INDUSTRY and Commerce minister Mike Bimha has revealed that normal production at Lancashire Steel is expected to resume in the next six months after the injection of fresh capital by Essar Africa Holdings into New Zim Steel.
Victoria Mtomba Business Reporter
Bimha last week told journalists in Harare that the new investors had agreed to revive the Kwekwe steel plant.
“It has been agreed to revive operations at Lancashire Steel using imported feedstock over the course of the next six months. In addition, it has also been agreed to import certain steel products for sale through some existing Zisco or New Zim Steel distribution centres,” Bimha said.
Meanwhile, Bimha said workers at the beleaguered company would start receiving their outstanding salaries this week.
“Relief will start from next week thereafter,” Bimha said.
Ziscosteel chairman Nyasha Makuvise said the company was still working on the figures on how much would be given to the 2 800 employees.
The employees are owed $204 million in outstanding salaries and $110 million relates to employees’ liabilities.
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Essar is expected to construct a 600 megawatt power plant for the project and a beneficiation plant in Chivhu.
Bimha said NewZim Steel would be operational in the next two years under phase one of the project.
NewZim Steel is expected to produce 500 000 tonnes of liquid steel within 24 months under the initial phase and would increase to 1,2 metric tonnes per annum in the second phase.
The deal is a partnership between government and Essar Africa Holdings in which the Indian firm has 54% shareholdings.
The initiative is a first that government has tried to do in a bid to commercialise its parastatals.
