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The impasse over the re-negotiation of shares has stalled the resuscitation of the Redcliff-based giant steel making company one year after President Mugabe commissioned the $750 million investment deal with the Indian owned, Essar Africa Holdings.
Industry and Commerce Minister Professor Welshman Ncube yesterday said the Essar Holdings management was in the country and that deliberations over the company’s share structure were on.
“A delegation of officials from Essar Holdings is in the country for the discussions. They arrived on Tuesday and we have been engaged in talks from that time. It is a week long discussion,” said Prof Ncube in an interview from Harare.
Asked to comment about the outcome of the deliberations, the Minister said: “We cannot make our deliberations public for now. However, discussions are progressing well and we will announce the outcome when the meetings have been completed.”
Mines and Mining Development Minister Dr Obert Mpofu confirmed the meetings were on although he said he has not met Prof Ncube.
“Professor Ncube knows the whole story about this issue and it is his Ministry that is handling it. He has met officials from my Ministry but I have not personally met him at our level as Ministers,” said Dr Mpofu.
Essar Holdings is the majority shareholder of the NewZim Steel (Pvt) Ltd with about 60 percent controlling stake while Government owns 40 percent.
The Government also has a 20 percent stake in NewZim Minerals (Pvt) Ltd formerly Buchwa Iron Mining Company (Bimco) while Essar Holdings owns 80 percent.
Dr Mpofu has said the company’s share structure was not in tandem with the country’s indigenisation laws, which stipulate that foreigners should not own more than 49 percent shares in companies.
The development reportedly prompted New Zimsteel management to suspend paying salaries to more than 1 500 workers in May this year in a bid to press Government to finalise the takeover agreement.
Senior company officials are said to be reluctant to continue pumping more money into New Zimsteel, which is yet to iron out mining rights from Government.
At some point Prof Ncube and Dr Mpofu traded accusations over delays in the resumption of operations at the steel company.
This prompted the Industry and Commerce Parliamentary Portfolio Committee to summon the two Ministers to appear before it in May to explain what was stopping Essar Holdings from commencing operations.
The committee expressed concern over delays in resuming operations at NewZim Steel, saying the development was a betrayal to President Mugabe and the people of Zimbabwe.
It is now a year since the commissioning of NewZim Steel and not much has been done in terms of preparations to resume production.
The Redcliff-based company owes its workers about $12 million, a debt it assumed from the defunct Ziscosteel.
The company is reported to have spent millions of dollars in wages since March last year without production.
President Mugabe commissioned the $750 million New Zimsteel (Pvt) Ltd and New Zimsteel Minerals (Pvt) Ltd in August last year.
The commissioning of the new steel making company rekindled hopes of the revival of the dormant giant steel plant, which has been idle since 2008 when it stopped production.
Once operational, New Zimsteel is set to breathe life back into the surrounding communities of Redcliff, Kwekwe and Gweru. The new company was expected to create more than 5 000 jobs in direct employment at both Redcliff and Chivhu projects.
Essar Holdings committed itself to retaining the defunct Zisco’s 3 500 workers.
Online Reporter