News / Local
Mnangagwa ally's company named in bid to revive Zisco
23 Feb 2022 at 05:49hrs | Views
GOVERNMENT yesterday said it had chosen Kuvimba Mining House, a company in which it has majority shareholding and is linked to President Emmerson Mnangagwa's ally, to revive the moribund ZiscoSteel.
The government created Kuvimba in 2020, in which the State pension funds and sovereign wealth fund hold 65%, to house its interests in platinum, gold and nickel mining.
Emails published by Sentry, a United States anti-corruption group, showed how Mnangagwa's ally, Kudakwashe Tagwirei orchestrated the company's formation, strategy and funded it.
Last year Kuvimba admitted its association with Tagwirei, but insisted that ownership had since changed to exclude the businessman.
Addressing a post-Cabinet media briefing yesterday, acting Information minister Joram Gumbo said government had chosen Kuvimba to revive ZiscoSteel which used to be the hub of steel production in Africa.
"Cabinet received an update on the resuscitation of Zisco-Steel as presented by the Industry and Commerce ministry. Cabinet informs the nation that due process was undertaken for the identification of an investor to partner in the operationalisation of ZiscoSteel," Gumbo said.
"The standard process to find an investor/partner for ZiscoSteel was undertaken under the guidance of Zimbabwe Investment and Development Agency (Zida) with input from the State Enterprises Restructuring Agency (Sera)."
"The nation is advised that initially nine prospective investors expressed interest and after a review by the executive management team, four bidders were shortlisted
"Furthermore, a due diligence exercise was carried out and the bidders were reduced to three. Out of the three, Kuvimba Mining House was recommended. Accordingly, Cabinet approved that Kuvimba Mining House be engaged as the investment partner for the resuscitation of ZiscoSteel."
Zisco stopped operations in 2008 amid allegations of mismanagement, corruption as well as obsolete equipment.
In 2020, the government revealed that the country was losing up to US$1 billion annually in steel imports after the closure of Zisco.
Zisco is 89% owned by the government.
"The nation is advised that Kuvimba Mining House is a reputable player in the mining and metals sector. Cases in point are the recent resuscitation of Jena and Shamva Gold Mines in Mashonaland Central province which has resulted in the company remitting a dividend to Treasury," Gumbo added.
In January 2018, the government took over a ZiscoSteel debt of about US$500 million in a bid to entice new investors and remove litigation hurdles.
Zisco's infrastructure, equipment and spares have either been vandalised, looted or become obsolete over the years the company has been redundant.
Previous efforts to turn around Zisco suffered stillbirths.
Meanwhile, Gumbo has said a joint venture has been entered to between Zimbabwe Mining Development Corporation (ZMDC) and Chandiwana Mines in the resuscitation of Sabi Gold Mine.
"Chandiwana Mines will inject the necessary working capital while ZMDC, will contribute mineral and material resources, the joint venture will contribute 1 428kg of gold," Gumbo said.
The government created Kuvimba in 2020, in which the State pension funds and sovereign wealth fund hold 65%, to house its interests in platinum, gold and nickel mining.
Emails published by Sentry, a United States anti-corruption group, showed how Mnangagwa's ally, Kudakwashe Tagwirei orchestrated the company's formation, strategy and funded it.
Last year Kuvimba admitted its association with Tagwirei, but insisted that ownership had since changed to exclude the businessman.
Addressing a post-Cabinet media briefing yesterday, acting Information minister Joram Gumbo said government had chosen Kuvimba to revive ZiscoSteel which used to be the hub of steel production in Africa.
"Cabinet received an update on the resuscitation of Zisco-Steel as presented by the Industry and Commerce ministry. Cabinet informs the nation that due process was undertaken for the identification of an investor to partner in the operationalisation of ZiscoSteel," Gumbo said.
"The standard process to find an investor/partner for ZiscoSteel was undertaken under the guidance of Zimbabwe Investment and Development Agency (Zida) with input from the State Enterprises Restructuring Agency (Sera)."
"The nation is advised that initially nine prospective investors expressed interest and after a review by the executive management team, four bidders were shortlisted
"Furthermore, a due diligence exercise was carried out and the bidders were reduced to three. Out of the three, Kuvimba Mining House was recommended. Accordingly, Cabinet approved that Kuvimba Mining House be engaged as the investment partner for the resuscitation of ZiscoSteel."
In 2020, the government revealed that the country was losing up to US$1 billion annually in steel imports after the closure of Zisco.
Zisco is 89% owned by the government.
"The nation is advised that Kuvimba Mining House is a reputable player in the mining and metals sector. Cases in point are the recent resuscitation of Jena and Shamva Gold Mines in Mashonaland Central province which has resulted in the company remitting a dividend to Treasury," Gumbo added.
In January 2018, the government took over a ZiscoSteel debt of about US$500 million in a bid to entice new investors and remove litigation hurdles.
Zisco's infrastructure, equipment and spares have either been vandalised, looted or become obsolete over the years the company has been redundant.
Previous efforts to turn around Zisco suffered stillbirths.
Meanwhile, Gumbo has said a joint venture has been entered to between Zimbabwe Mining Development Corporation (ZMDC) and Chandiwana Mines in the resuscitation of Sabi Gold Mine.
"Chandiwana Mines will inject the necessary working capital while ZMDC, will contribute mineral and material resources, the joint venture will contribute 1 428kg of gold," Gumbo said.
Source - NewsDay Zimbabwe
