Essar export pipeline plan raises concern

country being the biggest loser.
While the finer details on the grand plan remain sketchy, Herald Business understands the company will engage Government in more discussions on the issue.
Sources said although this position was not included in the contract signed when the State sold Ziscosteel to Essar the matter would come up for discussion.
But the issue was never mentioned when Government announced it had sold 54 percent of its shareholding in the grounded steel company.
Renaissance Capital was the lead advisor in the investment deal for the revival of Zisco, which ceased operations in 2008 due to financial constraints.
Essar resident director for the Middle East and Africa Mr Firdhose Coovadia confirmed the plans for the ore export pipeline, but would not give details.
“We have plans that are firm and some that are non-firm,” he said. “For instance, we pledged to pay the workers and we have started buying uniforms and paying school fees for children of Zisco workers and these are firm plans.
“In terms of plans to build an ore export pipeline, that is part of issues we are going to engage the Government and discuss.”
Mr Coovadia referred further questions to Government. But Industry and Commerce Minister Welshman Ncube could not be contacted at the time of writing.
Revelations of plans to build the iron export pipeline were received with mixed feelings in the Ministry of Industry as the country stands to lose out, say sources close to the deal.
The general understanding, when Government approved the sale of Ziscosteel to Essar, was that this would allow for the revival of the dormant steel maker.
The new investor would also assume assets and liabilities of the firm, relieving the cash-strapped Government of the firm’s huge debt obligations.
In addition, the firm pledged to assist Zesa and the National Railways of Zimbabwe rehabilitate their infrastructure to deliver an efficient service.
But sources said Zimbabwe might lose billions of iron ore through exports yet the mineral could be beneficiated within before being exported.
Zimbabwe holds an estimated 39 billion tonnes of iron ore and a sizeable chunk of this is held by the Redcliff-based steelmaker.
Ziscosteel holds iron ore rights to reserves in such areas as Buchwa, Ripple Cliff (Kwekwe), Malingwane (Gwanda), Hwedza and Mwanesi (Chivhu), which is the largest in Zimbabwe, though of inferior quality.
It appears, though, that Essar’s ultimate aim might have been to gain access to vast amounts of iron ore for its bigger steel-making operations elsewhere.
The Mauritian-registered Indian firm produces about nine million tonnes of steel annually and at one million tonnes Zisco is only but a drop in the ocean.
Iron ore is a high-value mineral resource having contributed an estimated 40 percent to Australia’s US$600 billion gross domestic product.
It means that although Essar relieved Government of US$260 million in debts and about US$750 million investment to revive Zisco, they still emerged the biggest winner by gaining access to the iron ore.
Essar now holds 80 percent of BIMCO, the former State-owned firm, which holds exclusive rights to most of the iron ore reserves in the country.