Zimcoke deal hangs in limbo

By William Milasi

Failure by the now defunct steel works integrated giant Zisco Steel to transfer ownership of land and buildings to a coking company ZimCoke premised within the company has stalled progress.

ZimCoke was commissioned last year by then industry Minister Mike Bimha following the Agreement of Sale in 2017 between Zisco and ZimCoke.

The coking company is believed to have bought the coke making assets of Zisco consisting of the plant, machinery, land and buildings associated with the infrastructure of the coke making processes.

The company Chief Executive Officer Bill Moore also indicated that as part of the agreement with Zisco, ZimCoke was taking over a $225 million debt owed to German government development bank KFW which was owed by the parastatal.

Now six months on ZimCoke Consultant Eddie Cross has said there is no production on the ground due to the property transfer challenges.

“The agreement to take over the Coke Division of Zisco Steel was signed over two years ago. The conditions precedent was 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 and the results submitted to the Zisco Steel board and the request that they wrote to the Town Council authorizing the subdivision and transfer of ownership. Since then the Zisco Board Chairman, Mr Makuvise has failed to comply with the request and is now in violation of the Agreement of Sale,” Cross said in an interview.

He highlighted that ZimCoke then sought legal recourse to find a lasting solution to the standoff.

“This matter was taken up by the company lawyers who issued notice that Zisco Steel 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.

“However, although financial closure has been achieved the formal financial agreements cannot be signed until transfer of land buildings involved,” Cross said.

Consequently, the transfer challenge has seen progress failing to take off.

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

The investment by the coking company involves the refurbishment of the coking plant to the tune of US$ 200 million.

The company also committed to invest in the struggling National Railways of Zimbabwe (NRZ) for rolling stock to move coke and coal to US $17million.

Redcliff Municipality is also expected to benefit as the company is commuted to pay $5million for water supply.

Cross also said that the company is committed to investing $25 million in a new gas fired power plant to produce 25 megawatts of electricity.

The coking company also expressed interest in investing $50 million in Hwange Colliery to ensure supplies of coal.

Cross further explained that once the project takes off ZimCoke is 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.”

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