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Senior Business Reporter
STEELMAKERS Zimbabwe needs $125 million to increase production at its sponge iron division in Masvingo to 2,500 tonnes per month, the general manager, Alexander Johnson, has said. At the moment, the plant is producing about 1,800 tonnes of sponge iron per month. “There is presently nothing much happening at Masvingo Sponge Iron Plant.
“We wanted to be in full swing production but operations are being affected by funding challenges.

“We need $125 million to operate at full capacity,” he said in a recent interview.
Johnson said their Redcliff-based steel plant was using 1,000 tonnes of sponge iron per month while about 800 tonnes were being supplied to the local and foreign markets.

He said Steelmakers Zimbabwe was exporting sponge iron to countries such as Kuwait and South Africa.
As part of efforts to raise the required funding, the Redcliff steel manufacturing firm early this year was reportedly said to be courting Indian investors to recapitalise operations of its sponge iron plant.

Efforts to raise the bulk of the required funding locally hit a snag due to the liquidity crisis in the economy.
Sponge iron is used as one of the most important and basic raw materials required for the production of various steel or iron based products. Sponge iron can also be used as a substitute for scrap.

Steelmakers Zimbabwe also plans to increase the capacity of its rolling mill in Masvingo three-fold from 2,800 tonnes per month.
And at the Redcliff steel plant, the firm was presently producing more than 3,000 tonnes of steel per month using iron ore from its mining operations.

The company hopes that production at Redcliff will increase if NewZim Steel (formerly Zisco) becomes operational and supplies the raw materials.
Industry and Commerce Minister Mike Bimha recently told delegates at the Zimbabwe National Chamber of Commerce annual congress in Victoria Falls that steel production at NewZim Steel was expected to start within the next two years after preparatory work to implement the project has been completed.

In 2011, the government and an Indian conglomerate Essar Global signed a $750 million deal to revive NewZim Steel 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 stalling progress on the Essar deal have been put to finality with the deal now at implementation, an important stage expected to pave way for resumption of operations at NewZim Steel.