adminwith discussions centring on the revival strategy for the steel firm that has been dormant for the last two years.
Essar Global resident director Middle East and Africa Mr Firdhose Coovadia said a blueprint for the revival of NewZim Steel has been completed.
As such, he said the NewZim board would hold their first meeting with directors and owners of the Indian group towards the end of this month.
“We completed the revival blueprint with technical provisions of the revival strategy. We will hold the first board meeting at the end of September to approve the technical strategy of the revival plan,” said Mr Coovadia.
He would not disclose the finer details of the revival strategy, but pointed out that the new plan would be from the previous one used on the firm.
Mr Coovadia also revealed that the firm has started paying NewZim Steel workers and expects to have normalised all salary issues by the end of this month.
A number of NewZim Steel workers had continued to report for duty, hoping the ailing firm would get back on its feet, even when it failed to pay them.
Things are now looking up for workers amid reports NewZim is set to settle salary arrears and is only awaiting independent auditors to verify the figures.
These relate to unpaid salaries, medical aid, pensions and social security contributions to be paid after discussions with the works council and the trade union.
NewZim workers went for long periods without getting their salaries as financial constraints made it difficult for the steelmaker to meet salary obligations. This resulted in the firm accumulating a
US$22,5 million salary bill.
After several failed attempts to revive the steel making giant Government finally struck an agreement with Essar Global and sold its 54 percent stake in the firm.
This would see the Indian firm availing a whopping US$750 million towards retiring Government’s debt and injecting fresh capital into NewZim Steel.
Essar will avail funding for rehabilitation of power and rail infrastructure to ensure reliability of these services and avoid interruption of production activities.
It will also set up an iron ore beneficiation plant in Chivhu with a capacity for 25 million tonnes per year and this will increase the value of iron ore from US$15 to US$65 per tonne.
NewZim Steel will do exploration of Mwanesi iron deposits to be beneficiated for the critical feedstock into the steel production of NewZim. The process from feasibility to plant operationalisation is projected to cost between US$2 billion and US$4 billion spread over a minimum of five years.
NewZim Steel, with a capacity to produce one million tonnes of steel annually, will have a new design output of 2,5 million tonnes in the next 27 months. Essar Group vice-chairman of Mr Ravi Ruia recently said his company would invest significantly in the key enablers to ensure the successful revival of Ziscosteel.
He said his firm would also invest in state-of- the-art technology to beneficiate iron ore in Chivhu, which has not be commercially exploited anywhere in the world.
Mr Ruia said his company had set aside US$10 million to support youth and women activities (US$5 million) and small and medium enterprises development (US$5 million).
After acquiring the 54 percent in NewZim Steel and 80 percent in NewZim Minerals, Essar Global undertook to clear Government’s US$340 million debt to KFW Bank of Germany and Chinese bank Sinosure.
Online Reporter