via ‘NewZim Steel deal still alive’ | The Herald July 17, 2015
The deal to revive NewZim Steel (formerly Zisco Steel) is still alive and the Government is working with the investor on a revised implementation plan, a Cabinet Minister said yesterday.
Indian conglomerate Essar Africa Holdings acquired NewZim Steel in a deal worth an estimated $750 million in 2011.
The deal is, however, yet to be implemented due to squabbles over mineral rights and other technicalities.
Essar bought a 54 percent stake in Zisco Steel, with Government retaining 36 percent and private investors taking the remainder.
Industry and Commerce Minister Mike Bimha said the two parties were re-visiting the implementation process in light of some changes that had taken place since the deal was signed, which included fluctuations of steel prices on the international market.
“It’s still on. There are a number of issues we are still talking about. We have meetings with them in the next two weeks or so,” he said.
“By the end of July we should be able to know how we are going to implement the project. We still want to see Zisco resuscitated but because of the challenges we have to revisit our implementation process and see how we can go about it and these are the issues we are discussing.”
Minister Bimha refused to divulge some of the issues that were stalling implementation of the deal.
Once the biggest integrated steel works in Africa, Zisco Steel folded operations in 2008 after experiencing serious viability problems.
The steel maker owes various creditors over $450 million including KFW of Germany which is owed over $187 million while Sinosure of China is owed $59 million.
The deal was expected to turn around the fortunes of Redcliff town and also improve the welfare of over 3 500 workers left jobless after operations ground to a halt.
Annual steel output is expected to rise to 2,5 million tonnes when operations at the plant resume. – New Ziana.