adminThe deal between Essar Africa Holdings Limited and the Government saw the former taking a 60 percent controlling stake in NewZim Minerals (Pvt) Ltd while the Government took up 40 percent. The Government also has a 20 percent stake in NewZim Minerals, the mining arm of NewZim Steel with Essar Africa owning 80 percent.
Chronicle yesterday carried an article in which it was reported the revival of the giant facility would be delayed due to the level of decay at the steel giant. The reports follow hot on the heels of media reports that there were a few loose ends on the initial deal regarding the transfer of ownership of the steel firm.
In March last year, the ministry forecast that production would resume in 12 to 15 months following the signing of the $750 million deal to revive the steel facility.
Industry and Commerce Minister Professor Welshman Ncube said at the weekend the rehabilitation process at the firm was still at its infancy and that production was only expected in eight months.
“People should bear in mind that when Essar took over Zisco last year, the steel plant was at an advanced stage of decay. Zisco had ceased operations some time in October 2008.
“The main furnace, Blast Furnace Number Four, had molten steel that solidified in it. It also developed a huge crack when it was suddenly switched off due to lack of production,” said Prof Ncube.
It would appear though NewZim Steel was keen to rehabilitate the steel plant and commence production, there are still outstanding issues that the company has to thrash out with the Government. We believe that should not take up to a year since that would be frustrating to a serious investor who is prepared to pour in $750 million into our economy.
According to Prof Ncube there were five strategic ministries that are critical to the running of NewZim Steel and we understand negotiations were under way with the ministries.
In business, however, time is quite important hence the need to move with speed to finalise the agreements so that there are no further delays. It is also our hope that the delays have nothing to do with revision of some aspects of the deal that we had earlier committed ourselves to though it is important that Zimbabwe does not lose out in the deal. We need to know the value of our assets and the minerals and establish if we are getting a fair price for them. Also, reports that some claims that were part of the former
Ziscosteel were corruptly sold leading to litigation, are quite unsettling to an investor and the earlier these issues are resolved the better. The steel company has a capacity to create up to 7 000 jobs and the launch of the revived firm last year lifted people’s hopes, as did the payment of outstanding salaries to former Zisco workers.
We believe higher offices should intervene in the NewZim Steel issue and cut the red tape so that the Essar deal starts benefiting the Midlands community, downstream industries and the nation at large. Could some people be throwing spanners in the works? We hope not.
We understand equipment needed for the rehabilitation work at NewZim Steel was meant to be imported but that Essar had put on hold that process pending the completion of negotiations with the Government.
We cannot have negotiations going on forever. All that the country needs is a revived NewZim Steel that feeds our industry with steel and provides people with jobs and the hope is that the finer details are addressed during negotiations before the signing of the take-over deal. We cannot afford to wait another year for production to start at NewZim Steel.
Bongani Ndlovu
Online Reporter