The Zimbabwe government has put part of its stake on the block to revive the company, which has a 1-million-tonne production capacity and an iron ore mine.
The government owns 89 per cent of Ziscosteel and has put 60 per cent stake up for sale.
Lakshmi Mittal’s ArcelorMittal, having its headquarters in Luxembourg, is bidding alone, while Naveen Jindal’s JSPL is part of a consortium.
JSPL leads the team, which includes the Investment Development Corporation of South Africa and the Development Bank of South Africa.
Ziscosteel is the second-largest integrated steel maker in sub-Saharan Africa after ArcelorMittal South Africa.
The plant had stopped operations last year as a result of the global financial crisis and piled up huge debts as inflation spiralled beyond control.
When contacted, Sushil Maroo, director (finance) of JSPL, declined to comment.
However, industry sources confirmed the participation of JSPL.
The winner will be announced in a few weeks and is expected to invest a significant amount of money.
Ziscosteel’s main plant is at Redcliff in central Zimbabwe. The blast furnaces are closed. At times, the company has not even been able to pay the wages to employees. Employee headcount has also come down.
However, the plant has two crucial raw materials: iron ore and dolomite.
For ArcelorMittal, the acquisition will help it to further consolidate its leadership position in that region. ArcelorMittal South Africa is already the largest producer there.
For JSPL, it will mean an entry into a virgin market and a continent whose economy is expected to grow substantially.
While ArcelorMittal is already a globally diversified steel company, JSPL is showing all signs of following in its footsteps. JSPL already owns one of the largest iron ore mine in the world — El Mutun of Bolivia.