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The bringing to finality of the much-talked about $750 million Essar deal is a welcome development. The deal inked during the days of inclusive government in 2010 characterised by haggling provides a solid platform for the country to rebuild the economy.In 2010, Essar agreed to purchase 54 percent of Ziscosteel, now NewZim Steel but the deal could not be consummated due to delays in handing over of iron claims.
Part of the deal will also see the new investor acquiring 80 percent of NewZim Minerals, while the government would take the remaining
shareholding.
Under the revival plan, the first phase, which is expected to be complete within 18 months, will see capacity rising to 500,000 tonnes of steel per annum.
It is also hoped that steel production will be increased to 1,2 million tonnes per year in the second phase and to 14 million tonnes in the long-term.
NewZim Minerals is expected to work on exploring and developing an iron ore beneficiation project.
It is pleasing to note that officials from Essar are already on the ground, ready to re-awaken the sleeping steel making giant at the heartbeat of the country’s economic revival.
What is however sad is the time that it took Essar to begin work. This must not be repeated as investors do not owe us anything. As a country we must put our house in order if we are to attract more investors of this calibre. We hope there are lessons that have been learnt in the process.
It’s now down to serious business.
From the time the deal was inked, if action had taken place immediately, the country could have started enjoying the fruits of the deal given that the first phase of rehabilitation only requires 18 months.
The deal does not only bring relief to the 3,000 plus employees that had gone for years without salaries but the nation at large given the impact it has across the different economic sectors from mining, social services, exports and infrastructure.
The resuscitation of Zisco means a lot to this nation. Once up and running, the financially hamstrung Redcliff and Kwekwe town councils will begin to tick again. As thousands of employees begin to get salaries, the expectation is that they will be in a position to pay their bills and in the process enabling the local authorities to improve service delivery.
Redcliff which was fast becoming a ghost town will surely be resuscitated as resources will now be available to meet most of its needs.
Not only that, the retail outlets that had closed will find business again, the construction of houses that had virtually come to a standstill will resume.
The downstream industries that had closed will come alive again. It also means big business to Hwange Colliery Company and the struggling National Railways of Zimbabwe which will be moving the coal from Hwange.
Already indications are that the Indian conglomerate Essar Holdings has started negotiations with holders of Hwange coal concessions with a view to establishing joint ventures to extract the mineral to power its planned 600-megawatt thermal power station.
The company is expected to use 300MW with the remaining power being channelled into the national grid. If this happens the country’s cost of electricity imports will also go down significantly.
Online Reporter