Ziscosteel, Chinese investors and Zimbabwe’s poor record for negotiating investment deals

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 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 $650 million in two years, after an agreement that it would now control 80 percent of Zisco’s ore resources. However, Government again reneges on the deal.

Nov 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.

(432 VIEWS)