Harare-Government Treasury has settled a US$47.8million Sinosure debt in a bid to clear the debts owned by the state owned by Zimbabwe Iron and Steel Firm (ZISCO) in a move to pave the way for new investors
On the 28th of May 2018, the Government enacted the ZISCO Assumption Bill, with the intention of clearing the company’s balance sheet.
The company’s debt assumption included US$218 million in overseas debt and ZWL$ 219 million in local debt.
Of the total foreign debt of US$218 million, US$211.9 million is owed to traditional external creditors, namely SINOSURE, KFW, and Japan, with the remaining US$6.1 million payable to external suppliers.
According to the recent annual public debt bulletin for the fiscal year 2022, both external and domestic debts have been paid in order to resurrect the company, which had ceased production in 2008 at the height of Zimbabwe’s economic meltdown and the remaining balance will be resolved under the arrears clearance debt relief and restructuring strategy framework.
“To date, Treasury has fully paid the debt owed to SINOSURE amounting to US$47.8 million, and the balance of US$164.1 million to KFW (Germany) and Japan will be resolved under the Arrears Clearance, Debt Relief, and Restructuring Strategy framework,” the Treasury said.
Domestically, a total of ZWL$ 184.5 million was paid following the validation and reconciliation procedure, leaving a balance of ZWL$ 34.6 million.
“Treasury is awaiting outstanding related documentation from ZISCO, to finalize the validation and reconciliation process for the remaining domestic creditors amounting to ZWL$34.6 million and external suppliers amounting to US$6.1 million,” said Treasury
The company plans to begin mining limestone and iron ore near Kwekwe by the end of this year as part of the preliminary foundation for resurrecting the defunct former steel behemoth.
Zisco, formerly the largest integrated steelworks north of Limpopo, stopped operations in 2008, having produced over one million tonnes of steel yearly and directly employed over 5000 people at its peak in the late 1990s.
Last year, Kuvimba Mining House, Last year, signed a management contract with ZISCO, a development that signaled a huge step towards the long-awaited resuscitation of the steel plant.
Zisco board chair Engineer Martin Manuhwa said: “We are in the process of engaging on the ground where mining operations and activities, especially limestone and iron ore mining are to start very soon.
“What we are just doing is dealing with what we call ‘onboarding’ issues where there is going to be a rollover to the management agreement implementation.
“We want to see more activity on the ground and there will be many of those our manager (KMH) is now on the ground and we are operationalizing the roadmap.”
“All (limestone and iron ore) mining operations should be in operation at the end of the year and then probably as we evaluate those we then migrate into more value addition.”
Following signing the management contract with Zisco, KMH has been completing all preliminary operations on the ground, such as planning and carrying out feasibility studies, such as the type of steel to be produced.
The mining company has also hired Strategen Company (SMS) of Germany as the principal consultant to promote Zisco’s resurrection.
KMH will invest $1 million in the steelmaking plant as part of Zisco’s resuscitation, separated into two segments: mining and steel.
Kuvimba also aims to establish Buchwa Iron Mining Company (BIMCO), Zisco’s mining arm, and such a project will need extensive exploration and feasibility studies to determine the amount of iron ore the mining arm possesses in its concessions.
Feasibility studies would also be conducted to determine the presence of additional minerals in
BIMCO’s concessions may be useful in the reconstruction of Zisco.