Business / Companies
Essar to get mining licence for Buchwa once quantified
19 Jun 2013 at 18:13hrs | Views
The Ministry of Mines will only be able to give Essar Holdings the right to mine iron ore at Buchwa once they establish the quantum of resources on the ground, permanent secretary Prince Mupazviriho has said.
Giving oral evidence before the Parliamentary Committee on Industry and Commerce, Mupazviriho said Essar together with the ministry had commenced joint exploration of the iron ore claims at Ripple Creek, Nhodza and Buchwa after issuing a 36-months special grant to New Zim Minerals.
New Zim Minerals is the former BIMCO where government owns a 20% shareholding while Essar holds the remainder.
Mupazviriho said once they are done with the joint exploration only then can an application for a mining licence be considered. "Once we have established the quantum of the resource on the ground and valued it, then they are free to apply for a concession for the purposes of mining."
"The Mines ministry will only transfer mineral rights of iron ore to Essar only for actual value."
He said that Essar had gone into the area under BIMCO but could not send the samples for approval or for tests because they didn't have the special grant for exploration. Recently, Essar said it had injected $16 mln into exploration work.
Mupazviriho noted that the grant was for three years but the team was expected to do a report in the first six months of the exploration work, which would be sent to the ministry for the necessary approvals and tests.
The Mines ministry recently said exploration work was being done at Mwanesi ranch in Chivhu to ascertain the exact amount of iron ore deposits in the area under efforts to plug loopholes in the $750 mln deal.
Deputy PM Arthur Mutambara has in the past said government had been shortchanged in certain mineral deals such as Zimplats and Essar because they didn't know the value of its resource. "There was never any quantification made to the deals, all they did was to accept money which covers debt and provides some working capital. And off we go to sign, yet there was no mention of the asset on the ground."
Mutambara says it's necessary that government understands the difference between working capital and equity capital.
Giving oral evidence before the Parliamentary Committee on Industry and Commerce, Mupazviriho said Essar together with the ministry had commenced joint exploration of the iron ore claims at Ripple Creek, Nhodza and Buchwa after issuing a 36-months special grant to New Zim Minerals.
New Zim Minerals is the former BIMCO where government owns a 20% shareholding while Essar holds the remainder.
Mupazviriho said once they are done with the joint exploration only then can an application for a mining licence be considered. "Once we have established the quantum of the resource on the ground and valued it, then they are free to apply for a concession for the purposes of mining."
"The Mines ministry will only transfer mineral rights of iron ore to Essar only for actual value."
Mupazviriho noted that the grant was for three years but the team was expected to do a report in the first six months of the exploration work, which would be sent to the ministry for the necessary approvals and tests.
The Mines ministry recently said exploration work was being done at Mwanesi ranch in Chivhu to ascertain the exact amount of iron ore deposits in the area under efforts to plug loopholes in the $750 mln deal.
Deputy PM Arthur Mutambara has in the past said government had been shortchanged in certain mineral deals such as Zimplats and Essar because they didn't know the value of its resource. "There was never any quantification made to the deals, all they did was to accept money which covers debt and provides some working capital. And off we go to sign, yet there was no mention of the asset on the ground."
Mutambara says it's necessary that government understands the difference between working capital and equity capital.
Source - Finx
