Indian conglomerate Essar said on Wednesday it expected to wrap up a $750 million investment in Zimbabwean steel maker Zisco within 2-3 weeks, with first production arriving in 12 to 15 months.
The African unit of Essar Group, in November agreed to buy 54% in the Zimbabwe Iron and Steel Company (Zisco), with the government keeping 36% and 10% owned by minority investors.
“We are (also) in the process of finalising an investment in some coal operations in Zimbabwe,” said Essar director of Middle East and African operations, Firdhose Coovadia in Cape Town.
“These are both metcoal and thermal coal which will both supply the steel-making business but going forward also be available for export.”
The coal mines would also support plans by Essar to invest in Zimbabwe’s energy sector and help ensure uninterrupted power supply to Zisco.
Zisco is the first privatisation under a power-sharing government formed in 2009 by bitter rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai.
Once a major foreign currency earner, Zisco is now saddled with about $240 million in debt, which Essar will take over.
Coovadia told a conference in Cape Town the company had also agreed to build a 20 million tonne per year coal terminal and a iron ore terminal of the same size in Mozambique’s Beira port.
“We agreed with the government of Mozambique the construction of two new terminals. We will be constructing a 20 million tonne per annum multi-user coal terminal at Beira and a 20 million tonne iron ore terminal also at Beira,” he said.
The Mozambique government has said it expects to export one million tonnes of coal a year from July, mostly through the Beira and Nacala ports.
Mozambique has vast unexploited coal reserves and about 100 exploration licence for the metal.