The government’s inconsistence on the multi-million dollar Essar–Ziscosteel deal is a bad sign for the country, which is desperate to attract foreign direct investment, a Cabinet minister has said.
Last week Mines and Mining Development minister Obert Mpofu told Parliament the deal would be reviewed amid a push to align the $750 million acquisition with indigenisation and empowerment regulations.
The country’s empowerment laws compel foreign-owned firms to dispose of 51% to locals.
Economic Planning and Investment Promotion minister Tapiwa Mashakada told the Parliamentary portfolio on Budget, Finance and Investment Promotion that implementation of the deal was facing serious challenges as a result of disagreements within the government.
The committee chaired by Goromonzi North MP Paddy Zhanda wanted clarity on what was hindering progress on the Zisco- Essar deal.
Zhanda said the impression that was being created was that Industry and Commerce minister Welshman Ncube signed the deal without Cabinet approval.
“Developments at Ziscosteel clearly show the confusion and policy contradictions within the inclusive government,” Mashakada said.
“A year after signing an agreement with the government, Essar Holdings cannot operationalise its $750 million project.”
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
He said the Essar deal was divided into two, NewZim Steel, where Essar took 54% equity and the New Zim minerals where Essar would take Buchwa iron ore and the Ripple Creek mines.
Mashakada said at the time the deal went through Cabinet, nobody protested.
“Buchwa mines and Ripple Creek mines were of low grades and because of the poor iron ore grades they (Essar) said why can’t, we get ore from Mwanezi?” he said.
Mashakada said the Mines ministry was now in the process of challenging ownership of some iron ore claims by a local businessman Rodrick Mumbire. He, however, said there were 20 other claims of iron ore in Mwanezi that were not subjected to court decision.
Mashakada said indigenisation should not be used to slow down economic recovery, but should benefit the country.
