Industry and Commerce minister Welshman Ncube has expressed concern over delays by the Ministry of Mines and Mining Development in releasing mineral rights to Essar Holdings to kick-start its operations.
The Mines ministry undertook to release the rights to the Indian firm last month, but missed the deadline, scuttling the much-anticipated plans to restart operations at the once-vibrant iron and steel manufacturing firm Ziscosteel, now NewZim Steel. “Nothing has changed,” Ncube said.
“We are still waiting for the Ministry of Mines to release the mineral rights.
“They had agreed that they will register the rights for Buchwa Iron Mining Company, Mwenezi Ranch. “They are two weeks behind the schedule and Essar is frustrated, just as much as we are, and now everyone is in a state of limbo.”
Contacted for comment, Secretary for Mines Prince Mupazviriho said the ministry was waiting for feedback from a team working on the issue. “We are supposed to have the meeting with the team today,” he said.
The government entered into the $750 million deal in 2011, but it has failed to make the deal materialise as a result of bureaucracy.
The investment was expected to turn around the fortunes of Redcliff town and also improve the welfare of over 3 500 workers who had been idle for many years after production at the steel company came to a grinding halt.
Essar took over 54% of Ziscosteel through the deal and agreed to settle the company’s $300 million debt.
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New Zimsteel has the capacity to produce one million tonnes of steel per year, but is currently reeling under sanctions, debts, inadequate working capital and ageing equipment. The deal was one of the few that government embarked on to commercialise some of its parastatals, but it has failed to live up to expectations.
The government is working on the restructuring of parastatals at a very slow pace.
