Essar execs expected in Zim

via Essar execs expected in Zim – DailyNews Live 3 July 2014

HARARE – Essar Africa Holdings Limited (Essar) executives are expected in Zimbabwe this Friday to engage the Mines ministry over plans to establish a thermal power station in the country.

The Indian steel giant, which acquired a 54 percent stake in Zimbabwe’s iron processor NewZim Steel – formerly Ziscosteel —in a $750 million deal, intends to mine and utilise coal from Hwange for the planned power station.

The station is expected to generate 300 megawatts (MW) and will guarantee uninterrupted power supply to NewZim Steel, which has been dormant for over five years. Industry minister Mike Bimha yesterday told Parliament that the Indians not only needed the coal to feed the power plant, but also coking coal for iron processing.

“There are sites they have already identified and they will… be meeting the Mines ministry and officials from Hwange Colliery,” he said.

“They will also be putting up a captive power plant at NewZim Steel processing plant. This is the plant which will generate power from fumes and gas,” he said.

He added that it would take two to three years to complete construction of the thermal power plant.

Bimha also noted that government and Essar had agreed to initiate other related activities at NewZim Steel in order to generate revenue while working towards the reconstruction of the processing plant, which is expected to be complete in 2016.

“One of them is that we will import steel billets that will then be channelled to Lancashire Steel to produce wire and other related products. Within six months Lancashire will be operating,” he said, adding that they would also import other steel products for sale through existing NewZim Steel distribution centres.

Industry experts assert that the setting up of a power plant is a step towards making the NewZim Steel plant self-sufficient and efficient. Essar has indicated that it would build a 500 000 tonne steel plant in Zimbabwe for $650 million in two years, revising its initial deal.

The initial plan was to upgrade the existing Kwekwe steel plant and produce 1,2 million tonnes of steel.

This is not the first time that Essar has built a power plant to steer its operations.

In 2007, after acquiring Algoma Steel for $1,63 billion in Ontario, Canada, the group established a 100MW power plant based on waste gas to reduce costs.