Last year the government signed a deal with the global steel conglomerate ceding part of its stake to the Indians for $750 million. Essar was also expected to cancel Zisco’s debts that had ballooned to over $300 million before the firm became NewZim Steel. However, Mines Minister Obert Mpofu said the 54 percent stake given to Essar was more than the indigenisation policy allowed.
He then blocked the transfer of iron ore claims at Ripple Creek and Buchwa to Essar, contrary to the initial agreement. The Indians, who had already paid the outstanding salaries of workers at Zisco, then responded by halting the major investment.
“Last week we finalised our review talks concerning the Essar deal. An implementation matrix has since been put forward to Essar and I understand this week they will meet in London to discuss it. I do not forsee further disturbances,” Ncube told The Zimbabwean in an interview.
It is understood that the government finally resolved to allow the original 46/54 percent stake and transfer all the iron ore claims that Zisco owned to Essar.
If Essar finally comes on board to invest at Zisco, Ncube said, the development will contribute much to on-going efforts to revive the economy. At its peak, Zisco employed 4 000 workers and produced one million tonnes of steel per annum while contributing $1 billion to the Gross Domestic Product.
Top Zanu (PF) officials like Defence minister Emmerson Mnangagwa and Vice President Joice Mujuru were fingered as some of the government officials responsible for the collapse of the firm.
Post published in: Business