14 February 2013

Zimbabwe: President's Office Takes Over Essar Deal

The multi-million dollar Essar-Ziscosteel deal could finally be concluded, after negotiations were taken over by the President's Office.

This was said by Ziscosteel board chairman Nyasha Makuvise, who revealed that the executive intervened after disagreements between Industry Minister Welshman Ncube and Mines Minister Obert Mpofu were stalling the process.

Makuvise said an inter-ministerial committee and Essar are now working to resolve some outstanding issues, and added that he was confident a deal would be reached soon.

Once complete the deal will give Essar a 60% majority stake in Ziscosteel, which has since been rebranded NewZim Steel.

According to the Herald newspaper, Makuvise was speaking before the portfolio committee on Industry and Commerce and was accompanied by NewZim Steel chief executive Alois Gowo.

The two told the committee that expediting the deal would help improve the plight of over 3,500 workers whose salaries were suspended by Essar in March last year.

In 2010 the government signed a $750 million deal with Essar to revive Ziscosteel, but implementation has been delayed by a tug-of-war between industry and commerce and the mines ministries over its terms, including access to iron ore reserves.

Mines Minister Mpofu wanted to revisit the terms of the deal, arguing that iron ore reserves were worth more than $30 billion and not the $750 million that Essar stands to pay under the current deal.

Efforts to get a comment from Industry and Commerce Minister Welshman Ncube, were fruitless as his mobile number could not be reached.

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