The deposits, believed to exist in billions of tonnes on the Mwanesi Range, are largely of low quality and are usually not exploited for commercial purposes. However, Essar Global plans to spend $100 million to establish the extent of the deposits, their beneficiation properties and the suitable technology to exploit them.
The investment will be made through Essar Global's 80%-owned unit NewZim Minerals Limited following the Indian group's acquisition of a 54 percent stake in former State enterprise NewZim Steel Limited.
If the iron ore can be value added, exists in huge quantities and can be mined commercially, Essar may invest a total of $3,5 billion in the project.
"It is estimated that this exploration, technology assessment and testing programme will entail an investment of approximately $100 million over the first 18 months," said Essar Global Limited. "Thereafter, depending on the outcome of the techno-economic feasibility of the project, Essar will provide funding required for large-scale beneficiation project and related infrastructure, which is estimated (to be) in the region of $3,5 billion."
Earlier this year, Industry and Commerce Minister Welshman Ncube said the record investment would create an additional 3 500 jobs at NewZim Minerals. The revival of NewZim Steel would retain another 3 500 jobs.
The beneficiation process would add the value of the iron ore by 500 percent and may require Essar to set up a 1 000 megawatts power station. Beneficiated iron ore in excess of domestic requirements would be exported either by rail or a slurry pipeline through Mozambique. Either way Zimbabwe would benefit from the infrastructure.
Essar is working on the massive investment projects after winning the bidding race to acquire and resuscitate troubled steel giant NewZim Steel. The firm suspended activities two years ago due to lack of finance.
Post published in: Business