Govt engages Essar in talks over Zisco

Cabinet last week resolved that the Zisco/Essar deal be implemented on the original 46 percent/54 percent share basis and the transfer of ore deposits at Ripple Creek and Buchwa to Essar.

 

At one time, Government was thinking of reviewing the deal to bring it in line with the indigenisation regulations which require locals to own at least 51 percent in companies after  Mines and Mining Development Minister Dr Obert Mpofu raised questions on the transfer of the massive Mwanesi ore reserves to the Indian company.

In an interview, Prof Ncube said now that Cabinet had reached a decision, he wanted speedy implementation of the deal.

He said the Government was working with Essar Africa Holdings Limited to see how best they could start operations at the NewZim Steel.

“We have since resolved issues with the Ministry of Mines and Mining Development and as such we hope to move fast to achieve full implementation of the deal. Due to that, we are working with Essar Africa Holdings to see how best we can resume operations,” said Prof Ncube.

Prof Ncube said Government wanted operations at the former steel giant to resume as soon as possible because of its importance to the economy.

“At its peak Zisco used to produce one million tonnes of steel per annum and employed about 4 000 people. Thus we are concerned about the delay in the resumption of operations, which could be a factor in the revival of the country’s economy.

“Resumption of operations at the steel plant would also provide raw materials for the local manufacturing industry,” he said.

“Essar Africa Holdings Limited has not started operations at the NewZim Steel and is awaiting official exchange and transfer of shares by the Government. Once that is done, the NewZim Steel Limited board will also effectively take over from the old Zisco board after the conclusion of the deal.”

Government last year signed an agreement to sell part of its stake in Zisco to Essar for $750 million. Essar was to take over debts at the company which amounted to more than $300 million.