adminMinister Welshman Ncube said Essar, an Indian firm that went into partnership with the Government to form NewZim Steel, could not offset the debts in the absence of full implementation of the agreement by the two parties.
He said the Government, through Cabinet, has agreed to have 20 claims of iron ore in Mwenezi transferred to Essar as part of fulfilling its obligation.
Minister Ncube said this while testifying before a Parliamentary Portfolio Committee on Industry and Commerce chaired by Buhera North MP Cde William Mutomba (Zanu-PF).
Two German and Chinese creditors, he said, were increasingly becoming restless on the delay in addressing issues at the mine.
“We have written letters to them introducing them to Essar and one of them had reached an agreement.
“I know that the Germans are also now concerned with the delay, I know for instance that the new German ambassador is seeking to have a meeting with me to get an explanation of what is going on,” he said.
Minister Ncube said the Chinese firm, Sinosure, has refused to work with Essar, saying they were not owed anything by the Indian firm.
“They have said no, this is your debt pay us, get the money from Essar and pay us, but Essar is prepared to pay the debt in whichever way convenient to them,” he said.
There were also other local liabilities, including what Government should be paid by Essar for the stake it bought.
On mining rights, Minister Ncube said Cabinet had directed that 20 claims be transferred to Essar, pending a determination by the Supreme Court on the remaining claims which Mr Rodrick Mumbire is claiming.
Mr Mumbire, said Minister Ncube, was a former Buchwa Mine worker who took advantage of inside information and bought the mining right Special Grant that had expired.
This, in their view, amounted to corruption and Mr Mumbire had no legitimate rights to the claims.
On what was stalling progress, Minister Ncube said the Ministry of Mines and Mining Development had written them a letter in March this year saying they wanted to make a geological evaluation of the iron ore at Mwenezi, adding that the area was not subject of transfer to Essar. This is despite the fact that BIMCO and Zisco, had applied for renewal of the Special Grant and had paid for all necessary fees.
“Implying therefore that the Ministry was not prepared to transfer mining rights of Mwenezi to Essar, implying also that they were not prepared to renew that Special Grant at the very least. Clearly, Essar was not happy with this and we were also not happy with that,” he said..
The Mwenezi iron ore had the minimum threshold of 64 percent while iron ore at Redcliff was around 54 percent hence the need to blend it with that from Mwenezi. He said one reason for the constant breakdown of Blast Furnace Number Four was the use of low iron ore grade.
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Online Reporter