Govt places ZISCO under Mutapa Fund to jumpstart revival

STAFF WRITER

The government has transferred the dormant Zimbabwe Iron and Steel Company (ZISCO) to the Mutapa Investment Fund (MIF), the country’s sovereign wealth vehicle, in a renewed attempt to breathe life into the defunct steel company,Business Times can report.

The move, gazetted through Statutory Instrument 58 of 2026 under the Sovereign Wealth Fund of Zimbabwe Act [Chapter 22:20], formally adds ZISCO to the Fund’s Fourth Schedule and signals a decisive shift in the State’s strategy to revive the once-iconic industrial asset.

Authorities say the transfer is designed to inject fresh momentum into the long-stalled resuscitation of the steel plant by placing it under a single, powerful entity mandated to commercialise distressed State-owned enterprises.

The 89% state-owned steelmaker, which has stood idle for 18 years, now falls directly under the MIF umbrella—alongside Kuvimba Mining House, its previously designated revival partner—effectively ending years of fragmented oversight.

ZISCO’s collapse remains one of Zimbabwe’s most enduring symbols of deindustrialisation, marked by massive job losses and a trail of failed rescue efforts.

At its peak in the late 1980s and 1990s, the steel giant produced up to 1.2 million tonnes annually, employed more than 5,500 workers directly and supported an estimated 50,000 jobs across downstream industries such as construction, engineering and manufacturing. Its output not only met domestic demand but also generated foreign currency through regional exports, underpinned by rich iron ore deposits at Ripple Creek and coal supplies from Hwange.

However, the seeds of decline were sown early. As far back as 1981, the company was already recording daily losses of Z$1.25 million. A 1986 government inquiry exposed deep-rooted structural weaknesses, including mismanagement, poor planning and nepotism, while also revealing that critical refurbishment programmes had been neglected even before independence.

The 1990s compounded the crisis. The Economic Structural Adjustment Programme (ESAP) opened the domestic market to cheap steel imports, while tariff structures disadvantaged local raw-material producers. Better-capitalised South African competitors, equipped with modern technology, flooded the market, leaving ZISCO’s ageing and underinvested plant unable to compete.

By the early 2000s, the situation had become untenable. Chronic underinvestment left the plant reliant on outdated 1950s-era technology, while governance failures and the diversion of critical resources away from maintenance and modernisation eroded operational capacity. Costly contractual disputes further strained the company’s finances.

The final blow came in January 2008, when severe electricity outages damaged the blast furnaces beyond immediate repair, forcing a complete shutdown of operations. At the time, the company’s liabilities had ballooned to more than US$500 million.

Today, only a skeletal workforce of about 400 employees remains, maintaining what has effectively become a rusting relic of Zimbabwe’s industrial past.

Successive governments have repeatedly pledged to revive ZISCO, but each attempt has faltered.

In 2011, India’s Essar Africa Holdings signed a US$750 million deal to restore operations and create 3,000 jobs, only for the agreement to collapse amid financing disputes and policy inconsistencies.

A subsequent US$1 billion deal with China’s R&F Properties in 2017 also fell apart two years later after authorities reviewed and rejected the terms as excessively favourable to the investor.

Other prospective investors—including local consortia and unnamed Asian groups—failed to make meaningful progress.

In February 2022, Cabinet turned to a domestic solution, appointing Kuvimba Mining House as the preferred bidder. Kuvimba, which has interests in gold, nickel, lithium and platinum, committed an initial US$300 million, with plans to scale investment to US$1.3 billion over three years.

The strategy hinged on leveraging ZISCO’s iron ore resources to generate early cash flows to fund modernisation. Yet four years on, progress on the ground remains minimal.

The plant is still silent. No blast furnaces have been restarted, no significant rehiring has taken place, and the promised capital injection has yet to translate into tangible operations.

The same structural constraints persist—prohibitive capital requirements, unreliable electricity supply, governance challenges and the difficulty of mobilising large-scale financing in Zimbabwe’s constrained economic environment.

By placing ZISCO under the Mutapa Investment Fund, the government is effectively resetting the revival process—centralising control in the hope that stronger oversight, improved capital allocation and a commercially driven mandate can finally succeed where past efforts have failed.