29 March 2008
Maputo — Maputo's steel rolling mill, paralysed for almost a decade, is now producing again, on an experimental scale, for its new owners, Arcelor-Mittal, the world's largest steel company.
Arcelor-Mittal has promised to invest 11 million US dollars in the mill (in addition to the purchase price of the once state-owned enterprise).
The director of the factory, Jose Marques, said the company will produce 35,000 tonnes of steel a year. This will take the form of steel rods for use in the construction industry.
The Minister of Industry and Trade, Antonio Fernando, visited the rolling mill on Friday, and declared his satisfaction at the resumption of activities. "I saw that the factory is producing on an experimental basis", he said, "and there's a guarantee that next month it will be formally inaugurated".
Some of the steel rods will be sold to local construction companies, while others will be exported, mostly to South Africa. Currently the steel mill employs 83 workers, a number that is expected to rise as full production resumes.
The mill has had a chequered history. Known as CIFEL, it came under state control immediately after independence, when its Portuguese managers had fled the country.
In 1992, CIFEL and the wire-drawing company Trefil were privatized. EMM, a company owned by Portuguese businessman Antonion Simoes, purchased 60 per cent of the two companies and promised massive new investment. Cifel's name was changed to the Mozambique Steel Company (CSM).
Between 1992 and 1994, these companies obtained 17 million US dollars in loans from five donors (Norway, Sweden, Switzerland, France and Germany) via what are known as "retrocession agreements" through the Mozambican treasury.
Despite this huge injection of funds, the fortunes of the two companies did not revive. Antonio Simoes, however, resurfaced putting together the consortium that in 1996 purchased 51 per cent of Mozambique's largest commercial bank, the BCM. Suspicions were raised, and never answered, that perhaps Simoes had used the treasury loans, not to rehabilitate Cifel/CSM and Trefil, but to purchase his stake in the BCM (which he sold on to the Portuguese Mello bank in 1998).
Starved of investment the two companies ground to a halt. In 2006, Arcelor-Mittal's South African branch negotiated the purchase of CSM and Trefil with the Mozambican government's Institute for the Management of State holdings (IGEPE), since the state still owned 40 per cent of the two companies. Arcelor-Mittal agreed to pay just 11.4 million dollars (much less than the treasury loans) for the CSM and Trefil assets.
Arcelor-Mittal has taken no responsibility for the debts left by Simoees. Back in 2006, an IGEPE spokesperson told AIM that the debts were being dealt with "separately".
Simoes has never set foot in Mozambique again. Eventually, after the matter had been raised persistently in some of the media, the embassies of Norway, Sweden and Denmark commissioned the accounting company Deloitte to look into what had happened to the Simoes loans.
Among the Deloitte findings was that Simoes had imported second hand "Equipment for a Screw Plant" from one of his own companies in Lisbon, which was just left unassembled in a yard at CSM.
None of the CSM/Trefil loans were ever repaid and, astonishingly, a further four million dollars of loans in "retrocession agreements" for CSM were handed over between 1995 and 1997 - mostly from the African Development Bank.
No legal action has ever been taken against anybody over this scandal.
Be the first to Write a Comment!
Copyright © 2008 Agencia de Informacao de Mocambique. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
