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Business Reporter

THE Zimbabwe Iron and Steel and Company (Zisco) has signed a management contract with Kuvimba Mining House (KMH), signalling a step in the right direction towards the long awaited resuscitation of once Africa’s largest integrated steelworks. 

In February, the Government selected Kuvimba, which already has vast mining interests in gold, nickel, chrome and platinum, to revive Zisco’s steel mills, which have been closed since 2008. Zisco used to produce one million tonnes of steel per year.

“The formal agreement has been concluded and it is for a management contract; no shares are exchanging hands,” Industry and Commerce Minister Dr Sekai Nzenza said in a phone interview last week. Government, through the industry ministry, owns 92 percent shareholding in ZISCO. The other stake is owned by a few minorities.

Kuvimba, on the other hand, is 60 percent owned by the Government through various state vehicles while the other 40 percent is owned by a private investor. Kuvimba managing director Simba Chinyemba was not immediately available for a comment. ZISCO has previously 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.

Dr Nzenza said the signing of the management contract agreement will pave the way for formal negotiations for a potential partnership between Kuvimba and SMS, the Germany-based company and one of the world’s largest steel-making companies.

The Government identified SMS to provide technical and financial support in a partnership that would help the revival of Zisco. “I am confident,” Dr Nzenza said.

“We have the raw materials (iron ore) and SMS has the technology, expertise and the capacity to train Zimbabweans to produce steel for local consumption and export.”

“The President (Mnangagwa) has given my ministry a mandate to revive Ziscosteel and produce steel locally (and) reduce the import bill.  The plant at Ziscosteel is old.”

A delegation from SMS, led by the group’s managing board member, Mr Michael Rzepczyk were in the country last month and met President Mnangagwa. Mr Rzepczyk said his company was determined to make a success story of ZISCO. Another delegation is expected soon. “We want to be a partner of Kuvimba and finally Zisco to bring the plant back into operation and to feed your market here and export markets and make a success story with steel here in the country,” said Mr Rzepczyk.

SMS is a family business with a history of more than 150 years as a technology leader in the steel industry. It has nearly 100 plants around the world – four in Africa and employees around 14 000 people. In El Marakb, Egypt and Senegal the company operates a mini mill and rolling mill for rebars and wire rods with respective capacities of 400 000 and 350 000 tonnes per annum.

In Oran, Algeria, SMS operates a hot and cold direct reduced iron plant with annual capacity of 2,5 million tonnes and another rolling mill for rebars, profile and wire rod in Prometal, Cameroon with annual capacity of 160 000 tonnes per year.

Zisco started operations in Bulawayo in 1938 after being formed by a private consortium.

In 1942, the colonial government formed the Rhodesia Iron and Steel Commission, a statutory body which took over the steel works. Four years later, a small plant was constructed in Redcliff and commenced operations in 1948.

Zisco gradually expanded and in 1975, the Rhodesia Iron and Steel Company was formed followed by a series of expansion programmes, which saw the commissioning of modern blast furnaces and installation of the first coke oven battery.

The expansion programme continued until 1975 when another blast furnace was commissioned, bringing steel works capacity to one million tonnes of liquid iron per year.

Other shareholders in Zisco are Louth Minerals SA (3 percent), Tonexin Investments (2,8 percent), Stewarts and Llyds (1,76 percent), Franconian Investments (0,81 percent), Amzim Limited (0,75 percent and Zimbabwe Investment Copper Ltd (0,13 percent).