ZIMBABWE Iron and Steel Company (Ziscosteel) says it is assisting its former employees to get their pension pay-outs adding the obligation now lies with the government. The development follows the coming on board of Kuvimba Mining House (KMH) which is investing US$1, 3 billion over three years to breathe a new lease of life into mothballed Redcliff based steelworks.
KMH, which has vast mining interests in gold, nickel, chrome and platinum with both private and State shareholding, has been resuscitating closed gold mines. The company won the tender to revive Ziscosteel ahead of six other bidders.
Its former employees went home empty-handed over a decade ago following the collapse of Redcliff- based giant steelworks in 2008. In an interview with source following vice president Constantino Chiwenga’s visit to the plant Wednesday, Ziscosteel CEO Farai Karonga said the issue of pay-outs is “basically not a ZISCO issue anymore.”
“Basically because the Debt Assumption Act took over their debt, it’s basically a Ministry of Finance issue but we participate as a pension fund trusteeship,” he said.
Zimbabwe Iron and Steel (Debt Assumption) Act, 2018 Act 5 of 2018 commenced on 28 May 2018. This was done to provide for the settlement of certain liabilities incurred by Ziscosteel and to provide for matters connected with or incidental to the foregoing.
Debt assumption is a type of debt refinancing under which a specific financial obligation is officially transferred from one party to another. The transaction involves paying off and thus ending the original payer’s debt.
Karonga however said Ziscosteel will assist them as part of its corporate social responsibility. He said the former employees’ pensions were wiped out after being wholly converted to local currency through the government’s controversial Exchange Control Directive RT120/2018.
“We are there to assist them. The only hiccup that has happened is that initially their pensions were paid in USD and then there was a time the Exchange Control Directive came in and it wiped their pensions.
“It’s now a dispute because they are not in agreement with that. They don’t want a valuation of their pensions,” he explained.
Karonga said the former employees are going to the parliament to probe various sectors of the economy to get that corrected.
“We are helping them to make representations to parliament but it’s basically not a Ziscosteel issue anymore. But from a social responsibility perspective, we are part of the model to get them a fair deal.”
Ziscosteel was the largest steelworks in Zimbabwe employing about 5,500 people in the 1990s.
Since then, the company has struggled to find a meaningful investor partly due to negative perceptions affecting the local economy until last year when KMH expressed interest in the concern.
Source NewZimbabwe
