Ziscosteel requires $1bn to kickstart operations

2018-06-16

Jun. 15, 2018 - PARLIAMENT has recommended that the country’s rail system should be repaired to enable transportation of coal supplies to companies such as Ziscosteel.

This came out in a report on Ziscosteel which was presented in Parliament last week by the Mines and Energy Portfolio Committee, where MPs also said the steel company needed $1 billion investment for its revival.

MPs said during their investigations of Ziscosteel, they found very dilapidated machinery and use of very archaic 1940s technology, which made it more difficult for the company to get spares for its machines.

“The company requires $1 billion to start operations as the money will go into servicing of the blast furnaces, coke ovens and also a new oxygen plant system as it no longer has to rely on Sable Chemicals for its oxygen supplies,” the Mines committee report said.

“It is imperative that the railway system be repaired in order that coal may reach Ziscosteel effectively and efficiently.”

Some of the machinery said to be in a state of disrepair at Zisco included coke batteries and rolling mills.

Specialised workers left the company as they were not being paid their salaries.

The committee also recommended that iron ore, which was still in abundance at Zisco, must be sold in order to recapitalise the company. They said of the obsolete equipment, only 20% to 30% should remain.

Although some of the blast furnaces at Zisco were said to be decommissioned in 1999, the committee report said from an engineering point of view, there were still some expensive foundations at Zisco already in place and certain ancillary plants that are not damaged that can still be used.

At maximum production, Ziscosteel used to produce for export, and on annual basis used about 900 000 tonnes of coking coal.

“The steel industry is much dominated by China that is now producing about 50 percent of total world production of steel that is over a billion tonnes per year. That is impacting on international steel prices,” the committee said.