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Business Reporter
GOVERNMENT has put in motion a comprehensive strategy to establish a robust steel making industry with discussions in progress for the resuscitation of ailing companies within the sub-sector.

The strategy, crafted in line with Government’s economic blueprint, the Zim-Asset, will see the development of a steel making industry in the country.

According to Zim-Asset, in the manufacturing sector, Government is committed to resuscitating distressed and closed companies with a view to increasing capacity utilisation to optimum levels, generating employment and substituting imports as well as building a sustainable basis for export led growth.

The resuscitation and growth of the manufacturing sector will be premised on the resumption of operations at Ziscosteel, Zimchem and Lancashire Steel. Growth will also be premised on the establishment of new iron and steel companies.

“We have invited interested investors to look at the bigger picture of steel making. And we have had a number of companies who have expressed interest,” said Minister Bimha.

Government is conducting due diligence on potential investors from China, India and Africa, but Minister Bimha did not disclose the identities of the parties saying the discussions are at a delicate stage. Locally, Government is in discussion with suppliers of coke and associated by-products, including Hwange Colliery, to work out a scheme to supply raw materials to Zimchem Refiners which is expected to see the revival of the Kwekwe-based chemical manufacturing firm.

The discussions, according to Industry and Commerce Minister Mike Bimha, are part of a wider strategy to get the steel making industry in production. In pursuit of this, Minister Bimha said, discussions are ongoing for suppliers to work out a scheme with Zimchem.

“We are looking at resuscitating Zimchem. Therefore we are in discussion with Hwange Colliery and other local producers to see whether they can resuscitate Zimchem,” said Minister Bimha.

Zimchem’s major raw materials such as crude tar and Crude Benzole are by-products from coal coking processes and its major suppliers of raw materials are Hwange Colliery Company Limited, Ziscosteel and Hwange Coal Gasification Company. Zimchem is the sole manufacturer of road tars, industrial solvents and wood preservatives and is expected to play a key role in infrastructure development particularly road construction.

“We are now at the verge of seeing the beginning of the dualisation of the Beitbridge–Harare-Chirundu highway and that will require a lot of raw materials. Zimchem can be one of the champions for that project. If Zimchem can be resuscitated and there is an off take arrangement for its products into the road construction it will be big business,” said Minister Bimha.

The steel industry is expected to restore thousands of jobs and create downstream industries.

Already, Government is working on engaging an independent consultant to assess reports presented by potential investors interested in the Zimbabwe Iron and Steel Company before any deal is signed.

“We have agreed with the Minister of Finance and Economic Development and the Minister of Mines and Mining Development that we must also look for an independent consultant to assess whatever investors tell us. We need someone else who is independent of the investors to confirm so that we do not make decisions based on only what the investor says. This is necessary so that we engage investors from a position of strength,” said Minister Bimha.

No independent assessment was done in 2010 at the time when Essar agreed to buy 54 percent in the steel making company. Government would have retained 36 percent with the raining 10 percent going to minority investors.

However, a number of technical glitches stalled the deal.