GOVERNMENT has repossessed Mwanesi iron ore deposits in Chivhu, paving way for Essar Africa Holdings to resume operations at NewZim Steel.
The deposits were subject to a legal wrangle as a former Zisco employee Mr Roderick Mumbire claimed ownership through a company called Bearable Prospects (Pvt) Ltd.
Mines and Mining Development Deputy Minister Gift Chimanikire yesterday said Government formally told Mr Mumbire that the claims belonged to the State.
"Government has repossessed the claims and we have since formally communicated this position to Mumbire through our Chief Mining Commissioner," he said.
"We invoked the Government's authority to take precedence over all minerals through the Government gazette about a week ago.
"The case is now closed and there is no question of compensation to Mumbire because he was illegally given those claims. That was a reserved area that was not supposed to be issued to anyone."
Deputy Minister Chimanikire said the mining commissioner in Gweru erred by giving Mr Mumbire the claims when he knew the area was reserved.
He said the mining commissioner had since been suspended.
Deputy Minister Chimanikire said repossession of the claims was going to facilitate the handover of the Mwanesi claims to Essar.
He said his ministry was going to comply with the Cabinet resolution that the claims should be transferred to Essar after a joint exploration to determine the quantity and quality of iron ore deposits.
Deputy Minister Chimanikire said Government would do everything in its power to ensure the Essar deal sailed through.
Industry and Commerce Minister Welshman Ncube said Essar Group indicated that they would only resume operations at NewZim Steel when they have been given a guarantee of claims ownership at Mwanesi
In the deal that was signed by the Ministry of Industry and Commerce, Essar through NewZim Minerals would own 80 percent of iron ore claims at Buchwa Mine, Ripple Creek and Mwanesi Ranch, while 20 percent is owned by the Government.
Essar has rejected reserves at Buchwa Mine, saying they were "too deep to exploit", while those at Ripple Creek were not sufficient to recoup their investment.
The ministry of Mines and Mining Development was against the shareholding structure of iron ore claims, saying Essar would pay only US$740 million for a deal that was worth US$30 billion.
Almost 4 000 Zisco and Bimco workers have been affected by the squabbles as they have not been paid since March after Essar suspended salaries amid indications that it had forked out millions in wages without production.