Maravi

(HERALD) Mining giant suspends salaries, lack of production cited

Mining giant suspends salaries, lack of production cited
Tuesday, 15 May 2012 00:00
Takunda Maodza recently in REDCLIFF

NEWZIM Steel has suspended paying salaries to its workers amid indications Essar Africa Holdings has forked out millions in wages without production.

It is understood that Essar is reluctant to continue pumping more money into NewZim Steel which is yet to get iron ore mining rights from the Government. The Redcliff-based company has over 1 500 workers whom it owes over US$12 million, a debt it assumed from the defunct Ziscosteel.

Essar is now the majority shareholder in NewZim Steel after Government sold its 54 percent stake in the company.

Sources at NewZim Steel said management announced the decision to suspend salaries last week. Workers’ representatives met Industry and Commerce Minister Welshman Ncube over the matter in Harare last Thursday.

“They were paying us salaries from January to March this year,” said one of the workers.

“Management announced last week that it was suspending payment of salaries citing a number of reasons.”

It is understood that Essar is awaiting finalisation of the deal with the Government before it fully invests in the company.

“Essar are saying Government is yet to conclude the deal it entered with the Indian company and they have pumped a lot of money so far in salaries at a time when there is no production,” a source said.

“A delegation of workers went to Harare last week and met Minister Ncube and Essar board chairman. They wanted to know the reasons for the suspension of salaries and the delay in the conclusion of the deal.”

Minister Ncube yesterday confirmed the development.

“That has been the case for the last four to five weeks,” he said.

Minister Ncube also confirmed meeting NewZim Steel workers over the issue.

“I did meet the employees. Essar is saying we have been paying salaries since March last year and we (Government) are failing to sign a document transferring mining rights,” Minister Ncube said.

He hinted that the Essar deal will not materialise unless Mines and Mining Development Minister Obert Mpofu issued the new investors a certificate for mining rights.

Minister Ncube bemoaned the delay in the conclusion of the deal.

“We are taking 14 months to sign a document which in a normal country should take a week,” he said.

Minister Ncube said the deadline for the finalisation of the Essar deal was April 13. But Minister Mpofu last night said: “That issue does not fall under my ministry. Talk to Ncube.”

Workers report for duty everyday, but there is no production taking place.

Labels: ESSAR AFRICA HOLDINGS, MINING

posted by MrK @ 2:03 PM