via Zim finalises $750m Essar deal – DailyNews Live 11 MAY 2014
Zimbabwe says it has finally concluded a $750 million takeover deal of its giant iron processor Ziscosteel — now NewZim Steel — by Indian firm Essar Africa Holdings Limited.
The deal, under which Essar acquired a 54 percent stake in the Kadoma-based steel maker, was agreed to in November 2011, but stalled due to challenges including delays in the handover of iron claims.
Industry minister Mike Bimha said yesterday Essar officials “reaffirmed their commitment to the project and agreed to complete the process”.
He said the move paves way for the operationalisation of NewZim Steel and its subsidiary NewZim Minerals with immediate effect.
The resumption of NewZim Steel operations —dormant for over five years — will bring relief to more than 3 000 workers, who have gone for almost two years without salaries after Essar suspended payments in March 2012.
“The agreement heralds a new chapter in the economic growth of Zimbabwe, for all Zimbabweans and particularly for the communities in and around Redcliff and Chivhu,” Bimha said.
According to the deal, Essar would acquire 54 percent of NewZim Steel and 80 percent of NewZim Minerals, while the government would take the remaining shares in both firms.
Bimha noted that in relation to the original bid provisions, the initial phase of the project would involve the revival of NewZim Steel to a production capacity of 500 000 tonnes per annum of liquid steel within 24 months.
He said the production would be increased to 1,2 million tonnes per year in the second phase.
“In parallel, NewZim Minerals will work on exploration and development of an iron ore beneficiation project. Further, the iron ore from
Chivhu will be blended with iron ore from Ripple Creek to improve the quality of feedstock to the steel plant,” he said.
The minister added that in order to ensure that the revived steel plant was globally competitive, considerable time and effort was expended in readjusting the revival process.
“This readjustment of the plant will result in a substantial number of facilities at the plant being replaced entirely with the new steelmaking technology which will be undertaken jointly with the
Chinese and Indian Engineering Procurement and Construction contractors,” said Bimha.
NewZim Steel, a major foreign-currency earner before independence in 1980, stopped operations in 2008 at the height of an economic crisis, due to a lack of capital.
Prior to the takeover, government held a controlling stake in the steel giant — once the largest integrated steelworks in the region.
COMMENTS
Lets see if it all happens, or will another greedy ZANU pig put a spanner in the works?
Having taken it back and reptile the rewards they now split on again taking the rewards where is the money? In zanupf bigwigs pockets of course plus all the kickbacks. Having stolen Zimbabwe blind they’re selling state assets to line their pockets.
Its that time of the year again when government has to threaten to bring relief to the suffering workers at ZISCO.
We are tired of the stories of this project we want action I mean workers going back to work they have surfaced enough these guys enough is enough
This is interesting “news”. It should be good news to the people of the Midlands and the Country as a whole. However, one needs to sift between an overly optimistic opinion and the technical realities on the
ground.
Firstly, the Tecnical issues. This Plant has not been functional for over 6 years during which it has been plundered, vandalised and succumbed to the effects of the elements. In other words, its a rusted out old plant. At the time of closure in 2008, it was hardly a fully functional unit. The promise by the investor is to bring it back into production within 24 months. How realistic is this? Anyone with any technical knowledge knows what it takes to bring a Steel Plant of this size back to functionality.
Secondly, there are issues with Coal, Rail movement of Coal, Oxygen and Electric Power.
Thirdly, there are the International Markets. People are switching off opperational, viable Plants all over the world because of depressed international markets, including countries as close as South Africa and Zambia. How viable is it to bring this Plant on-line at the moment?
I really hope for this deal to happen and to bring relief to all those families in Redcliff and Kwe and some ecnomic activity to all concerned. However, by taking so long to make this decision, have we perhaps not missed out on the best opportunity and market conditions to optimise on the sale?
Are they going to pay the back wages?
Kadoma based?
This is like flogging a dead horse, the steel market is dominated by china locally so not much will happen in Zimbabwe. One needs all the associated manufacturing to be located in redcliff like steel presses etc to add value to the manufactured steel. That costs a lot of investment which isn’t going to happen under zanupf.