Essar awaits New Zimsteel share certificates

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New Zimsteel majority shareholder Essar Africa Holdings is yet to commence work at the giant steel plant awaiting the government to transfer mineral rights to the new company.

Essar, Middle East and Africa resident director Firdhose Coovadia said the group was ready to start work once the government transfered ownership of the plant from Ziscosteel to New Zimsteel and all mineral rights from Buchwa Iron Mining company to Zim Minerals.

“We haven’t started operations at New Zimsteel. At the moment we are just observing, but once we hold title and share certificates, we promise the nation that we will start producing steel within 18 months from date of transfer. We are also committed to paying workers all the money owed to them by Ziscosteel,” Coovadia said.

He said Essar was in Zimbabwe for a long relationship and were not looking at looting ore from Ripple Creek. This was demonstrated by the setting aside of $10 million for development of local entrepreneurs.

Industry minister Welshman Ncube said there was nothing Essar could loot at the steel plant because it was now a shell.

“Essar can’t loot from Ziscosteel because of the nature of the agreement, which says they need to fix blast furnace number 4 then produce 1, 2 million tonnes of steel in the first 18 months 2,2 million tonnes in 24 months,” said Ncube.

“The deal also demands that they should satisfy the local market first before exporting. That company was looted by people who came way before Essar and all they can do is fix that problem.”

Coovadia said the payment plan of settling the salaries and wages owed to workers would only be discussed after a board for New Zimsteel had been set up and after consultations with the works council.

“We are committed to settle all the debts owed to the workers, but a payment plan will have to be approved by the board before it is implemented. Once the New Zimsteel board is appointed we will be able to approve the payment plan in consultation with all the six representatives of the works council,” he said.

Salaries so far accessed by workers were being treated as loans until an agreement had been reached.

Over $4 million has been loaned to New Zimsteel to meet salaries and wage bill, according to Essar.