Essar engineers back at NewZim Steel

Harare Bureau
THE long-awaited revival of Ziscosteel now NewZim Steel is Government’s number one priority and the steel giant is expected to resume operations soon following the arrival of engineers from the parent company, Industry and Commerce Minister Mike Bimha, has said.
Speaking during a dinner hosted by the Confederation of Zimbabwean Industries in Gweru on Thursday, Cde Bimha said Government was now working on the implementation strategies to make NewZim Steel operational. “Government is working on the operationalisation of NewZim Steel. This is our quick win as the responsible ministry. We are leaving no stone unturned to ensure the operationalisation of NewZim Steel. This is not a mickey mouse project but a huge investment which involves a lot of money and therefore its implementation was not smooth sailing,” he said.

Earlier on, NewZim Steel workers had criticised Minister Bimha for failing to address the problems bedevilling the former giant steel company.

The problems, they said, have resulted in them going for almost three years without salaries. The workers said they feel neglected as their problems continue to mount.

They say they have not been paid full salaries since 2011 except a brief intervention by the investor before the firm suspended paying salaries in May last year citing lack of production. “It looks like Government is not concerned with our plight although it is public knowledge that we have gone for three years without salaries,” Ziscosteel Joint Unions Committee chairman Mr Benedict Moyo told our Harare Correspondent on Thursday.

Cde Bimha said there were disagreements on the NewZim Steel deal due to the existing policies. He however, said Essar Holdings and Government overcame the hurdles and managed to reach a compromise.

“In the past, the was a disagreement in the NewZim Steel deal in terms of policy but I can assure you it is now in the past. That is all behind us. The revival of NewZim Steel is no longer an issue of policy but it is now a matter of implementation. What we are concerned about at the moment is that implementation takes place,” he said.

Cde Bimha said the revival of NewZim Steel was going to be gradual. “NewZim Steel cannot start operating on full throttle overnight. There has been a lot of refurbishment of the plant among other renovations that are going to take place. Essar Holdings engineers arrived on Wednesday while some are expected next week. This demonstrates that the re-opening of NewZim Steel is imminent,” he said.

Government and Essar Africa Holdings entered into a deal in 2011 under which the India-based firm acquired a 60 percent controlling stake in NewZim Steel (Pvt) Ltd, leaving the Government with 40 percent.

Under the same deal, Government also has a 20 percent stake in NewZim Minerals (Pvt) while Essar Holdings controls 80 percent.
The deal failed to take off after Government insisted on re-negotiating the shares in NewZim Minerals (Pvt) Ltd citing some anomalies in the initial agreement.

Despite Government and Essar Africa Holdings signing a $750 million agreement in 2011 for the takeover of the company, disagreements over the control of iron ore reserves in Mwanesi have hampered the full implementation of the deal.

Government raised concerns that Essar was getting the iron ore deposits worth $30 billion when the company only paid $750 million.
Essar is now the majority shareholder in NewZim Steel after Government sold its 54 percent stake in the company.

Following the impasse, management at Essar Africa Holdings have withheld further funding to NewZim Steel in a bid to press Government to finalise the takeover deal.

Zisco Management Union secretary general, Mr Gabriel Sibanda accused Minister Bimha of inaction.
“If you look at other ministers like Dzikamai Mavhaire (Energy and Power Development) they have been throughout the country in a short space of time yet our own minister who knows the problems here has not been here.

“All he does is to talk to the Press from Harare claiming that we will be paid yet we have not. It seems nobody understands our situation. We feel abandoned,” he said.

He said they were sometimes given an eighth of their salaries when the company sells scrap metal and slag.
Minister Bimha distanced himself from the plight of workers saying their welfare was under the ambit of the management.
“They have to approach management at Ziscosteel. My job is not to help them get money in their pockets. There is management that is supposed to address their problems.

“My role is to get an investor who can ensure operations resume. They must go to management and if management fails to address their problems it has to go to the board,” said Minister Bimha.