HARARE - Foreign iron and steel producers are still attracted to Zimbabwe despite a delay in the consummation of the Essar deal, Industry and Commerce minister Mike Bimha has said.
Zimbabwe signed a $750 million deal in 2011 with Indian firm Essar Africa Holdings (Essar) to revive fortunes of the Kwekwe-based steel manufacturer Ziscosteel, but four years down the line nothing has changed except for the name of the company to New Zimsteel.
Bimha told delegates attending the Zimbabwe National Chamber of Commerce (ZNCC) annual conference in Victoria Falls last week that his office was usually flooded by foreign investors willing to venture into new iron production projects.
“On Tuesday night I was visited by some foreign investors who expressed an interest to go into steel processing. They will be presenting their proposal to me next week,” he said.
Bimha noted that there was need for new players to tap into the country’s vast mineral resources and create employment.
“We also have had investors who want to venture into stainless steel production,” he added.
This comes as the Industry minister last week conceded that Ziscosteel resumption might take longer than anticipated due to declining iron ore prices, deteriorating plant conditions and technical disagreements among other things.
At its peak, Ziscosteel was the largest integrated steel works in Africa with a capacity to produce one million tonnes of the commodity annually, and its demise in 2008 came as no surprise due to Zanu PF government’s chronic mismanagement, corruption and maladministration of the economy.
The company, affectionately known as the heartbeat of the Midlands province, used to produce over 50 000 tonnes of prime iron and steel and employed over 6 000 workers.
Currently workers at the company, who have received intermittent salaries over the years, are owed more than $110 million.
Apart from resuscitating Ziscosteel, Essar also proposed to construct a 600 MW thermal plant to boost power supply to the iron processor’s plant.
However, the construction of the thermal plant is under threat after the Zimbabwe Energy Regulatory Authority warned that it was going to cancel independent power producers’ licences — with a capacity to generate 5 000 megawatts (MW) — including Essar.
Bimha, who at one time said Zisco would resume operations by December 2013, however, remains optimistic that the deal would be consummated soon.
“There is no going back. Both government and the partner are doing their best to make sure that Zisco is resuscitated,” he said.