via New Zimsteel ready to resume operations | The Herald December 23, 2014
ACTING President Cde Emmerson Mnangagwa has said New Zimsteel, formerly Ziscosteel, is ready to resume operations after the Essar deal finally came to fruition.
The Indian Conglomerate, Essar Holdings took over the operations at the Zimbabwe Iron and Steel Company (Ziscosteel) in September 2011 amid pomp and fanfare in a deal worth $750 million following the closure of Ziscosteel in 2008 at the height of the country’s economic challenges.
However, three years down the line, operations have not commenced. This has resulted in the 2 500 strong workforce going for months without salaries.
Speaking in Chirumanzu on Friday during the commissioning of A1 settlement permits in the Midlands, Cde Mnangagwa said he had toured the steel giant and operations were set to resume as some sticking issues which had derailed the deal had been ironed out.
“We toured New Zimsteel on our way here. We want to see to it that the company begins operations as soon as possible. Essar can now begin production since there are no longer obstacles in the way.
“Very soon production will resume at New Zimsteel and this will go a long way in reviving the economy,” he said.
If the deal is operationalised, Essar is set to spend $436 million to operationalise New Zimsteel.
Essar acquired a 54 percent Stake in Ziscosteel from government and announced plans to increase production at New Zimsteel up to 14 million tonnes a year from peak production levels of close to a million tonnes of steel a year.
As part of the investment deal, Essar has also committed to take over $340 million government debt obligations in respect of the external debt owed by Zisco to foreign entities such as KFW of Germany and Sino Sure from China.
Under the deal, Essar also acquired 80 percent of Zisco’s mineral assets in Mwenezi, Buchwa and Bimco.