Business / Companies
Essar technical team expected in Zimbabwe
03 Nov 2013 at 04:40hrs | Views
A technical team from Essar Africa Holdings Limited (EAHL) is expected at New Zim Steel this week as the steel giant reaffirms its commitment to the $750 million deal to revive operations at the Redcliff-based plant.
Industry and Commerce Minister Mr Mike Bimha said the development paves way for efforts to resume operations by end of this month.
"The issue of Essar is no longer a policy one but an implementation issue; there is a management committee that has been set up to oversee the resuscitation of Lancashire Steel.
"A team of experts will be in the country this week form Essar to help with the implementation. All I can say is it's (the deal) on course and in the next two weeks will be updating Cabinet on the progress made.
"As you know, resuscitation of Zisco Steel is one of the quick wins in our economic blueprint Zimbabwe Agenda for Sustainable Socio-Economic
Transformation (Zim Asset), so there is no going back," said Minister Bimha.
In 2009, Essar acquired a 54 percent controlling stake in the Zimbabwe Iron and Steel Company (Ziscosteel) for $750 million.
The steel-making unit has since been rebranded to New Zim Steel. Government now controls about 46 percent in the steel giant, which has about 3 000 employees.
Revival of operations at New Zim Steel stalled after a dispute over the iron ore concessions, which experts say were undervalued in the transaction.
Essar plans to spend up to $4 billion by constructing a plant to process iron ore from Mwanesi resource within the next five years.
Analysts say the Essar-Zisco deal would be the largest single foreign investment into the economy and would equal about two-thirds of the country's estimated gross domestic product (GDP). When revived, the plant is set to process 25 million tonnes of low-grade ore annually and create 500 more jobs.
Ziscosteel relies on feedstock from Buchwa Iron Ore Mining Company (BIMCO), which owns most of the known iron ore reserves in the country estimated at over $30 billion. It is believed that when consummated, the deal will have a material impact on the firm as $355 million in fresh capital will be injected.
Essar also pledged to pay off Zisco's $240 million debt to KFW of Germany and invest $65 million in refurbishing blast furnaces three and four.
It would also invest in the renewal of a coke oven battery and human skills development, among other areas, to rejuvenate the steel- making giant.
Industry and Commerce Minister Mr Mike Bimha said the development paves way for efforts to resume operations by end of this month.
"The issue of Essar is no longer a policy one but an implementation issue; there is a management committee that has been set up to oversee the resuscitation of Lancashire Steel.
"A team of experts will be in the country this week form Essar to help with the implementation. All I can say is it's (the deal) on course and in the next two weeks will be updating Cabinet on the progress made.
"As you know, resuscitation of Zisco Steel is one of the quick wins in our economic blueprint Zimbabwe Agenda for Sustainable Socio-Economic
Transformation (Zim Asset), so there is no going back," said Minister Bimha.
In 2009, Essar acquired a 54 percent controlling stake in the Zimbabwe Iron and Steel Company (Ziscosteel) for $750 million.
The steel-making unit has since been rebranded to New Zim Steel. Government now controls about 46 percent in the steel giant, which has about 3 000 employees.
Revival of operations at New Zim Steel stalled after a dispute over the iron ore concessions, which experts say were undervalued in the transaction.
Essar plans to spend up to $4 billion by constructing a plant to process iron ore from Mwanesi resource within the next five years.
Analysts say the Essar-Zisco deal would be the largest single foreign investment into the economy and would equal about two-thirds of the country's estimated gross domestic product (GDP). When revived, the plant is set to process 25 million tonnes of low-grade ore annually and create 500 more jobs.
Ziscosteel relies on feedstock from Buchwa Iron Ore Mining Company (BIMCO), which owns most of the known iron ore reserves in the country estimated at over $30 billion. It is believed that when consummated, the deal will have a material impact on the firm as $355 million in fresh capital will be injected.
Essar also pledged to pay off Zisco's $240 million debt to KFW of Germany and invest $65 million in refurbishing blast furnaces three and four.
It would also invest in the renewal of a coke oven battery and human skills development, among other areas, to rejuvenate the steel- making giant.
Source - sundaymail
