adminiron ore beneficiation plant, a Cabinet Minister revealed yesterday.
Essar has already committed to inject US$750 million to resuscitate Ziscosteel, which ceased operations in 2008 due to choking financial and debt constraints.
Redcliff based Ziscosteel, now owned 54 percent by Essar Group and 30 percent by the Government of Zimbabwe, has been renamed New Zimbabwe Steel (Pvt) Limited.
Industry and Commerce Minister Welshman Ncube, said the Essar investment would catalyse economic growth, development and Government’s medium term programme.
President Mugabe, who officially launched the partnership in Redcliff yesterday, lauded Essar for choosing to invest in Zimbabwe when westerners were sceptical.
Speaking at the ceremony, Minister Ncube said Essar committed to retain the 3 500 jobs at Ziscosteel and create an additional 3 500 jobs when it sets up an iron beneficiation plant in Chivhu.
He said another 250 jobs would be retained at Ziscosteel’s iron ore mining arm, Buchwa Iron Mining Company to be rechristened New Zimbabwe Minerals Private Limited.
“It is pleasing to note that on job retention and creation, Essar is committed to retaining the 3 500 at Zisco and 250 at BIMCO. It is also expected that 3 500 new jobs will be created in Mwanesi during the construction and many more downstream,” he said.
Essar intends to set up an iron ore beneficiation plant in Chivhu with capacity for 25 million tonnes per year and this will increase the value of iron ore from US$15 to US$65 per tonne.
New Zimbabwe Steel will do exploration of Mwanesi iron deposits to be beneficiated and form part of the critical feedstock into the steel production of Zisco (New Zimbabwe Steel Limited).
The process from feasibility to plant establishment and operationalisation is projected to cost between US$2 billion and US$4 billion spread over a minimum of five years.
New Zimbabwe Minerals, formally BIMCO, holds rights to iron ore deposits in Ripple Creek, Mwanesi, Buchwa among other areas required as feedstock into the steel making process.
Zisco, 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 after fresh capital injection.
Prospects for return to production became even brighter yesterday amid revelations Essar has waived preconditions it had set before commencement of operations.
During negotiations, Essar signed a Memorandum of Understanding with Government for guarantees of key enablers, namely water, transport, energy tax and minerals.
“In a concrete gesture to show its commitment to the project Essar has waived the condition that all MoUs be finalised (before it embarks on revival of Zisco,” said Minister Ncube.
He said the guarantees on energy and water had been secured and that he was confident that the remaining guarantees for transport, minerals and taxes would be secured this week.
Essar Group vice chairman, Mr Ravi Ruia, yesterday said his company would invest significantly in the key enablers to ensure the successful revival of Ziscosteel.
“We have already finished the groundwork and blueprint for the revival of Zisco and we are encouraged by the support from the Government and people of Zimbabwe,” he said.
He said his company would also invest in state of the art technology to beneficiate iron ore from Mwanesi, which had not been commercially exploited anywhere in the world.
He said Government’s Medium Term Plan focusing on entrepreneurship and resource mobilisation dove tailed into Essars investment and development programme.
Mr Ruia also said his company had set aside US$10 million to support youth and women’s activities (US$5m) and small and medium enterprise development (US$5m).
After acquiring 54 percent in Zisco and 80 percent in BIMCO, Essar undertook to clear Government’s US$340 million debt to KFW Bank of Germany and China’s Sinosure.
Online Reporter