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NewZim Steel plant in Kwekwe. The giant steel production plant is expected to be fully operational within the next two years

Oliver Kazunga Senior Business Reporter
STEEL production at NewZim Steel is expected to start within the next two years after preparatory work to implement the project has been completed, Industry and Commerce Minister, Mike Bimha, said yesterday.In 2011, government and an Indian conglomerate Essar Global signed a $750 million deal to revive Zisco (now NewZimSteel) but production at the steel plant was delayed largely due to political bickering in the inclusive government.

However, following the coming in of a new government last year, issues that had stalled progress on the Essar deal have been put to finality.

Responding to questions from delegates attending the ongoing Zimbabwe National Chamber of Commerce (ZNCC) annual congress in Victoria Falls, Minister Bimha said government had made significant progress towards putting to finality the Essar deal to pave way for the resumption of operations at the Redcliff based steel producer.

He said the deal, which was now at implementation stage, was expected to take some time before production begins.

“The Essar deal has been concluded and finalised, we are now at implementation stage. It will however take some time before NewZim Steel starts operating as it should be taken into consideration that the company has not been running for quite a long time,” he said.

The Redcliff steel firm suspended operations in 2008 at the height of economic meltdown.

He said as a result of the progress made since the coming into power of a new government, a number of foreign investors, mainly from India, had shown keen interest to invest in different sectors of the economy.

Minister Bimha told Business Chronicle on the sidelines of the congress that there was a lot of preparatory work being undertaken to revive operations as well as ensuring that NewZim Steel employees have jobs.

“Essar have come up with a new revised plan for the steel company and we are now at implementation stage. This stage involves reconstruction of the steel plant. Almost 60 percent of what was Zisco is going to be replaced,” said Bimha.

“There is also an exercise which is presently underway to assess skills levels. We are also looking at activities where NewZim Steel will import steel billets and feed them into Lancashire Steel. Essar and the Zimbabwe Mining Development Corporation (ZMDC) will during this implementation stage partner to explore and mine iron ore in Chivhu. All this work which has started is preparatory work for the eventual steel production within the next 24 months.”

He said government was also looking at possible areas where Essar could mine coal that would be fed to the Redcliff blast furnace.

At its peak, Zisco which is a strategic firm for the country’s economy, employed more than 4000 workers producing about 750, 000 tonnes of steel per year.

It is envisaged that the operationalisation of NewZim Steel will go a long way towards improving the liquidity situation in the country through exports as well as supporting the viability of other downstream industries which at present are closed owing to operational constraints.