HomeLocal NewsEssar deal faces collapse

Essar deal faces collapse

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The $750 million Essar Africa deal, aimed at reviving the now-defunct Ziscosteel, faces collapse following reports the foreign investor was considering pulling out, citing slow progress in concluding the deal.

Sources privy to the deal told NewsDay Essar managers were frustrated by protracted disputes over the transfer of iron ore rights to their India-based firm.

It is alleged a meeting between Essar, Industry and Commerce and Mines ministries to resolve the issue failed to take place on Monday. Essar resident director Firdhose Coovadia said: “The meeting didn’t happen yesterday (Monday), it’s likely to be held today (yesterday).”

Industry and Commerce minister Welshman Ncube on Monday said: “We are trying to finalise this issue of the transfer of assets. We are supposed to have a meeting today.”

Director of Enterprise for Industry and Commerce Stanislaus Mangoma also confirmed the meeting to resolve the outstanding issue had not materialised as a result of the failure by Mines and Mining Development minister Obert Mpofu to attend.

“The issue is that the Mines and Mining Development ministry wanted to verify the claims and it’s an elaborate process that involved mining commissioners,” he said.

Essar has insisted that the government transfers mineral rights so that it could have a long-term business plan.

Last week, Ncube told the Parliamentary Portfolio Committee on State Enterprises and Parastatal Management the deal was being held back over the transfer of iron ore rights to Essar but said there had been an agreement to transfer Buchwa and Ripple Creek mineral rights to Essar.

He said the handover had been delayed after it was realised that the current iron ore deposits at Buchwa were not sufficient for Essar to operate efficiently.

Ncube said Mwanezi mineral rights in Chivhu were still under negotiations and subject to a High Court judgment, but he believed the court would rule in favour of government.

The committee was concerned with the construction of a slurry pipe from Chivhu to Beira, Mozambique.

Mines and Mining Development secretary, Prince Mupazviriho, said he was not aware of the meeting but said technical teams were working on the issue.

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