The prevailing water crisis in Masvingo City has stalled the re-opening of Steel Makers Company, popularly known as Simbi Pvt Ltd.
Masvingo City has been battling serious water shortage following the breakdown of two pumps at the local authority's main station at Bushmead.
The pumps have been taken to Harare for repairs and residents have been getting water through bowsers, two weeks on.
The re-opening of the company is set to earn the country about $1 million in sponge steel exports per annum once operations are resumed.
General manager, Mr Anandeeswara Baggam, said the company had received coal from Botswana and Chiredzi in the Lowveld, which was enough to start operation adding that close to 700 former workers would be retained.
He, however, said production was expected to resume last Saturday but it had been delayed by the prevailing water crisis in Masvingo, which has seen the city go for two weeks without running water.
Water plays an important role during production of sponge steel as the coal used in the manufacturing processes needs continuous moisture supply.
"We could have resumed operations on September 1 but the water crisis currently affecting Masvingo has made life difficult for us," said Mr Baggam.
He said the market for the company's products was ready although production costs made the prices not attractive but hoped that inflation would come down so that the company can operate profitably.
"We are disturbed by the inflationary environment that we are operating in here. Otherwise the market for our products is ready. We are accumulating our coal from Chiredzi and we received one truck from Botswana and more is coming. We need at least 100 tonnes of coal to use on a daily basis and as I am speaking I am in Chiredzi where I am mobilising more coal," he said.
"We are going to rehire all our former workers because we are planning to operate at 100 percent capacity from the start. We are now targeting next Saturday to resume operation and that will depend on the availability of water from Masvingo City. I will also visit them tomorrow over the issue to get an update."
The plant, commonly known as Sponge Iron and Mining Beneficiation Industries (SIMBI) Pvt Ltd, has been mothballed since 2015 due to a dip in prices on the international steel market.
At its peak, SIMBI used to employ more than 150 permanent employees and producing between 2 500 to 3 000 tonnes of sponge iron per month. The company is set to resume operations soon due to improved economic conditions now prevailing in the country. Besides directly employing around 150 people, SIMBI's revival would also lead to the re-opening of the Glenlivet Iron Ore Mine, about 35km east of Masvingo city along the Masvingo-Mutare Highway.
Another mine that supplies coal to the SIMBI plant has been re-opened in the Gudo area of Chiredzi, creating a further 140 direct jobs. SIMBI's re-opening, coupled with the planned revival of the Cold Storage Company plant in Masvingo and Mashaba asbestos Mine in Mashava, would further spur economic growth in the province through job creation and other attendant spin-offs. Mr Baggam said initially, his firm was planning to recruit 100 workers for the SIMBI plant in the city and between 70 to 100 workers at the Glenlivet Iron Ore Mine. A similar number will also be recruited at the firm's coal mine in Chiredzi. Iron ore from Glenlivet would be transported by road to the Sponge Iron plant in the city, while coal from Chiredzi is moved either by road or rail to the plant.