‘Vultures’ are not waiting for the death of the Zimbabwe Iron and Steel Company (Ziscosteel), but are instead flying low for the kill, eyeing its mega-million assets, among them the steelworks’ real estate, it has emerged.
The first two installments in this series, where The Standard has been working with Information for Development Trust to expose alleged shady deals at the Midlands-based Zisco, revealed that government midwifed a controversial US$265 million takeover of the steelworks by ZimCoke, which paid only $1 in transfer fees.
Under the deal, ZimCoke is gunning to grab critical assets from the integrated Zisco — a state-owned enterprise — among them land, coke ovens, the railway line and stakes in essential subsidiaries such as ZimChem.
The current Zisco board led by Gift Mugano says ZimCoke is a “rogue investor” and is adamant that it will not allow the takeover because the purported seal flouted tender regulations and would effectively kill the steelworks, but ZimCoke insists it will not back down.
The Zisco board claimed last week that government, as the major shareholder, had recommended that the deal be revisited, but ZimCoke spokesperson and board member, Eddie Cross told The Standard that they had been given the go-ahead to upscale their work.
A document leaked to The Standard on Friday shows that the Zisco board had tasked its management to produce a close analysis of the possible impact of the ZimCoke deal, and the latter’s conclusion was that it would suffocate the resuscitation of the steelworks.
“The ZimCoke deal, in its current form, impinges on the resuscitation of Zisco, to such a serious extent that there will be no revival of Ziscosteel as an integrated steelworks as most of the plants are included in the ZimCoke domain and they will therefore be inaccessible to Zisco,” observed the company’s management.
Zisco cannot survive without its own coke batteries, coal supplies, the railway line, conveyor belt, gas holders, coke plant offices and workshop, refractory stores, the land on which it is sited, and water rights to Kwekwe River, among a host of other assets and enabling facilities that ZimCoke is gunning for, according to the management.
Documents and source testimonies showed that the ZimCoke deal also entailed the surrender of 400 general housing units, 15 executive houses, 48% shareholding in ZimChem, and all refractory materials, which were purchased by Zisco at the time they wanted to repair the batteries, pipes and electrical equipment.
The other assets that would go to ZimCoke are pipes, electrical equipment purchased by Zisco, granulated slag, which accumulated over the years and is used mainly by cement manufacturing companies, pig iron as well rail wagons at Dabuka and over 3 000 hectares of the steelworks.
A Zisco official who refused to be named said: “They (ZimCoke) want the houses from Torwood. Zisco has sold the houses and now remains with flats.
“So they are aiming to take over the flats and in the event Zisco is to be resuscitated, it will now have to rent flats for its workers from ZimCoke.
“The 15 executive houses are all that remains for the Zisco management.”
Paper trail has fingered several key persons perceived to be aligned to President Emmerson Mnangagwa that have already perched on Zisco properties.
July Moyo, Mnangagwa’s political sidekick for a long time and current Local Government minister, has been identified as one of the hawks eyeing Zisco assets.
Moyo, together with another Midlander and Mnangagwa ally, Daniel Mackenzie, was involved in negotiating the ZimCoke deal even though their roles remain hazy.
The minister has been occupying a Zisco house at Number 31 Orpheus Road from prior to the 2018 general elections and is reportedly negotiating to buy it, the same way Mnangagwa bought a house from the steel company about 20 years ago.
Mnangagwa has a house he bought from Zisco after renting it for some time, apart from buying Hotel Redcliff under unclear circumstances.
Moyo was reluctant to talk about his involvement.
“Talk to the people at Zisco,” he said, and dodged responding to specific allegations.
Mnangagwa’s ally, Arikana Chihombori-Quao, who is managing the president’s public relations in the US, took over Zisco’s Torwood hospital but it could not be immediately established if the purchase flouted any rules.
Chihombori-Quao, a medical doctor and activist, runs the US-based Bell Family Medical Centres and was recently removed by the African Union as its “permanent ambassador” to the USA.
In 2009, she attracted international condemnation for reportedly grabbing a white owned farm with the help of the Robert Mugabe government despite having lost her Zimbabwean citizenship when she became a US citizen.
At that time, Zimbabwean law did not permit dual citizenship.
“ZimCoke in its deal wants houses from Zisco,” a well-placed government official said. “This raises questions about why they would want houses, that Zisco still wants to use.
“They are an investor; they should build their own houses.
“It won’t be surprising that the deal is negotiated to allow some top officials easy access to the houses and critical assets when these are moved off the government company’s assets list,” said the source.
The official added: “Several questions have been raised as to why houses have formed part of the assets transfer to ZimCoke when Zisco also needs the resources to accommodate its own workers.”
But another official placed coal tar at the centre of the “vultures’’ interests.
Coal tar can be further processed to produce tar used for road construction, creosote, snake repellent and other related products.
“The need for high-grade coal tar started long back when a company, South Pole, which former president Robert Mugabe’s sons were believed to have a stake in, were targeting before the ZimCoke deal,” said the official.
The tar can be sold locally or within southern Africa for road construction.
“The Beitbridge-Chirundu dualisation project provides an easy market for the tar for ZimCoke to quickly break even,” the official added.
“That is the reason why it wants 48% shares in ZimChem (which processes the product) to influence the production of the tar.”
Cross denied allegations that ZimCoke was trying to grab Zisco assets and instead said their teams had stopped people from stripping the steel giant’s property.
“We have had a small team working at ZimCoke for over a year now,” Cross told The Standard.
“Their main task has been to stop the continuous theft of assets from the site — plant and equipment, scrap iron and cables.
“In addition, they have cut grass and fire breaks to protect assets and conveyor belts from bush fires.
“We have also sorted out all spares on-site and have started to prepare the site for the arrival of contractors.
“Offices have been renovated and we have had a succession of consultants on-site to look into what was needed to bring the plant back into production.
“All working drawings have been located and estimates of costs prepared. This has cost us close to US$1 million.”
– The Standard