NEW INVESTOR FOR ZISCO | Govt has identified a new investor to revive operations at Zisco after the $750 million deal with an Indian conglomerate, Essar Global collapsed in 2015.
Zisco ceased operations in 2008 due to serious financial challenges.Efforts to revive the firm, which used to be one of the country’s biggest employers with over 3 500 workers and a major economic force, failed after the deal with Essar Global, which had committed to inject $750 million into the company encountered problems mainly due to huge debts and differences over mineral claims.
Following the collapse of the deal, the Government in March this year announced it had shortlisted six investors to take over operations at the country’s steel manufacturing giant.
Industry and Commerce Deputy Minister Chiratidzo Mabuwa told Business Chronicle in Bulawayo where she is touring companies that of the six investors one had been identified as suitable to revive operations at Zisco.
She said Industry and Commerce Minister Dr Mike Bimha would soon announce the new investor to revive operations at Zisco at the “right” time.
“We have prioritised the resuscitation of Zisco Steel notwithstanding all the lessons that we learnt from the previous deal (with Essar Global), which did not come through. Out of the six shortlisted potential investors, we have now identified what we considered as suitable partner.
“The partner is an investor from outside the borders of Zimbabwe but it’s premature now for me to make the disclosure, the honourable minister will make an announcement at the right time,” she said.
Speaking during a round table meeting at the recently held Mine Entra expo, Dr Bimha said efforts to revive operations at the country’s largest integrated steel plant were at an advanced stage.
“We are talking to investors and the talks are now at an advanced stage but we’ll be looking at an investor who focuses mainly on steel production without having the investor being involved in Lancashire Steel (the distribution of steel products)… so that the investor can just focus on steel production, and we hive off these companies which also give room to
local companies in this project,” he was quoted as saying.
He said one of the reasons why the Zisco/Essar deal did not succeed was because of “too much” publicity and a lot of time frames that were given regarding activity concerning the revival plan under the arrangement.
Dr Bimha is on record saying the revival of Zisco was a priority by Government as an economy without steel production would not be strong as it should be.