Friday, November 04, 2011
Friday, 04 November 2011 00:00
Golden Sibanda Senior Business Reporter
BUREAUCRATIC issues on iron ore claims, which have delayed the revival of NewZim Steel Limited, will be cleared in the next two weeks, a Cabinet minister has aid.
But The Herald Business understands problems affecting NewZim Steel's revival might not be fully resolved within the timeframe indicated by Industry and Commerce Minister Professor Welshman Ncube.
This is because there is a pending court case on a dispute over mineral rights to the Mwanesi (Chivhu) iron ore deposits, the biggest known iron ore reserves in the country.
Deputy Minister of Mines and Mining Development Gift Chimanikire said the Mwanesi deposits were erroneously allocated to an individual, a former employee of Ziscosteel who had inside knowledge about them.
"The claims have not yet been transferred to NewZim Steel.
"They are registered in the name of an individual, which is improper because it's a reserved area," he said.
"When we discovered the anomaly, our chief mining commissioner annulled the registration because our Gweru mining commissioner erred in pegging for the individual in a reserved area."
In an earlier court contest, the ministry lost out following a default judgment in favour of the individual holdings rights to Mwanesi iron ore deposits after the ministry failed to appear in court due to a communication breakdown between the Harare and Gweru offices.
The Ministry of Mines has appealed the ruling.
Deputy minister Chimanikire said while NewZim was entitled to some claims it would be wrong for them to have most of the reserves in their name, as they would not utilise them all at once.
The issue of how much NewZim will be entitled to would be resolved after the wrangle over the ownership of Mwanesi iron ore deposits has been completed.
NewZim Minerals holds rights to the bulk of the country's known iron ore deposits, believed to run into billions of tonnes.
Sources say this would and this has been seen creating a monopoly.
It is also feared that Zimbabwe would be left with no room to manoeuvre in the future if it wanted to expand the steel manufacturing sector after selling most of its iron ore mineral rights to Essar Global Limited.
This has reportedly prompted the Ministry of Mines and Mining Development to move in and demand that the agreement on the mineral rights be revisited to ensure an equitable mineral rights ownership scenario.
But Minister Ncube yesterday said it was "a little bureaucratic complexity" that had stalled the NewZim Steel revival and that challenges around this should be cleared by November 15.
He said the challenge was only that the iron ore claims were registered under the then Ziscosteel (now NewZim Steel Limited) and Buchwa Iron Ore Mining Company (now NewZim Minerals limited), which has to change. Minister Ncube said there was unanimity in Cabinet on the need to revive the firm, adding "we should have moved faster on the issues of Essar".
"It is only that Ziscosteel has iron ore mining claims under its name and Buchwa Iron Mining Company had its own mining claims also under its names.
"Now with the formation of New Zim Steel Limited and NewZim Minerals Limited all we are saying is for the Minister of Mines and Mining Development to write these claims under the new names," he said.
Minister Ncube said they could not ascertain the amount of iron ore reserves that was not provided "but we are aware of the number of claims that should add to eight".
"We have written to the ministry responsible and agreed that by November 15, 2011 everything should be in place," said Minister Ncube.
There certainly is more to the issue than meets the eye, as it has emerged the Ministry of Mines and Mining development wanted to release only what NewZim Steel requires in view of the size of their operations.
Essar Global indicated it had plans to export what would be excess to its local steel manufacturing requirements. Minister Chimanikire said this was to avoid monopoly, as has been the case with Zimasco and ZimAlloys. Essar Global, through Essar Africa Holdings, had put conditions for the revival of NewZim Steel and these included guarantees on power, transport, fiscal concessions and mineral claims (iron ore and coal claims).