Zisco workers are said to have gone for 10 months without
salaries even after bold promises that Tagwirei’s takeover of the
Redcliff-based former steel behemoth would result in a quick turnaround.
Kuvimba took over Zisco two years ago after clinching a
management contract from the government in a move the authorities said marked
the beginning of a long-awaited resuscitation of what used to be Africa’s
largest steelworks.
The government picked Kuvimba under controversial
circumstances ahead of international companies after Finance minister Mthuli
Ncube railroaded the Zisco board to endorse the takeover by the Tagwirei-linked
mining outfit.
Cabinet claimed the decision was reached after an intense
technical and financial assessment by the Zimbabwe Investment Development
Agency (Zida).
Six companies including Kuvimba, had expressed interest in
reviving Zisco.
Others were Mhare Resources (Pvt) Ltd, PAI Capital,
Epikaizo Capital (Pvt) Ltd, Sebeuzani (Pvt) Ltd, and Africa Ferric Industrial
Company (AFRIC).
Under the management agreement, Kuvimba was supposed to
inject US$300 million in new capital to kick-start the rebuilding of the
steelworks while around US$1 billion would be raised organically from the
commercialisation of Zisco mining activities.
However, the much-touted revival of the sleeping giant
turned out to be a nightmare, especially for Zisco workers who have now gone 10
months without pay.
This is despite the fact that Kuvimba is selling stockpiles
of iron and breaking a disused plant to dispose of the steel, insiders have
revealed.
The money realised from the alleged asset stripping is not
being injected into the business, the sources said.
Kuvimba has also failed to inject the US$300 million it
promised.
“Kuvimba has cut down all the soaking pits and sold the
steel to a Chinese mini mill in Msasa, Harare,” one of the insiders said.
Soaking pits are plants used to further process raw steel
into billets and blooms.
The soaking pits form part of the line of production Zisco
says is no longer needed.
“They have sold over 1000 tonnes. Some of the steel was
sold to a company owned by Kuvimba,” added the source.
“A tonne of steel is around US$240 and none of what was
realised was paid to the workers.
“Instead of investing, Kuvimba is stripping the Zisco
assets.”
The steel was sold between November 2023 and January 2024.
Zisco has more than 200 workers.
Kuvimba is also alleged to have sold about 5.8 million
tonnes of ore to Dinson Iron and Steel Group, a Chinese steel company based in
Mvuma, which also produces steel.
The iron ore costs US$30 per tonne and that means Kuvimba
raised as much as US$174 million from the deal.
Before the Kuvimba takeover, Zisco was sitting on 800 000
tonnes of iron ore fines while Bimco Ripple Creek, a mining arm of the giant
iron and steel company had five million tonnes of the same.
The insiders said Kuvimba has not invested anything in
Zisco and the mining equipment, which they displayed when Vice President
Constantino Chiwenga visited the mine, has since been removed.
The equipment was supposed to resuscitate Zisco’s mining
arm, Bimco.
Kuvimba is said to be planning to sell limestone to Dinson,
which has only iron ore claims and doesn't have limestone which is a critical
component in the blast furnace to remove impurities.
Kuvimba holds some of Zimbabwe’s best mining assets that
were once owned by Tagwirei.
The government has been coy about how it took over the
assets from the tycoon amid speculation that it was a way of shielding them
from United States and United Kingdom sanctions.
Tagwirei is under UK and US sanctions for alleged
corruption and “state capture”.
Last month, there were revelations that the government’s
sovereign wealth fund – the Mutapa Investment Fund — had acquired Kuvimba to
end speculation about its links to Tagwirei.
The controversial Mutapa Investment Fund is said to be the
brainchild of Tagwirei, which he uses to shield his assets from sanctions.
Companies listed under the Mutapa fund are exempted from
following procurement regulations and development critics say it is a way of
hiding their procurement processes from public scrutiny and allowing looting
and arbitrage.
In recent years, Kuvimba has controversially acquired gold
mines, Fidelity Printers & Refineries, First Mutual Life, two banks, Zim
Alloys, and BNC in opaque privatisation deals involving the Zimbabwe Mining
Development Company done outside Parliament.
Kuvimba CEO Issac Machingambi refused to answer any
questions when contacted for comment.
“I am new to the job and it will be unfair to comment on
anything,” Machingambi said.
A month ago, the US likened Tagwirei to the notorious Gupta
brothers, who gained notoriety for being the alleged architects of state
capture in neighbouring South Africa.
He was among the 11 individuals, who were targeted in the
fresh sanctions imposed by US President Joe Biden under the Global Magnitsky
Human Rights Accountability Act sanctions programme on allegations of
corruption and abuse of human rights. Standard
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