Defunct Zisco Blocking $200m Zimcoke Investment

THE defunct Zimbabwe Iron and Steel Company (Ziscosteel) has been accused of stalling a $200m investment by new coking company ZimCoke with no progress having been made two years after the deal was sealed.

ZimCoke was commissioned last year by then industry minister Mike Bimha but the company has still not started operating six months later.

The company is believed to have bought the coke making assets of Ziscosteel, comprising plant, machinery, land and buildings which are located within the latter’s Redcliff steelworks.

“The agreement to take over the coke division of Ziscosteel was signed over two years ago,” said Cross in an interview,” explained ZimCoke consultant Eddie Cross.

“The conditions precedent were all completed by June 2018 and the ground-breaking ceremony by the Minister of Industry followed.

“The company expected to take occupation of the site immediately and, in anticipation, the coke division site was surveyed.

“The results submitted to the Ziscosteel board and the request that they write to the (Redcliff) town council authorising the subdivision and transfer of ownership.

“Since then the Zisco Board Chairman, Mr (Nyasha) Makuvise has failed to comply with the request and is now in violation of the Agreement of Sale.”

ZimCoke has since sought legal recourse to find a lasting solution to the stand-off.

“This matter was taken up by the company lawyers who issued notice that Ziscosteel was in violation of the Contract and this expired in December 2018. The company is now preparing to fence off the site and to take formal occupation,” said Cross.

“However, although financial closure has been achieved the formal financial agreements cannot be signed until transfer of land buildings involved. Consequently, the transfer challenge has seen progress failing to take off.

“Therefore, no work has started, and the project is now 6 months behind schedule. The cost of this delay has been considerable and is escalating on the to the point where, if this impasse continues, the project could be jeopardized.”

The deal would have seen ZimCoke refurbishing the coking plant at a cost of about US$200 million.

In addition, ZimCoke also committed to investing in the struggling National Railways of Zimbabwe (NRZ) for rolling stock to move coke and coal to tune of about US $17million.

Cross further indicated that the company is committed to invest $25 million in a new gas fired-power plant to produce 25 megawatts of electricity in addition to pitting about $50 million into Hwange Colliery to ensure supplies of coal.

ZimCoke was also committed, “to invest $75 million in the Hwange Colliery Coke Division to bring them into production and also invest $12 million in Zimchem to enable the company to process all the products from the coke operations.

“This investment will take place over the next three years and will bring total production of metallurgical coke to 1,2 million tonnes per annum valued at $540 million per annum.”

Source : New Zimbabwe

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