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Lloyd Gumbo Harare Bureau
RESUMPTION of operations at NewZim Steel (formerly Ziscosteel) is likely to take longer than expected amid indications the firm has to build three new plants before normal work starts. This means about 3,000 workers at the former giant steel company are likely to continue struggling as they are reportedly struggling to make ends meet due to non-payment of salaries.
Industry and Commerce Minister Michael Bimha told the National Assembly on Wednesday that to keep workers active, management wanted to resume operations at Lancashire Steel while the plants at NewZim Steel were under construction.
He was responding to a question by Kambuzuma MP, Willias Madzimure (MDC-T), who wanted to know when operations would resume at the firm.
“Because of the state of affairs on the equipment at NewZim Steel, there will be construction of at least three new plants alongside what we have,” said the Minister.
“It’s no longer an issue of rehabilitation but more of constructing certain new plants and that entails a lot of work in terms of planning and making orders of the new equipment.”
He said it would take long to buy new equipment for the three plants.
Minister Bimha said they were expecting the Essar Holdings vice president to visit Zimbabwe for the signing of the closure of deal.
“There are a number of activities that management is looking at and one of those is to ensure that Lancashire Steel starts operating. But as you know, for Lancashire Steel to operate, you need steel billets. As of now, we don’t have those billets. But what we will be doing is to import then supply to Lancashire Steel.
“That’s just an example of what activities will take place before we start processing of steel making. So there are a number of those activities that will take place,” he said.
Minister Bimha said the time frame for resumptions of operations could only be determined after getting technical input of what would be required.
Mutasa South MP, Cde Irene Zindi (Zanu-PF), asked Minister Bimha to confirm if the investor – Essar had deposited money for resumption of operations but was diverted.
But Minister Bimha dismissed the allegations saying the investor was responsible for settling the foreign debt, as such there was no need to deposit money to Zimbabwe.
Government agreed in March 2011 to sell 54 percent of its shareholding in Zisco to Essar to enable the revival of the firm but a number of sticking issues stalled the plans since then.
The new company paid salaries for employees for several months before management stopped arguing they could not continue pumping out money without production.
The challenges of non-payment of salaries have spread to NewZim Steel subsidiaries like Lancashire Steel in Kwekwe.
During its peak, Ziscosteel had the capacity to produce more than one million tonnes of steel per annum and employed up to 4,000 workers .It closed in 2008 due to viability challenges.
Bongani Ndlovu