MUTARE – The government and Essar Africa Holdings have reached an agreement to reopen their jointly owned venture, Ziscosteel, paving way for resumption of operations, industry minister Mike Bimha has said.
The African unit of India’s Essar Group in November, 2011 agreed to buy 54% in the Zimbabwe Iron and Steel Company (Ziscosteel) in a deal worth $750 million, with the government keeping 36% and 10% to be owned by minority investors.
But the reopening of the steelmaker, now called New Zim Steel, had been held up by squabbles between the partners over ownership of mineral claims, until the government eventually agreed to transfer 80% of the rights to Essar while keeping the remainder.
Bimha told a Confederations of Zimbabwe Industries meeting that the two partners had found “common ground,” and that they would make a statement last Friday.
“I don’t want to pre-empt but tomorrow (Friday) we will issue a statement that will tell you the (positive) position regarding Ziscosteel.
“Officials from my ministry and from Essar including the board chairperson are finalising the plan to operationalise the company,” he said.
While acknowledging that reopening the steel giant would take time, Bimha said it would create 7 000 jobs, most of which were lost when it closed shop in 2008.
“Ziscosteel is very strategic. Its closure affected industries not only in the area where it is situated, but the entire country.
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A survey on deindustrialisation in Bulawayo indicated that the majority of companies that closed had relied on the steelmaker,” he added.
Bimha said 60% of the National Railways of Zimbabwe revenue come from the goods it transported for Ziscosteel.
– The Source
