Friday, July 15, 2011
Friday, 15 July 2011 02:00
Parliament on Wednesday questioned the alleged sale of 80 percent of stockpiled Zisco iron ore to Essar Africa Holdings, as part of the takeover deal.
The iron ore stockpiles are believed to weigh more than 20 million tonnes.
In February, the Government sold its controlling stake in Zisco to the Indian conglomerate.
Under the takeover deal, Essar pledged to pay the whopping US$750 million required to recapitalise Zisco. The conglomerate also undertook to settle Zisco's huge debt overhang, estimated at US$240 million.
Industry and Commerce Deputy Minister Mike Bimha could neither confirm nor deny that the Government had parcelled out substantial iron ore reserves to the Indian steelmaker.
"The intricacies on whether Government sold reserves to Essar are areas subject to discussion with various ministries which include the Ministry of Mines," he said.
"The whole sense of Government selling shares to Essar was on the premise that Essar wanted to take over Zisco's US$240 million debt. Our principals saw no reason to stop the deal," he said.
Kwekwe Central Member of the House of Assembly Mr Blessing Chebundo had sought clarification on the issue.
Essar has said it plans to construct a slurry pipeline from Zimbabwe to the Mozambican port of Beira, to facilitate the smooth exportation of ore from Zisco.
Mozambique has already approved Essar's plans to build the pipeline. Essar would be able to export 20 million tonnes of iron ore annually.
Similarly, the Indian firm would export the same amount of coal from Zimbabwe to Mozambique every year.
The company has vibrant steel works in Canada, the USA, India and Indonesia. It plans to ramp up steel production at Zisco to 2,5 million tonnes over the next three years.
Essar has not started work at the Zisco plant as it is asking Government for guarantees of consistent power and water supplies, in addition to tax concessions.
Before its collapse in 2000, Zisco was the largest integrated steel- works in Africa, with capacity to produce one million tonnes every year.
The revival of Zisco is expected to create jobs and boost Zimbabwe's export earnings.
- New Ziana.