30 November 2012

Zimbabwe: Essar Deal Will Not Collapse - PM

Prime Minister Morgan Tsvangirai has said he will not allow the Essar deal to collapse and assured Torwood residents that he is engaging the investors to pay workers before Christmas.

Speaking in Torwood, Kwekwe, PM Tsvangirai blamed corrupt Zanu PF officials for stalling the Essar deal because they had not received kickbacks.

"I know the Essar investors personally and they are keen to invest billions in this project. They want to change the facelift of Chivhu where Essar will extract iron ore at Mwanesi.

The Essar investors want to turnaround the fortunes of Torwood where the smelting company is located," PM Tsvangirai said

Essar acquired a 54% stake in the defunct ZISCO in March 2011 in a USD 750 million deal, which included taking over ZISCO's debts and liabilities. The Indian firm acquired an 80% stake while government remained with 20%.

Once the biggest integrated steelworks in Africa; Ziscosteel was choked by a USD340 million debt and other viability problems and stopped operations in 2008.

The Essar deal is the biggest investment Zimbabwe has clinched in years, and is expected to bring back life to Redcliff and Torwood, which had become ghost towns and also improve the welfare of over 3500 workers left jobless after the collapse of the "giant" steel maker.

In a bid to collapse the deal, Minister of Mines and Mining Development Obert Mpofu under the Indigenisation Act directed Essar to cede a 51 percent stake to the Zimbabwe Mining Development Corporation (ZMDC), after cabinet had approved the deal and New Zim Steel limited officially opened by President Mugabe.

Mpofu insists that the deal should be revisited.

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