Ziscosteel, Chinese firm agreement will not collapse

Published: 31 August 2017

THE Government has given assurance that the $1 billion Zisco/R and F Company resuscitation deal will not collapse as due diligence procedures were done before the winning bidder was selected.

Industry and Commerce Minister Dr Mike Bimha announced this week that the Government has secured a $1 billion investment for Zisco from a Chinese firm R and F Company.

It is hoped that the investment project will see one million tonnes of steel being produced in the next 18 months.

In 2011, the Government and Essar Global, an Indian conglomerate signed a $750 million deal to revive Zisco but the project fell through in 2015.

In an interview during her tour of Bulawayo industries on Tuesday, Industry and Commerce Deputy Minister Chiratidzo Mabuwa said Government was very thorough in its selection of the new investor for Zisco.

"It has taken us a lot of introspection, due diligence and learning from the mistakes that happened to the 2011 deal (Zisco/Essar). We were very thorough in our selection process in order to ensure that the deal does not collapse.

"Now we're at it and ready as you might have heard from Dr Bimha," she said.

The Government has kept discussions for a new Zisco investor under the wraps after it noted that initial negotiations with Essar collapsed due to, among other reasons, too much publicity.

Political bickering within the inclusive Government also contributed to the collapse of the deal.

Deputy Minister Mabuwa said: "There is a framework for implementation which will be made available to show the steps of roll out which will be in phases.

Zimbabwe's largest integrated steel producer ceased operating in 2008 due to serious financial challenges.

Zisco at its peak used to produce more than 50 000 tonnes of steel per month and employed between 6 000 and 8 000 workers.

It is envisaged that the Zisco/R and F investment might rise to $2 billion upon completion of all the implementation stages.

R and F Company is also involved in various investments spanning from mining, real estate and tourism.
- the herald

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