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President Mugabe meets R and F company president Mr Zhang Li while the interpreter Ms Yi Chen (centre) looks on at State House in Harare— Picture by Tawanda Mudimu

THE $1 billion deal clinched by the Government for the revival of the country’s largest steel-maker, the Zimbabwe Iron and Steel Company (Ziscosteel), with a Chinese company is crucial to the economy and will impact positively on a host of downstream industries. The collapse of Ziscosteel at the height of the country’s economic challenges had serious ramifications for the well-being of companies like Lancashire Steel, the National Railways of Zimbabwe, Zesa and Hwange Colliery Company which had a symbiotic relationship with the giant steel-maker.

It has taken a long time to revive the company with the collapse of the Essar deal in 2011 casting a dark cloud over prospects of resuscitating operations at the Redcliff-based firm. In the intervening period, the country has lost a lot of scarce foreign currency in steel imports when the raw materials to produce the commodity are available locally.

The $750 million Essar deal collapsed largely because of bickering in the inclusive Government but the agreement clinched by the Government and R and F Company of China last month is expected to kick-start operations at Zisco because the environment is conducive for business as everyone is pulling in the same direction.

The project, which is expected to produce one million tonnes of steel in the next 18 months, might see the investment rise to $2 billion upon completion of all implementation stages. We reported yesterday that R and F president Mr Jang Li paid a courtesy call on President Mugabe at State House in Harare on Monday as part of expressing confidence in the deal.

Speaking to journalists after the meeting, Industry and Commerce Minister Dr Mike Bimha said the new Ziscosteel deal had full Government support. “We are looking at ultimately, when all these phases have been completed, we are looking at an initial injection of over US$1 billion and probably it will come to US$2 billion as we proceed,” he said.  “It’s not a small project. Much of what is there at Zisco won’t be used and their engineers have proved that probably it is about 15 to 20 percent of what is there that they will be able to use. Much of it is no longer in a state to be used, so they are also going to bring in equipment and technology that will see this project starting.

“They are already working, but this is really in stages. There is lot of technical work to be done. There are a number of engineers coming in different groups to look at the plant, but we believe that in the next 18 months we will be able to see the production of a million tonnes of steel.” Dr Bimha said R and F was not just interested in the rehabilitation of Zisco, but also expanding steel processing in the country, including production of stainless steel products.

Said Dr Bimha: “We have already agreed with them on their framework of the operation and they have had teams coming here for the past six months, engineers coming to do due diligence. We have had our team negotiating with them in China and also here. Our negotiating team was led by the chairman of Zisco Mr Nyasha Makuvise and a number of officials from various ministries. A month ago, I went to Guangzhou to represent Government in signing the agreement.

“What we were now doing is to look at how best to implement this project and today’s visit was more of the president of R and F to pay a courtesy call on the President. There is a lot of work to be done in ensuring that we finalise on the implementation matrix. There is also a lot of work to be done in terms of getting a number of ministries and Government departments to make their contributions in making sure that this project becomes a success.”

We welcome the investment by the Chinese company and are confident that it will finally lead to the resumption of operations at Zisco. The company needs to be restored to its former glory and provide much needed employment in the Midlands. The survival of the town of Redcliff depends entirely on the revival of Zisco and the announcement of the latest developments must come as sweet music to the ears of thousands of former Zisco workers who have been living in abject poverty ever since the company ceased operations.

We hail the Government for working hard to clinch the deal and urge authorities to ensure that it does not befall the same fate as the ill-fated Essar deal.

We are also glad that this time around, there is serious commitment from both the Government and investor who has pledged to see the project through. A lot is at stake and the sooner the project comes to fruition the better for economic revival efforts.