Kwekwe — THE Zimbabwe Iron and Steel Company has stopped operations and is now depending on selling scrap metal to generate income and its workforce has slumped from 4 000 at its peak to less than 1 000.

The company is also surviving on selling coke breeze and chilled pull that had accumulated over the past 40 years.

A visit by The Herald last week revealed a sorry state of affairs at the once giant steel maker, whose residential compound now resembles a ghost town.

Blast furnace number four, the only one functional, was switched off last year.

Blast furnace number three has been down for years.

These furnaces are supposed to operate non-stop for at least eight years to avert contraction and collapse of inside brick lining.

Over US$12 million is needed for the re-alignment of blast furnace number four only and a Chinese company, China Shougang International, has been contracted to do the job.

Lack of funds has stalled progress though Ziscosteel recently received 60 percent of the re-aligning materials from China.

The material comprises special blast furnace bricks.

Coke ovens should run continuously for about 20 years, but are not functional and require major repairs that cost millions of dollars.

The company has an accumulated three-month salary backlog and has placed its employees on a compulsory rotational two-week duty roster.

Employees are only paid for the two weeks that they report for duty and are struggling to make ends meet.

At its peak, Ziscosteel employed 4 000 employees, but at the moment management says the company has around 2 000 workers, while work-

ers say the workforce is less than 1 000.

The majority of the skilled personnel such as engineers and artisans have left the company en-masse for greener pastures elsewhere.

Ziscosteel is capable of producing between 700 000 and one million tonnes of steel annually, but presently no production is taking place as major infrastructure has collapsed.

Both Industry and Commerce Minister Welshman Ncube and Ziscosteel chief executive officer Mr Alois Gowo confirmed the company was in dire straits.

Indications are that production might resume around February next year.

Employees report for duty for "housekeeping purposes" save for those preparing for the re-alignment of blast furnace number four.

In an interview on Wednesday, Mr Gowo attributed the company's collapse to the illegal US sanctions, electricity and water shortages experienced last year.

He confirmed Ziscosteel had a backlog in salaries and expects to pay its employees July salaries this month.

Mr Gowo confirmed that employees were on a rotational two weeks duty roaster saying the move was meant to avert retrenchment

He said the arrangement would be in place up to December this year.

Ziscosteel was lagging behind in paying Shougang International, which was awarded the re-aligning contract in 2007.

"We lost total production of hot metal in January 2008 because of power and water shortages. Blast furnace number four went cold. In November last year we abandoned resuscitating the blast furnace opting for re-alignment," he said.

Mr Gowo said Ziscosteel had so far paid Shougang International US$5,3 million out of the US$12 million.

"We met with Shougang International officials including its president in Harare last month and we signed a Memorandum of Understanding that we pay them US$1 million in August and September and another US$1 million in November," he said.

Mr Gowo said re-alignment of blast furnace number four was expected to start in December this year and it would be commissioned in February next year.

"We are discussing with one local bank which indicated that they will be making available that facility so that we meet conditions set by the Chinese," he said.

Mr Gowo said about US$4 million was needed to repair the coke oven batteries and Ziscosteel was currently looking for possible financiers.

There are indications that a number of companies are interested in assisting the company repair its coke oven batteries.

News of the dire straits that have hit the giant steelmaker, impacting heavily on both the local community of Redcliff and the national economy, comes after Government had pumped around US$100 million into Zisco in a bid to rejuvenate its operations.

Industry and Commerce Minister Prof Ncube confirmed Government had pumped millions of dollars into Ziscosteel, but the company was still not operating.

He said the parastatal had resorted to selling scrap metal for survival.

"Zisco has not been producing since last year. They have just been selling scrap while trying to refurbish blast furnace number four.

"When they shut down last year, it was for purposes of re-aligning the blast furnace, which was the only one which was still working."

Minister Ncube said Government arranged loans for Ziscosteel on several occasions, but no meaningful production had materialised.

"Government organised loans for Ziscosteel before the formation of the inclusive Government. Every time money was pumped in, it went into a bottomless pit," he said, adding that they had poured US$100 million into the company to date.

"Government cannot give more and more money when it is basically broke," he said.

The minister said Government was considering a number of options among them selling its stake in the company.

He said five companies were bidding for Zisco among them Kwekwe-based SteelMakers Zimbabwe (Pvt) Limited, Murray Roberts and Gateway.

Also vying for Zisco are Reclamation Group of South Africa and India's Sunflag Iron and Steel Company.

There are reports another Indian company - Arcelor Mittal, the world's largest steel company - is also interested in Ziscosteel as well as China's Metallurgical Construction Company.

Reports say SteelMakers has made a joint bid of US$180 million with Sunflag Iron and Steel Company to take over Ziscosteel after Government invited bids from local and foreign investors to revive Ziscosteel.

Unconfirmed reports also link corruption and poor corporate governance to the state of the steel company.

In 2006, the then Minister of Industry and International Trade, Obert Mpofu told a parliamentary portfolio committee on Foreign Affairs, Industry and International Trade that the steelmaker had been looted by unnamed legislators and other senior company and government officials.

He later backtracked on his allegations and was subsequently charged for contravening a section of the Privileges, Immunities and Powers of Parliament Act.

Minister Mpofu made the corruption assertions while giving evidence on the management contract awarded to Global Steel Holdings and Ziscosteel that collapsed after the Indian firm did not release any of US$400 million as had been contractually agreed.