Zisco revival on course, due diligence complete
Senior Business Reporter
THE revival of Zisco is underway and a due diligence exercise on how to resuscitate operations at the Redcliff-based steel manufacturing company has been completed.
Once the largest integrated iron and steel plant north of Limpopo, Zisco ceased operations in 2008. At its peak in the late 1990s the company produced over one million tonnes of steel per year.
As part of efforts to resuscitate Zisco, the Cabinet approved Kuvimba Mining House (KMH) as the investment partner of the Redcliff-based steel producer after the Government in February selected it as the investor for the defunct company.
KMH that has vast mining interest in gold, nickel, chrome and platinum with both private and State shareholding has been resuscitating closed gold mines and a case in point is the recent revival of Jena and Shamva operations.
Recently, Zisco and KMH signed a management contract signaling a step in the right direction towards the long-awaited revival of the former steel manufacturing concern.
In February this year, KMH was reported to have proposed to invest up US$1,3 billion over three years to breathe new lease of life into the mothballed State-owned Zisco.
In an interview last week, Zisco board chair Engineer Martin Manuwa said following the signing of a management contract with KMH, they have made some headway towards revival of the steel producer.
“We have made some progress in terms of the preparation that goes along with the roadmap because that was signed in to bring in the investment and managing contractor and a due diligence has been done on how to start the resuscitation as per the roadmap that we took.
“Basically, due diligence is a process where ever since the management contract was signed and partnership agreement signed, the parties moved in to look at technology map — looking at the at the technology and human capital and also the capital injection to be done as well the current state of the equipment, and how changes can be made and what needs to be done especially technology integration,” he said.
Eng Manuwa said due diligence was a critical process for deals such as the Zisco project with the investor was required to do technical due diligence before the deployment of investments and new materials for resuscitation of the plant.
“And this is the stage where we are at the moment.
“As soon as all the necessary mapping is done, which is very soon because it’s supposed to be three months after signing of the management contract and we signed it at the end of September.
“We are basically on the ground now, investors are doing the mapping and as soon as that is done in a month or so, we expect activities to be streamlined according to the approved due diligence plan and the business plan,” he said.
It is also hoped that the signing of the management contract agreement will pave the way for formal negotiations for a potential partnership between KMH and SMS, a Germany-based company and one of the world’s largest steel making firms.
The Government identified SMS to provide technical and financial support in a partnership that would help Zisco resuscitation as that foreign entity has the technology, expertise and the capacity to train Zimbabweans to produce steel for local consumption and export.
KMH is 60 percent owned by the Government through various State vehicles while the other 40 percent is owned by a private investor.
In recent years, Zisco has attracted interest from global steel giants including India’s Essar Holdings and Global Steel Holdings of India, South Africa’s ArcelorMittal and China’s R&F Group.