ZISCO collapse leaves Zimchem on the brink

Zimchem Refineries is facing collapse after it lost 75% of its business due to the fall of Ziscosteel from which it is failing to recover.

An official said that the steel giant used to provide the company with coal tar, a by product from steel production which it used to manufacture chemicals such as creosote oil and benzene. It also used to produce tar that is used in road construction.

Mr Ben Mashangu CEO of Zimchem said that “The collapse of Ziscosteel in 2008 had slowed operations at the company. Ziscosteel used to provide 75% of our raw materials. After its collapse it basically meant we lost 75% of our business. We were left with 25% which is sustained by coke from Hwange Colliery and some imports. Those in timber industry are importing the creosote oil because we cannot meet the demand.”

The government sold 54% of its stake in Ziscosteel to Essar Africa Holdings Limited, an arm of India’s Essar Group in November 2010 but disagreements over mineral ownership held up the deal.

Mr Mike Bimha Industry and Commerce minister of South Africa last week said that government had issued a special grant to Essar for exploration work and given the company claims of iron ore in Buchwa and Redcliff.

Source – Newzimbabwe.com