Cabinet has announced that Kuvimba Mining House is to take over Ziscosteel, the country’s collapsed steel maker. This is only the latest in a long series of attempts by the government to revive the company.
Here, in this timeline, newZWire traces the fortunes of the company from its formation, its glory years, Zisco’s collapse under mismanagement and corruption, plus all the numerous attempts to rebuild it.
1938 – The first commercial production of iron and steel begins after a group of businessmen in Bulawayo import an electric arc furnace with a capacity of 12 000 tonnes.
1942 – The Rhodesian Iron and Steel Commission (Riscom) is established at Redcliff, taking advantage of the deposits of iron ore and limestone.
1950s – Riscom is making losses, but its fortunes turn after the formation of the Federation of Rhodesia and Nyasaland opens up a larger market for its steel. A consortium of private investors, the Rhodesian Iron and Steel Company (Risco), then takes over the operation and the colonial government becomes a minority shareholder. Among the shareholders are Anglo American Corporation, Stewarts and Lloyds (SA) and Lancashire Steel (UK).
1960s – Risco becomes a key industry for the country as Rhodesia, after the Unilateral Declaration of Independence, looks for import substitution to counter international sanctions. By then, its workforce is over 2000.
1980 – The company is renamed Zisco at Independence. It is now directly employing 5 500 people and some estimates say it employs some 50 000 more in support industries.
1984 – Zisco is now the country’s largest foreign exchange earning manufacturer and is top on the list of Government subsidies. The size of its subsidy is almost two percent of GDP.
1986 – The problems begin to show. An official enquiry into operations discovers “mismanagement, poor planning and nepotism” at the company. The report also finds that refurbishment of the steelworks had already been lacking before Independence, and that further delays are making the plant more expensive to run.
1993 – Zisco’s blast furnace Number 4, which produces 70 percent of the company’s steel, breaks down. The company is now operating only at 30 percent capacity, and starts laying off workers. Domestic market flooded by finished metal brands from more efficient producers from the region as ESAP tariffs are more favourable to imported finished products than raw materials for local producers.
1994 – A Z$700m deal is negotiated with a consortium of British and French investors for the rehabilitation of Blast Furnace 4, a project that is to take 16 months.
1996 – A Chinese firm offers to do same job of refurbishing Zisco at a cost of Z$500m, and promises to do it faster. That same year, for the first time, a formal study is commissioned on privatisation of Zisco and Government’ sell-off of its 91 percent stake.
1997 – A new sinter plant is installed. The plant is meant to feed Blast Furnace Number 4 when it is repaired, but this never happens and the sinter plant remains a white elephant.
2000 – Zisco is operating without a fully constituted board and its blast furnaces were no longer functional while its plants and equipment were now obsolete.
2005 – Auditors discover money from the sell-off of Zisco’s foreign subsidiaries is missing. The National Economic Conduct Inspectorate hands Obert Mpofu, then Industry Minister, a dossier on corruption. Mpofu tells a Parliamentary committee that the dossier “contains names of my colleagues in the ministry, MPs and employees at Zisco”. But Didymus Mutasa, then Security Minister, later says the report “does not exist”. Mpofu himself then backtracks on his own words.
A report implicates Vice President Joice Mujuru, who is said to have received 30 000 litres of fuel from Zisco for her celebrations after she was elected vice-president a year earlier. Zanu PF got 30 000 litres of diesel and 30 000 litres of petrol for its 2003 conference worth Pula 64 860 and P59 310 respectively.
2008 – Zisco announces it is stopping all operations.
2008 – ArcelorMittal South Africa, Africa’s biggest steelmaker, says it would consider buying Zisco if it is put on the market. “We would be interested, but it’s early days. The Zimbabweans haven’t made clear what their intentions are,” CEO Nonkululeko Nyembezi-Heita says. Finance Director Kobus Verster says: “Extensive refurbishment work would be necessary at the Zimbabwean plant, which isn’t producing anywhere near its full capacity”.
2009 – 12 companies bid for Zisco; Jindal Steel, Sino Zimbabwe, Essar Africa Holdings Limited; Sovereignty Capital, Arcelor Mittal, China Metallurgical Group Corporation, Arcadia Steel Energy and Mining, Apollo Steel, Zimlantic Export & Import (Pvt) Ltd, Posco, AMC Corporation and Murray & Roberts. Government rejects bids from Arcelor Mittal South Africa, a unit of Lakshmi Mittal’s Arcelor Mittal, and Jindal Steel & Power of India; a technical team says the two steel giants are too big and “could overwhelm Ziscosteel and work against the wishes and interests of the country”.
2010 – Essar Africa emerges as a winner of the tender. The deal is finalised in August 2011, where Essar is to inject $750 million in fresh capital while Government takes over the company’s $340 million debt.
2012 – Government says it wants to renegotiate the deal after it realises Essar expected control of iron ore reserves.
2014 – Essar Africa says it will build a new 500,000-tonne steel plant at Ziscosteel for $750 million in two years, after an agreement that it would now control 80% of Zisco’s ore resources. However, Government again reneges on the deal.
2015 – Finance Minister Patrick Chinamasa confirms during a budget speech the collapse of the Essar deal and says Zimbabwe is again scouting for an investor to revive Ziscosteel. Chinamasa says that all Zisco’s employees would have their contracts terminated on three months’ notice, with effect from December 1, 2015.
2017 – Government announces it is negotiating a deal with R&F, a real estate company from China, to revive Zisco. According to then Industry Minister Mike Bimha, the deal would see investment of up to US$2 billion. The deal soon collapses.
2017 – ZimCoke, a company represented by Eddie Cross, agrees to take over KfW’s US$225 million debt in exchange for access to Zisco’s coke oven battery. A new board cancels the deal in 2019, citing corporate governance breaches.
ALSO READ | Mthuli’s TSP scorecard | Two years ago, he pledged to privatise parastatals. Fail. His plan never left the station
2018 – Against fierce criticism from the opposition, government pushes through the Zimbabwe Iron and Steel Company Debt Assumption Bill, under which the taxpayer takes on US$500 million of Zisco’s debts.
2020 – Gift Mugabe resigns as Zisco chairman, citing attempts by Finance Minister Mthuli Ncube to muzzle his public criticism of the Minister’s economic policies.
2022 – Government announces Kuvimba Mining House as the winning bidder for the takeover of Zisco.
ALSO READ | The big steel steal: Kuvimba bags Zisco, but the miner’s big prize may lie beneath