Essar to get mining rights

working on the transfer of the rights.
Essar Africa, a unit of conglomerate Essar Global, has not started actual production-related work at NewZim Steel since acquiring it in March 2011.
It has cited the iron ore mineral rights as the reason behind the delays.
Essar acquired the former Ziscosteel last year, taking 60 percent of Government’s shareholding in the firm that had ceased operations for two years, largely because of crippling financial problems and mismanagement.
Minister Mpofu said the mining rights had not been incorporated in the agreement signed between Essar and the Ministry of Industry and Commerce.
“The transaction was between Essar Africa and the Ministry of Industry and Commerce regarding the manufacturing aspect of Zisco (NewZim Steel),” he said.
“But this was not incorporated into the mineral rights needed in the agreement. These are matters that should have been taken into consideration from the beginning, but are just emerging now.”
He said a meeting held about two weeks ago had been intended to resolve the remaining issues with regards to the transfer of mining rights to Essar Africa.
A Special Grant is a mining title issued by the Secretary for Mines and under Part 19 of the Minerals Act for all minerals other than coal and energy minerals in respect of areas reserved against prospecting or pegging.
But The Herald Business understands that the Ministry of Industry and Commerce overlooked certain critical aspects of the agreement to close the deal, in principle, and then tie up the loose ends when the investment was secured.
Issues not concluded during the negotiations included the transfer of mining rights for iron ore, which was the key feedstock for steelmaking at Zisco.
Other conditions of the multimillion-dollar deal that had to be fulfilled after the deal was signed in principle included guarantees for uninterrupted power supply, fiscal concessions, rail transport, water and access to coal.
Zimbabwe holds an estimated 39 billion tonnes of iron ore and a sizeable chunk of this mineral resource was held by the Redcliff-based steelmaker through its renamed mining arm, Buchwa Iron Mining Company.
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 it is of inferior quality.
The investment by Essar Africa relieved the Government of about US$340 million in foreign debts. Proposals have been made to write off more than US$100 million, which is owed mostly to State- owned institutions.