Government loses iron ore claims appeal

The Indian company acquired a 54 percent stake in Zisco (now New Zim Steel) in 2011 but delays in trans­ferring the mineral rights have stalled progress.

It emerged, after the deal was signed, that the iron ore claims Essar wanted to exploit were owned by a for­mer Zisco employee, Mr Roderick Mumbire, through a company called Bearable Prospects, prompting the Government to lodge an appeal in the Gweru High Court.
Mines and Mining Development Deputy Minister Gift Chimanikire said the Government had lost the appeal.

“We lost that appeal about two weeks ago,” he said. “Unfortunately our Commissioner, who is handling the matter, sat on court papers that indicated that we were supposed to attend the hearing. We only got to know about it when the judgment had been passed. The guy (Mr Mumbire) got a default judgment.”

Mr Chimanikire explained that the court had also based its judgment on a clause in the Mines and Min­erals Act, which stipulates that claims not opposed within two years of being awarded could not be chal­lenged.

“The judge erred because that clause refers to unex­plored areas but that was a reserved area. It is Govern­ment property,” he said, adding that the Government had lodged another appeal.
But he maintained that the delays would not scuttle the Essar deal, which had been hamstrung by numer­ous other hurdles.

He said Government would “do everything” in its power to ensure the deal sailed through.
Essar has rejected reserves at Buchwa Mine, saying they were “too deep to exploit”, while those at Ripple Creek were not sufficient to enable them recoup their investment.

The Indian firm intends to invest over US$4 billion over the next four years at NewZim Steel.
Essar has applied for a licence to set up a 600MW thermal power plant to support the steelworks.

When operations at the plant resume, annual steel output is expected to rise to 2,5 million tonnes.
Ziscosteel, once the biggest integrated steel works in Africa, stopped operations in 2008, choking under a US$340 million debt and other viability problems.

Once implemented, the investment is expected to turn around the fortunes of Redcliff town and also improve the welfare of over 3 500 workers left jobless after operations ceased. — New Ziana.