumbire through a company called Bearable Prospects but have since been taken over by Government. The resumption of production at the new steel plant will breathe life back into the surrounding communities of Redcliff, Kwekwe and Gweru.
The giant steel company has been the backbone of the Midlands province’s economy. Many downstream companies such as Lancashire Steel, Haggie, Steelmakers and Ureka in Kwekwe and Zicvast in Gweru used to depend directly on Zisco products so once operations at the new steel plant resume, it means a new lease of life for these companies. Zisco which used to be the biggest integrated steel works in Africa north of the Limpopo used to produce more than one million tonnes of steel a year at its peak.
We believe the movement of engineers to the giant steel plant signals the resumption of operations which should contribute significantly to the turning around of the country’s economy. Zimbabwe which used to export steel is now importing steel and this is not acceptable given the fact that we have abundant iron ore deposits. Government and Essar Holdings, we want to believe, have addressed all the teething problems that have delayed the resumption of operations for almost two years now.
Workers of the defunct Zisco who are supposed to be taken over by the New Zim Steel have suffered enough and therefore expect operations to resume as soon as possible. Redcliff Municipality which depended on Zisco, will benefit immensely from the resumption of operations at the new steel plant. Many of its ratepayers were not paying their bills because they were not getting salaries for years now.
The municipality should therefore not be found wanting when it comes to serving the new investors and it is our fervent hope that once the workers start receiving their salaries they in turn will clear their arrears with council to enable it to provide the required services. The downstream industries should also prepare to resume production and other businesses that had closed shop such as banks should now re-open. We want to once again implore Government to ensure that no spanners are thrown in the works this time around.
Online Reporter