adminZimbabwe is endowed with countless natural resources whose potential to uplift the country economically is undoubted, and several initiatives have over the years been launched in a bid to harness foreign capital so that we bolster our capacity to exploit our resources.
As a country, we have the natural resources but it is quite important also that we get foreign partners with the capital to help us turn our potential into real wealth. Chronicle yesterday carried an article regarding the exploitation of our minerals by NewZim Steel, a joint venture between the Zimbabwean Government and an Indian firm, Essar. According to Minister of Mines and Mining Development Dr Obert Mpofu the Essar deal should be revised since the company was going to pay $700 million for resources worth more than $30 billion. He said iron ore reserves near Chivhu, which Essar wants to control under the agreement, had a cumulative value of $30 billion.
The former Ziscosteel plant in Redcliff remains shut and thousands are still jobless as politicians argue back and forth over structural issues at the giant steel facility whose operations have a huge impact on the economy of this country. Granted, we would like to have fair value for our resources and the indigenisation policy is not negotiable.
However, we cannot afford to ambush investors with certain provisions after they have signed agreements on different conditions altogether.
Minister Mpofu told the Parliamentary Portfolio Committee on Industry and Commerce that he would not allow minerals to be surrendered to Essar for no value. We agree with the principle but differ on the implementation since the agreement between the Government and Essar was signed and the President commissioned NewZim Steel last year amid hopes that former Ziscosteel workers would get their jobs back in less than a year when production was expected to have commenced.
Professor Welshman Ncube whose ministry handled the deal, and Dr Obert Mpofu, who handles the mines portfolio, both sit in Cabinet and the Essar deal was discussed for a long time at that level. It then comes as a surprise to us that such a deal will be renegotiated after the commissioning of the plant, and clearly Zimbabweans would be justified in feeling that it is now an issue of scoring political points.
We believe the country, and the Midlands province in particular, deserves better and that the Zimbabwean Government can certainly do better in terms of handling investment issues. Is this the same Government that pours money into investment promotion initiatives around the world? And what message should this send to investors both within and outside coming as it does after a bid to re-negotiate the ethanol plant in Chisumbanje deal?
Our worry is the suffering of industry and the common man that want the steel plant to be operational yesterday so that they derive maximum benefits from the investment. It should be remembered that the giant steel plant has been lying idle for years with no takers, and it was 100 percent indigenous, but the Government sought a foreign partner to revive operations so that the rest of industry benefits from the supply of steel by NewZimsteel instead of being condemned to imports. We believe President Mugabe should step in and resolve the Essar issue once and for all since he commissioned the plant last year and what appears to be happening now seems to be a reversal of that deal that he endorsed. Also, we wonder what kind of advice the ministers give to the President as they appear to differ on fundamental issues though they sit in the same Cabinet.
Let us draw lessons from our shortcomings in terms of structuring mineral exploitation deals, not only in the Midlands but even in the Chiadzwa diamond fields where earnings from the mineral have been less than projected.
Such lessons would then benefit us in future when we negotiate mineral deals instead of frustrating investors through introducing new conditions after signing of agreements.
Let us not shoot ourselves in the foot by projecting the wrong picture to investors about doing business in this country and the way out of this fiasco is to quickly conclude the Essar deal based on the initial terms of the agreement.
Online Reporter