timeslive.co.za, citing Mr Josphat Sachikonye CEO, reported that Essar Africa Holdings' financing deal with RioZim has fallen through over the Indian firm's desire to take 51% of the diversified miner.

Mr Sachikonye said “The deal could not be consummated as Essar wanted a controlling 51% interest in RioZim. This arrangement would have violated the indigenization and economic empowerment laws of the country.”

Following the development, the Zimbabwe Stock Exchange listed resources group was now pursuing other alternatives.

He said the Anglo Australian backed miner's ability to develop its Sengwa coal project, among other key investments, now rested on RioZim's ability to find new investors to undertake the pipeline of projects.

The company, which seeks to raise USD 40 million through a rights issue, mines gold, diamonds and base metals in Zimbabwe. Having been given an independent power producer's licence for its planned 2400MW power station, RioZim needs the money to develop the Midlands project as well as to reenergize other projects. It also needs cash for new explorations as well as to expand its Cam and Motor gold mine, Darwendale chrome operation and at least USD 1 million to revamp the Empress nickel refinery.

(Sourced from timeslive.co.za)