ESSAR Africa said that exporting beneficiated iron ore would be inevitable in future, as local production would exceed domestic requirements while selling steel on global markets would not be competitive.
But iron ore exports could only start more than five years after Essar concludes acquisition of Ziscosteel and after it has resumed operations.
The Mauritius registered Indian conglomerate pointed out that bulk steel manufactured in Zimbabwe would not be easily marketable in developed countries, as these need steel production in their own countries to create jobs.
The Herald Business is reliably informed there are strong concerns, especially at the Ministry of Mines and Mining Development, that the sale of NewZim Minerals would hand over most iron ore reserves to Essar. And the fears worsened when it emerged Essar had long term plans to export beneficiated iron ore deemed surplus to local steel making requirements.
Mr Coovadia said the country was endowed with low quality iron ore (jaspalite), never used for steel making worldwide, that could be beneficiated significantly and be used for steel making around the world.
He said that "You cannot produce all the steel here and ship it around the world. It is not competitive, number one. Number two, no one will buy it because of the steel making capacity in major economies worldwide.”
Essar resident director Middle East and Africa Mr Firdhose Coovadia made the remarks while addressing journalists, moments after meeting a Parliamentary Portfolio Committee on Industry and Commerce in camera.
His comments come in the wake of concerns raised within certain Government quarters that Essar would assume monopoly over iron ore reserves, which could create problems in future, as happened with chrome.
Essar is in the process of acquiring a 60% stake in mothballed NewZim Steel Limited (formerly Ziscosteel) and its mining arm NewZim Minerals, formerly Buchwa Iron Ore Mining Company. Bimco owned the majority of known iron ore deposits in Chivhu, which are believed to exist in large quantities, although they are of low quality.
But the Essar deal seems to have run into blind corners due to issues regarding transfer of iron ore claims from Bimco to NewZim Minerals. After the deal is sealed Essar will own 80% of NewZim Minerals.
(Sourced from The Herald)
