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In August last year the Government concluded a $750 million agreement with Essar Global to take over operations at Zisco (now NewZim Steel).
Under the deal, Essar took a 60 percent controlling stake in NewZim Steel.
Following the signing of the agreement, the new investor was supposed to resume production within 12 months but the issue of mining rights slowed down progress.
In a bid to force Government to conclude the issue of mining rights, Essar recently suspended paying salaries for its 1 500 workers.
Industry and Commerce Minister Professor Welshman Ncube yesterday told Business Chronicle that all the iron ore claims that were formerly owned by Bimco and Zisco had been transferred to the new investor.
“We have resolved to transfer iron ore claims in lower Mwenezi and Ripple Creek that were owned by Zisco and Bimco to NewZim Steel.
“It means we can now write to Essar informing them that the claims have been transferred so that they can resume operations,” he said, adding that the Ministry of Mines and Mining Development was responsible for writing to Essar informing them of the latest development.
Mines and Mining Development Minister Dr Obert Mpofu could not be reached for a comment as his mobile number was not reachable.
Prof Ncube said the use of iron ore at Mwenezi was significant because the claims have high grade ore that is not only good in terms of value but also prolonged the lifespan of blast furnaces as opposed to low grade which damaged blast furnaces.
The Mwenezi iron ore has the minimum threshold of 64 percent while iron ore at Redcliff is around 54 percent, so the company can now blend the ores.
In separate interviews, economic analysts welcomed the latest development that could see NewZim Steel resuming production.
“It is the right decision that Government has made especially considering the mineral beneficiation that Government is calling for. When NewZim Steel starts producing, it means the country starts earning foreign currency.
“The resumption of production at NewZim Steel will result in the revival of many downstream industries,” said the Bulawayo Indigenous Business Association deputy president, Mr Fred Ndoro.
An economist, Ms Chipo Warikandwa, echoed similar sentiments, adding that finalisation of issues on mining rights was long overdue taking into cognisance the economic benefits of producing steel.
Among other developments, Essar has indicated plans to invest in power generation so that the firm is guaranteed of electricity.
It is hoped that part of the electricity to be generated by the steel producer’s power plant will be fed into the national grid thereby boosting the amount of electricity available to the nation.
It is also hoped that more than 5 000 people would be employed at the steel plant in the next few years as the company increases production.
Online Reporter