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When President Mugabe commissioned the $750 million New ZimSteel to replace Ziscosteel in 2011, hopes were raised for the revival of the country’s giant steel plant. NewZim Steel, a joint venture between government and Essar Africa Holdings which acquired 54 percent stake in Ziscosteel, was supposed to produce its first bar of steel after eight months from the date of launch at the latest.
The steel plant is yet to resume operations and the delay has been attributed to a number of challenges. The major challenge was the dispute over mineral rights as the government was at one time of the view that the iron deposits at Mwanesi Ranch in Chivhu were undervalued. Government and Essar formed a subsidiary NewZim Minerals in which Essar has 80 percent while government retains the remaining 20 percent.
It is this subsidiary company which is supposed to provide the iron ore to NewZim Steel. Essar Africa Holdings, soon after the commissioning of the new company by President Mugabe, started paying workers but suspended this following disagreement with government over mineral rights.
Government and Essar Africa Holdings have since resolved the dispute and Essar is therefore expected to resume operations soon. Ziscosteel suspended production in 2008 due to viability challenges that included mounting debts among others. Essar agreed to take over Ziscosteel’s debts which include millions of dollars it owes its workers in unpaid salaries. Ziscosteel workers have not been paid salaries since the suspension of production in 2008.
The workers’ plight is worsening by each passing day and there are reports that some of them are now homeless after being kicked out of their rented accommodation by Redcliff Municipality. The revival of Ziscosteel under NewZim Steel has taken too long and it’s time parties involved speed up work to revive the company.
The plant and equipment at Ziscosteel is now obsolete so Essar has to replace it with new machinery. We want at this junctures to urge Essar Africa to speed up the rehabilitation work at NewZim Steel so that production of steel can resume as soon as possible. NewZim Steel is a very strategic company to the revival of Zimbabwe’s economy.
The resumption of production at NewZim Steel will directly impact big companies such as the National Railways of Zimbabwe, Hwange Colliery, Zesa Holdings and many other such big companies. Many downstream industries will benefit from resumption of production at NewZim Steel. The Midlands province will never be the same once production at NewZim Steel resumes and many of its industries are in fact NewZim Steel downstream industries.
Now that the sticking issues have been resolved, there is no reason for Essar Africa to delay in carrying out the rehabilitation work leading to resumption of production at NewZim Steel. It is our fervent hope that the companies directly linked to production at NewZim Steel such as the NRZ, Hwange Colliery and others are bracing themselves for the new challenges so that when production resumes, they are not found wanting.
Online Reporter