adminEssar Holdings inherited Ziscosteel when it was saddled with huge debts and owed workers several years’ salaries.
In an interview over the weekend after addressing an MDC-N party rally in Gweru, Industry and Commerce Minister, Professor Welshman Ncube said the rehabilitation process at Ziscosteel was still at infancy stage with real production of the first bar of steel expected only in eight months.
The minister’s remarks came amid reports that there was still nothing to show at Ziscosteel since the mega-rich Essar Holdings last year bought a stake into the company that resulted in the company assuming a new name, New Zimsteel.
“People should bear in mind that when Essar took over Zisco last year, the steel plant was at an advanced stage of decay. Zisco had ceased operations some time in October 2008.
“The main furnace, Blast Furnace Number Four, had molten steel that solidified in it. It also developed a huge crack when it was suddenly switched off due to lack of production,” he said.
Prof Ncube said Essar was yet to do significant work in repairing the obsolete infrastructure and resuscitate operations at the Redcliff-based steel company.
He said negotiations with five ministries critical to the running of the company were still on.
“There are five strategic ministries that are critical to the resuscitation of New Zimsteel. There is the Ministry of Water Resources Development, Ministry of Finance, Mines and
Mining Development, and Transport and Infrastructural Development, among others. There are still terms still to be finalised between Essar and these ministries for the running of the company,” he said.
Prof Ncube said owing to protracted negotiations going on between Essar and various ministries, Essar was yet to import critical material to rebuild furnaces and coke ovens.
“Most of the materials that are needed to repair furnaces and coke ovens at the company are imported from countries like Germany and China. Essar is still to import the material and needs to confirm the materials which are needed for the rehabilitation process because they are still negotiating to have the duty reduced to the imported material as part of investment incentive,” he said.
Pro Ncube said Essar Holdings was also facing challenges with some Ziscosteel mining claims which he said were corruptly sold.
He said the matter was now being handled in the courts.
“This is the other challenge but the matter is now being handled by the courts,” he said.
Essar took control of 54 percent of the Government stake in Zisco which was secured last October.
The Mauritian firm landed the deal ahead of companies such as Jindhal Steel and Power of India, Arcelor Mittal of South Africa, Reclamation, Murray and Roberts (SA), a certain
Chinese company, the Gateway Consortium, and Steel Makers Zimbabwe, among others.
At its peak Zisco used to produce close to a million tonnes of steel a year.
The giant steel company had at its peak a workforce of 4 000 employees.
Online Reporter