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Breakthrough in Essar deal

News
THE $750 million Essar Africa deal for the takeover of Ziscosteel that could not be consummated due to legal challenges over iron ore mining claims, should now sail through after the Supreme Court on Tuesday ruled that the mineral reserves at Buchwa belong to Bimco, a subsidiary of Essar.

THE $750 million Essar Africa deal for the takeover of Ziscosteel that could not be consummated due to legal challenges over iron ore mining claims, should now sail through after the Supreme Court on Tuesday ruled that the mineral reserves at Buchwa belong to Bimco, a subsidiary of Essar. STAFF REPORTER

Bimco held the rights to iron ore claims for supply to Ziscosteel, before the Essar deal.

The Supreme Court ordered that the iron ore mining claims be transferred to Bimco, a move that will pave way for the operations of New ZimSteel, the successor company to Ziscosteel.

The ruling sets aside last year’s decision by High Court judge Justice Samuel Kudya in favour of businessman Roderick Mumbire.

The ruling stalled the consummation of the takeover of Ziscosteel by Essar, as the Indian investor intends to exploit the deposits as part of the takeover deal.

Deputy Chief Justice Luke Malaba, sitting with Supreme Court Justices Mary-Anne Gowora and Yunus Omerjee, heard the appeal by Bimco arising out of Justice Kudya’s judgment in favour of Bimco.

The Supreme Court agreed with the submissions made by counsel for Buchwa, Addington Chinake, that the gazetting of a cancellation of Mumbire’s claims on October 26 last year by the Minister of Mines had effectively determined the rights of the parties for the purposes of the appeal.

The Deputy Chief Justice ruled: “In light of the publication of Government Gazette, Vol XC No 60, General Notice 484 of 2012 dated 26 October 2012 cancelling the claims in dispute, the appeal is hereby withdrawn and that each party shall pay its own costs both in this Court and in Court a quo (the court from which the appeal was taken).”

The Supreme Court said the gazetting of cancellation of the claims was final in the circumstances.