By Staff Reporter
ONE of Zimbabwe’s largest mining companies, Kuvimba Mining House (Kuvimba) has clinched a multi-million-dollar investment deal with government for the resuscitation of the moribund Zimbabwe Iron and Steel Company (Ziscosteel).
The deal was announced by minister of State for Presidential Affairs and Monitoring Implementation of Government Programmes Jorum Gumbo during a post-cabinet press briefing in Harare Tuesday.
Gumbo said the company was selected as Ziscosteel’s investment partner following the approval by cabinet.
This effectively rules out the involvement of any foreign investor as had been indicated repeatedly by Industry and Commerce minister Sekai Nzenza.
An estimated US$1billion is required to revive the worn-out factory, which used to be a symbol of industrial excellence in the country.
“After due process was undertaken for the identification of an investor to partner in the operationalization of Ziscosteel, cabinet approved that Kuvimba Mining House be engaged as the Investment partner for the resuscitation of Ziscosteel,” Gumbo said.
Government is the largest shareholder in Kuvimba with 65% stake while private investors have 35%.
THE Office of the President and Cabinet (OPC) took over the scouting for a strategic investor for Ziscosteel last year following government’s decision to revive the defunct giant steelmaker, brought to its knees mainly through mismanagement and high-level looting.
Cabinet then set up an inter-ministerial taskforce to spearhead the revival and the scouting process was handled by the Zimbabwe Development Agency (Zida) which falls under the direct supervision of the OPC.
A 2006 parliamentary inquiry established that the Redcliff plant was brought to its knees by grand looting by government ministers and other senior officials.
However, the report was never published.
Previous efforts to revive the massive steel manufacturer, which at its peak employed more than 5 000 people, have yielded no fruit, mainly on account of bureaucratic wrangling and allegations of corruption.
In 2020, a US$1 billion deal with Chinese company Guangzhou R&FA to resuscitate Zisco collapsed after the government changed its shareholding offer to the company’s president, Zhang Li.
The Chinese billionaire, a real estate mogul, had been willing to start work on the collapsed steel giant and progress had already been made in procuring some equipment.
At first, Guangzhou R&FA was offered 100% shareholding in the steelmaker, but the government later changed it to 48%. The Chinese team felt short-changed by the sudden turn.
In January 2018, President Emmerson Mnangagwa promised that Ziscosteel and Shabani Mashaba Mines would begin operations within his first 100 days.
There has, however, not been activity at the two entities, which used to provide thousands of jobs and had downstream benefits to the economy at their peak.
Prior to that, another deal with Indian firm, Esser Holdings, also failed to materialize.
Ziscosteel officially closed its doors in 2016 and laid off its remaining workers without terminal benefits.