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Zimbabwe completes review of new Essar ZISCO deal
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Friday, 02 Nov 2012
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It is reported that Zimbabwe government has completed a review of the ZISCO deal signed in 2011 for the takeover of the giant steel manufacturing firm by Essar Africa Holdings of India.

Industry minister Mr Welshman Ncube said that in 2011, the government signed a deal with the global steel conglomerate ceding part of its stake to the Indians for USD 750 million. Essar was also expected to cancel ZISCO's debts that had ballooned to over USD 300 million before the firm became NewZim Steel. However, mines minister Mr Obert Mpofu said the 54% stake given to Essar was more than the indigenization policy allowed.

He then blocked the transfer of iron ore claims at Ripple Creek and Buchwa to Essar, contrary to the initial agreement. The Indians, who had already paid the outstanding salaries of workers at ZISCO, then responded by halting the major investment.

Mr Ncube said that "Last week we finalized our review talks concerning the Essar deal. An implementation matrix has since been put forward to Essar and I understand this week they will meet in London to discuss it. I do not foresee further disturbances."

It is understood that the government finally resolved to allow the original 46:54% stake and transfer all the iron ore claims that ZISCO owned to Essar.

If Essar finally comes on board to invest at ZISCO, Mr Ncube said, the development will contribute much to ongoing efforts to revive the economy. At its peak, ZISCO employed 4000 workers and produced one million tonnes of steel per annum while contributing USD 1 billion to the Gross Domestic Product.

Top Zanu officials like Defense minister Emmerson Mnangagwa and Vice President Joice Mujuru were fingered as some of the government officials responsible for the collapse of the firm.

Source - The Zimbabwean

(www.steelguru.com)

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