How the revival of ZISCO will solve half of Zimbabwe’s economic problems


Binga South legislator Gabbuza Joel Gabbuza has reiterated that if Zimbabwe revives ZISCOsteel it will have solved half of its economic problems.

Zimbabwe is planning to take over ZISCO’s $450 million debt to pave way for a Hong Kong based company to take over the steel maker.

Contributing to the 2018 budget in Parliament on Thursday Gabbuza said:  “If you sort out ZISCO Steel you have solved half the problems of Hwange Colliery because Hwange Colliery used to supply almost 50 wagons of coking coal every day to ZISCO Steel.

“If you sorted out ZISCO Steel, you have sorted out the National Railways of Zimbabwe because those wagons were providing a lot of revenue to the railways.

“ZESA is going to benefit because that Munyati Power Station was constructed specifically to supply power to ZISCO Steel.

“Studies have shown that the current blast furnaces that are used, if we sorted out ZISCO Steel we can still harness thermal energy from the heat at the top of the furnaces at ZISCO Steel so that will solve partly some of our problems of power…….”

Below is his full contribution

HON. GABBUZA: Thank you Madam Speaker. I have just five issues that I wish to raise with the Minister of Finance and Economic Development which he might consider in this current budget or he might wish to consider in future.

The issue of ZISCO Steel – I really wish the Minister could seriously think about the resuscitation of ZISCO Steel. I have said this before and I will continue talking about it because ZISCO Steel is half the solution to our economic problems. That is why when we went to school ZISCO Steel remained Zimbabwe Integrated Iron and Steel Company; it was not just Zimbabwe Iron and Steel Company.

I will indicate or show the Minister how integrated ZISCO Steel is into the economy of this country. If you sorted out ZISCO Steel, you have already sorted out Hwange Colliery Company.

THE HON. DEPUTY SPEAKER: Order, there is noise coming from that corner.

HON. GABBUZA: If you sort out ZISCO Steel you have solved half the problems of Hwange Colliery because Hwange Colliery used to supply almost 50 wagons of coking coal every day to ZISCO Steel. If you sorted out ZISCO Steel, you have sorted out the National Railways of Zimbabwe because those wagons were providing a lot of revenue to the railways. ZESA is going to benefit because that Munyati Power Station was constructed specifically to supply power to ZISCO Steel. Studies have shown that the current blast furnaces that are used, if we sorted out ZISCO Steel we can still harness thermal energy from the the heat at the top of the furnaces at ZISCO Steel so that will solve partly some of our problems of power.

There is the issue of the mining industry. This will be solved if we sort out ZISCO Steel because the presence of ZISCO Steel was affording explosives to be manufactured. That is why we have companies like Dyno Nobel because ZISCO Steel enabled Dyno Nobel to harness hydrogen produced at Sable chemicals. Now, Sable Chemicals is very key to our agriculture because it is the sole manufacturer of ammonium nitrate fertilizer from the simplest method of just trapping the air which we breathe in, separate it and produce fertiliser, but for them to do that they need the assistance of ZISCO Steel because ZISCO Steel is the one that used to buy oxygen produced from Sable Chemicals as a by-product and if they bought that oxygen, it made the price of ammonium nitrate fertilizer cheaper. That is why the whites on farms were able to produce in their agriculture at a low cost and were able to export. So, ZISCO Steel is still very key to the economy of this country.

Now, there are issues like the construction industry, obviously. The other day I was traveling – usually I use Mvuma road and I counted up to 107, 30 tonne trucks carrying steel from South Africa, which steel we could be manufacturing from ZISCO Steel – 107 trucks full of steel, that steel which includes angle irons and all these railway steel lines which could be manufactured in ZISCO Steel. So, if we resuscitate ZISCO Steel Madam Speaker, all or half of our problems are gone. The next problem is the issue of Kamativi, I wish the Minister should seriously look at Kamativi. There are 3 key minerals in Kamativi but the mine is closed right now. We have tantalite, the current mineral used for making cell phones and everyone the world over, has got a cell phone. All cell phone companies are busy looking for tantalite and the price of tantalite has gone up.

So we have a low hanging fruit just laying there, there are plenty of deposits in Kamativi and nothing is happening. Lithium is plenty in Kamativi and it is very important for cell phone batteries and for all the dry cell batteries that we are using these days. We know that in the next 3, 4 to 5 years, countries like Britain are saying they will not allow diesel and petrol vehicles in their cities, they will only allow battery powered vehicles. Everyone is moving toward batteries and we have a deposit of Lithium which is very key for battery manufacture and its plenty in Kamativi but nobody is interested in it. In the whole of this region nobody is mining Lithium. The largest deposit is there in Kamativi. We also have tin and the price has gone up mainly because of the wars. Tin is used for the manufacture of bullets and it is used by soldiers when they are carrying canned stuff. Considering the advent of wars in Syria, Middle East and Iraq, for us it means tin is going to fetch a lot of money and is currently at very high price.

