More than $3-billion is needed to return to glory three companies that were once critical contributors to Zimbabwe's economy, according to recommendations made by the parliamentary portfolio committee on mines and energy.
The companies are the Zimbabwe Iron and Steel Company (Ziscosteel), Kamativi Tin Mines and Hwange Colliery Company.
Temba Mliswa, who heads the committee, recommended in a report released this month renewing previous partnerships with Chinese investors, the closure of some defunct units and an overhaul of infrastructure.
"The importance of the mining sector to drive the economy can never be underestimated. Hwange is over 100 years old. It is one of the anchor companies for the economy of Zimbabwe, along with Zimbabwe Electricity Supply Authority, the National Railways of Zimbabwe and Ziscosteel," the report said.
"Ziscosteel has been the mainstay of the Zimbabwean economy by providing steel for the local market and also exporting steel. It relies on coal from Hwange and iron ore from Ripple Creek Mine, about 14km from Ziscosteel."Kamativi ... is the biggest tin mine in Zimbabwe, now being managed by [the] Zimbabwe Mining Development Corporation. The Kamativi mine has reserves amounting to 100million tons of tin ore."
In 2007, senior party officials in former president Robert Mugabe's government were alleged to have been behind the pillaging of Ziscosteel. At the time, the firm was a major foreign currency earner as it exported its products into the region, particularly South Africa.
It is understood the government is in talks with a Chinese investor, R&F Properties, for an investment of $1-billion to revive Ziscosteel's operations.
POWER GENERATION
However, according to the report's findings, key infrastructure is run-down and there is a need for new equipment.
"The plant is dilapidated, especially the blast furnaces and rolling mills," the report said.
The report emphasised that any new capital injection should go into servicing the blast furnaces, coal ovens and the construction of a new oxygen plant system.
Stevenson Dlamini, an economist at the National University of Science and Technology, said Ziscosteel's successful revival would need buy-in from other industries.
"Power generation is a huge problem. If Zesa cannot supply power at reasonable rates or if the mine fails to get a power generation licence of its own, then it is doomed," he said.
Kamativi Tin Mines was a wholly owned subsidiary of the ZMDC, which closed operations in 1994 after 58 years of operation because of the global fall of tin prices. The company has since found an investor, Canadian company Chimata Gold Corporation.A 60% stake in the mine has been dangled, specifically to extract lithium from the mine's dump for the next 10 years.
UNDERCAPITALISED
The portfolio committee also suggested that Chinese firm Beijing Pinchang's contract with the mine be terminated because the partnership had failed to take off.
The two entered an arrangement in 2015 to mine lithium, tantalite and beryllium, but the arrival of Chimata spoilt the relationship.
The committee said Kamativi's revival could be led by the high interest in lithium for battery manufacturing.
The ZMDC's acting general manager, Garikayi Chimhina, said Kamativi had a business plan that would realise $1.4-billion through lithium mining.
Meanwhile, years of poor performance at Hwange have led to smaller mining firms such as Liberation and Zambezi Gas, operating in Matabeleland North, making inroads into the market the coal miner once dominated.
"The major challenge faced by Hwange Colliery is that it is heavily undercapitalised as it was last capitalised in 1983. This then has resulted in an obsolete plant and equipment," the report said.
"Furthermore, it has an inadequate monthly working capital."
The recommendations is for Hwange to pay back money advanced to it by the government in 1983.
Board member Ntombizodwa Masuku said shareholders were reluctant to inject money into the company.
KEY FINDINGS
• At Ziscosteel most equipment has become obsolete. Only 20% -30% should remain
• Hwange Colliery has inadequate monthly working capital of $5-million
• Kamativi recently hired 350 workers..