stainless steel rods 29-09-10.jpgThe business community has welcomed the sale of government’s 60% stake in Ziscosteel to Mauritian firm, Essar Africa Holdings, as a positive move in the revival of the steel making company and the country’s economy. 


The US$750 million deal in which government will transfer 60% of its 89% stake in Ziscosteel to Essar Africa will relieve the government of a US$300 million debt and resuscitate the parastatal.


The 60% government stake sold to the Mauritian firm translates to 54% shareholding in the steel giant.


Analysts say the revival of Zisco should create jobs and services in the Midlands which are anticipated to trickle to downstream industries.


Zimbabwe National Chamber of Commerce past President, Mr. Phil Jumbe, said the disposal of a 54% stake is a good move as the huge debt was not healthy for government.


“By bringing a partner the company will be able to recapitalise and this will unlock the potential of Zisco leading to the recovery of the economy as a whole.”said Mr Jumbe.


At its peak, Zisco produced 1 million tonnes of steel per year while employing 4 000 workers.


Economic Analyst, Mr. Godfery Dupwa said the revival of the iron and steel company should also benefit the local construction and mining industries and the economy at large, highlighting that the move is a precedent which other ailing parastatals should emulate.


Essar Africa will undertake resuscitation work including realigning blast furnaces and repairing coke oven batteries. The deal also covers shareholders investment and future plans.