Ziscosteel mineral rights not for sale

Essar Group is likely to get Redcliff-based Zimbabwe Iron and Steel Company (Zisco) minus its mineral resources. Media reports suggests that the government is not keen on selling the steel company's ore reserves.
Mauritius-based Essar Africa Holdings, a privately held company of the $15 billion Essar Group, announced in November that it was the preferred bidder for the revival of Zimbabwe's flagship steel company Zisco.
"The company has received an official notification from the Government of Zimbabwe to purchase its 60% equity interest and has been invited to finalise the terms and conditions to complete the transaction," an Essar Group release had said then.
While Zisco has a capacity to produce one million tonnes of steel, it also has substantial iron ore reserves. Though no proper estimate of its mining reserves is currently available, sources peg the potential at around 25 million tonnes.
"This is likely to go up once the actual potential is established after further exploration," said a source.
Stripping Zisco of its resources would reduce the attractiveness of the deal for Essar. After all, it was largely the ore the bidders ' ArcelorMittal and Jindal Steel and Power included ' were said to be after, not so much the debt-ridden company.
"A steel plant without captive resources means nothing," the source said, but added that the entire documentation work has been completed and the deal is likely to be signed before the end of February. "The deal will be for the integrated steel plant," the source said, without disclosing the value.
According to Zimbabwean media reports, Edgar Nyoni, executive director of the State Enterprises Restructuring Agency, said the deal hasn't closed as the Zimbabwean government and Essar differed on the value and on whether the company would buy only Zisco without its iron ore resources.
Essar maintains talks are on."There are a lot of media queries, but as of now, talks are progressing well and a final announcement is expected shortly," Firdhose Coovadia, resident director, Middle East and Africa, Essar Group, said. He refused to give any further information, citing confidentiality.
According to the Zimbabwean government's website, Zisco controls iron ore mining and beneficiation in Zimbabwe through its subsidiary Buchwa Iron Mining Company.
It currently exploits the Ripple Creek mine, which provides iron ore and limestone as feeds to the Zisco steelworks situated in the town of Redcliff in central Zimbabwe. The Zisco steelworks are sub-Saharan Africa's second-largest steel facility.