/ 31 October 2013

Zim: Stalled deal shafts steel workers

Hard times: The Redcliff plant has been idle for years as a result of squabbling over the price of the acquisition
Hard times: The Redcliff plant has been idle for years as a result of squabbling over the price of the acquisition, leaving workers destitute. (Aaron Ufumeli)

A faded Coca-Cola billboard mounted on the side of the road, with a barely visible ­“Welcome to ­Redcliff”, is the only sign of entry into the hub of Zimbabwe’s steel industry.

A white inscription written underneath this reads, “The Steel” and a Zanu-PF campaign poster covers the rest of the inscription. You can just make out the word “Centre”, perhaps a gentle reminder to visitors by the town’s fathers that Redcliff “The Steel Centre” hosts the Zimbabwe Iron and Steel Company (Ziscosteel), renamed New Zimbabwe Steel in August 2011.

On the road to the Ziscosteel plant incomplete houses, without windows, tell a silent story of abandonment and dreams deferred by would-be homeowners. It has been more than two years since Indian steel conglomerate Essar Holdings acquired a 54% controlling stake in Ziscosteel, winning the bid ahead of South Africa’s Arcelor Mittal and another Indian rival, Jindal Steel.

At the time, the Essar deal, by which the government would keep a 40% stake, was touted as the single largest foreign direct investment in the country following Zimbabwe’s prolonged economic collapse since 2000.

Essar paid $750-million for Ziscosteel and the terms of the deal also included clearing the $240-million debt owed to KFW of Germany, paying $55-million for the government’s stake and investing $65-million in refurbishing blast furnaces 3 and 4. Essar would also invest in the renewal of a coke oven battery and human skills development and invest at least $355-million in fresh capital, while paying workers’ outstanding salaries.

President Robert Mugabe officiated at the handover, which was marked by pomp and fanfare. Two years later, production is yet to kick off at the steel plant, which, at its peak, produced nearly 1-million tonnes of steel annually and exported to South Africa and Zambia.

Many promises, nothing fulfilled
“So many promises have been made, but nothing has been fulfilled, and in the meantime, we are suffering,” said Thomas Ngulube*, who has worked at Ziscosteel for 24 years. An artisan blacksmith by profession, Ngulube said most workers left the steel plant at midday to “look for food and water”, although the official knock-off time was 4pm.

“The workers are dejected, and it shows in the unsafe work clothes we put on,” said Ngulube, pointing to his torn black boots.

About 3km away from the steel plant, the sleepy town of Tourwood is home to the majority of Ziscosteel workers. Here, and in the adjacent town of Redcliff, there has been no running water for the past week. Groups of women carry water sourced from the steel plant in 20 litre plastic containers on their heads to be used for cooking and bathing.

The only health facility in Tourwood, the Tourwood hospital, has not been in operation for the past 10 years, with a makeshift polyclinic serving as the only source of medical treatment. Understaffed and ill equipped, the clinic is unable to serve workers and their family members who succumb to illness and malnutrition.

“There is a high rate of stress; workers suffer from high blood pressure and strokes. The situation has been going on for too long,” said Misheck Mashedze, a Ziscosteel employee for the past 12 years.

“Some of those that returned from the diaspora have left and those who can’t do so regret coming back. They have lost their jobs in the diaspora, and there is nothing for them here.” Salary payments to workers have been erratic, as Essar attempts to iron out differences with the government over mining claims.

Negotiations persist to break the deadlock
The Buchwa Iron Ore Mining Company, (Bimco) owns most of the known iron ore reserves, estimated to be worth more than $30-billion, but these were not accounted for in the sale of Ziscosteel, which the government now argues would be given away for a song as Essar had to pay only $750-million.

As negotiations persist to break the deadlock, no production is taking place and Essar has not been able to pay full salaries to workers since August last year. The last half salary payment was made on August 17 this year. For much of this year workers have taken home only one-eighth of their salary, about $60 for the lowest paid worker, paid out after two to three months.

Officials at Ziscosteel who asked not to be named said that it was generating revenue only through the sale of scrap metal. “Though [the plant is] stagnant, there is a lot of work to be done at the plant such as housekeeping, clearing rubble, the sale of scrap and coke bricks,” said the official.

It is understood that Ziscosteel’s clientèle includes Lafarge Cement, Sino-Zimbabwe Cement, Pretoria Portland Cement Zimbabwe and several South African companies. The Iron and Steel Workers Union of Zimbabwe is the largest worker union at the plant and represents nearly 1 200 workers, although there are four other unions in the remaining 2 300-strong workforce.

The union said the non-payment of salaries had made life unbearable for the workers.

Union chairperson Akim Mujokeri said the situation had been exacerbated because there were no answers to questions about the long delay in the resumption of production.

Workers destitute
“Workers are [asking] the government to treat our situation with the urgency it deserves, because we have been crying for a long time,” said Mujokeri, who has worked at Ziscosteel for 33 years.

The union’s general secretary, Clever Madhumela, said the workers were destitute.

“Kids are not going to school, some workers are dying as they cannot afford medication, and those who are lodgers are being chased away by their landlords. On weekends, workers fetch food at farms and neighbouring shops, while some work for public servants and do odd jobs such as laundry for as little as $2 per hour … in order to buy basic foodstuffs such as mealie-meal, cooking oil and sugar. It is survival of the fittest.”

Mines and Mining Development Minister Walter Chidakwa, however, appears to be optimistic about finding a solution to the contentious iron-ore reserves at Bimco, which Essar needs access to before it can begin production.

“[There is] a way to deal with the matter to ensure that the company [Ziscosteel] continues to access the mineral ore that has been found,” said Chidakwa.

Industry and Trade Deputy Minister Michael Bimha last month also assured industry captains gathered for the Congress of Zimbabwe Industries’s annual indaba in Bulawayo that Ziscosteel would be “operational before the end of the year”, while not divulging any specifics.

Ngulube said the politicians’ assurances were just hot air, pointing out that from the comfort of their offices they did not experience the plight of the workers, once the envy of many.

*Not his real name