These are the areas where the Minister must put money and make sure those mines are resuscitated. Number 3 is Hwange Colliery; it has the best coal in the sub-region, low sulphur coal, very high calorific value which means when you burn a gram of coal, you produce more energy than any other coal. We have coking coal for making coke which is needed in steel manufacture, we also have power coal for all the power stations we have in the sub-region. We have the best coal on Hwange. Now, I was just looking at the statistics, South Africa does not have coking coal, they need our coal and they use 100 000 tonnes per month, just South Africa alone. Zimbabwe produces more than that, we have even deposits in Lusulu, we have deposits in Lubu and Gokwe which have not been tapped but we have 100 000 of that coal required in South Africa every month. Per tonne of coke is US$300 and if you multiply US$300 multiplied by 100 000 that is already US$30m per month from South Africa alone. They are looking for this coal all over, it is not available expect in Zimbabwe and we have done nothing as a country to tap on this.

If you go to Hwange workers have not been paid for I do not know how many months. They are not even mining, the coke is there and they are bringing in private people to do the mining. Why do we not put money in Hwange to make sure we start producing and supply; South Africa alone will give us US$30m a month – [HON. MEMBERS: Hear, hear.] – There is no need for us taxing people 15% VAT and all these other small taxes because there is enough money in our minerals.

The next issue is the issue of industries, Madam Speaker; I was looking at how other countries have resuscitated their fortunes. Look at South Korea and others, we do not need to spread a lot of money all over, if we just strategically targeted a few industries, for example Dunlop, it was the only size16 tyre manufacturer in Zimbabwe. Actually, it is the only one that manufactures tyres in Zimbabwe or in the sub-region but we have allowed Dunlop to close. By so doing we have allowed Chinese sub-standard tyres to flood our markets. We all know that when these Chinese tyres come, it is accidents and we are using foreign currency to import. If you ask Dunlop how much money they need to resuscitate or to keep on going, perhaps it is far less than what we are using to import tyres. So, why do you allow such industries like Dunlop to close when it is the only tyre manufacturer in the sub-region and they have the best tyres?

Dunlop Zimbabwe was better than Dunlop South Africa because South African Dunlop was actually importing and relabeling our tyres but we allowed such strategic industries to close. The other area that we need to look at because we talk a lot about value addition, if we look at all the kitchen products, things that are used by our mothers in the kitchen, cooking oil et cetera, soaps and all these basic household commodities, they are all coming from South Africa and yet we used to manufacture them here. The other day I was looking for Buttercup margarine – Mazowe Drink is one of our best products and even if you go to South Africa, they will ask for Mazowe but we have allowed Mazowe manufacturer to close down or to go low and yet that is a major source. If we just did basic manufacture of kitchen commodities which every one of us needs, we would save a lot of foreign currency and we would create a lot of jobs. The market is already there because everyone uses these basic commodities. We do need to have time to put just a little bit of money to resuscitate these industries.

The Minister does not need to give them money, if a small amount of money of about US$10 million is set aside every year, for these industries to be borrowing at a low interest rate, they will be able to resuscitate their production and then we do not have to waste money importing things from South Africa. We do not even need this SI64, it is not necessary, we can make these things. We used to make them, when we made them they were better than the South African products. The last thing which I think the Minister must consider when he is doing his budget funding is to look at the models done by our development partners for rural development for people in the rural areas. We have seen a lot of good ideas by this programme called (SIG) Schools Infrastructural Grant, I think it is supported by UNDP and many other development partners, of course Government puts a small amount. That programme puts about US$4 000 per school and it has done wonders, schools, classroom, textbooks and benches are coming up. To ignore that sector and wait for parents to be supporting schools when they are failing to pay school fees, will be actually throwing away our education system into the dust bin – [HON. MEMBERS: Hear, hear.] –

I really propose that the Minister must set aside a small amount of money every year or in every budget. Look at the hospitals, there is what they call (RBF) Results Based Funding; all our clinics in the rural areas have improved and nurses are getting a small allowance as an incentive through this RBF and it is not more than US$4 000 per year that they get but the little that they get, they maximize the use because every clinic gets that kind of money and it is based on how they are performing; the more they perform the more they get. I really think instead of thinking big, the Minister must look at some of these ideas on funding rural development which can make a change, because we are seeing it ourselves as residence of those rural areas. I thank you very much Madam Speaker.

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