Delays in reviving New Zim-Steel explained

The Government and an Indian conglomerate, Essar Holdings, signed a US$750 million deal to revive New Zim-Steel, formerly Ziscosteel, in Redcliff, in 2011 but due to outstanding issues over the the company's debt repayment plan, there have been delays in resuming business.

Part of the conditions of the deal required the new investor to settle a debt amounting to US$300 million and US$200 million owed to foreign and local creditors respectively.

Minister Bimha told Business Chronicle in Bulawayo that outstanding issues had nothing to do with policy anymore.

The minister said progress on the Essar deal was now a question of implementation.

"The Government has given its support. The investor is willing and committed to continue. What we need to do is to speed up the implementation process.

"There has been a lot of sabotage, a lot of erosion and there has been decay to a point where 65 percent of the plant has to be reconstructed.

So it's more like building a new Zisco," added Bimha, pointing out that this was also a factor leading to delays in resumption of operations at New ZimSteel.

The Redcliff steel manufacturing firm suspended operations in 2008 at the height of economic meltdown.

It is hoped that operationalisation of New ZimSteel will ease the liquidity situation in the country through exports as well as supporting downstream industries, which at present are closed owing to operational constraints.

At its peak, Zisco employed more than 4 000 workers producing about 750 000 tonnes of steel annually.