President Robert Mugabe on Wednesday officially relaunched the Zimbabwe Iron and Steel Company, renamed New Zimbabwe Steel Private Limited under new management by strategic partner Essar Africa Holdings.
The initial investment will be $750 million. The agreement also provides for the clearing of all outstanding arrears to wages and salaries.
After years of limping operations, the company shut down in 2008.
A crowd of more than 4,000 attended the ceremony in Kwekwe, Midlands province, which was also attended by Industry Minister Welshman Ncube.
President Mugabe took a swipe at successive management of Ziscosteel for neglecting the plant leading to its dysfunctional state.
“What disappoints us as a leadership are some of our people to whom we entrust the fate of our enterprise, plants or organisation. They sometimes disappoint not just us, but the nation as whole,” he said.
Sources said Essar Africa as strategic investor with a 54 percent stake in the former steel maker is now reaching out to the Zimbabwean diaspora seeking to recruit former employees with specialized skills to revive the firm.
ZimSteel Workers Committee Secretary General Takura Chikwiri said Essar management had promised to retain all current employees.
Ziscosteel collapsed in 2008 with hundreds of millions of dollars in debt after years of mismanagement.
Chikwiri said there is a lot of excitement in Kwekwe and surrounding Midlands towns over the industrial relaunch.
“Everyone here feels that we have been given a new lease of life and we are determined to revive this great company,” he said.
Economist Godfrey Kanyenze, director of the Labor and Economic Development Research Institute of Zimbabwe, applauded Essar’s move to tap the diaspora.
Essar’s US$750 million takeover of ZiscoSteel and its subsidiary firm, Buchwa Iron and Mining Company, had been stalled for four months due to a misunderstanding over the payment of some of the outstanding debts amounting to more than US$300 million.
The company is expected to pay all debts and appoint a new chief executive officer and board of directors within the next few weeks.