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Cabinet rescues New Zimbabwe Steel Limited

By Voanews
After months of procrastinating, the Zimbabwe cabinet has resolved to press ahead with the USD 750 million Zimbabwe and Essar Africa Holdings deal, which was almost collapsing, by transferring mining claims to the Indian steel giant to save New Zimbabwe Steel Limited from crumbling.

Zim_steel

Industry Minister Mr Welshman Ncube and Mines Minister Mr Obert Mpofu told VOA that cabinet unanimously agreed Tuesday to immediately hand over to Essar the vast iron ore reserves held by Buchwa Iron Mining Company.

Mr Ncube said the Indian company will receive its share certificate as soon as the iron ore is transferred to Essar Holdings.

The Indian steel maker, which bought a 53% controlling stake in Ziscosteel, had stopped paying salaries of 3,000 workers as Harare said it was studying the agreement, which many say was grossly undervalued, with the intention of renegotiating.

The cabinet decision came at the same time as New Zimsteel employees complained in parliament Tuesday that they are now suffering following Essar’s decision to stop paying them.

Ncube said the mineral rights allegedly held by a former Ziscosteel worker will be spared when iron ore reserves are transferred to Essar.

Mines Minister Obert Mpofu said though the deal has to go ahead, the government still needs to renegotiate the iron ore rights held by New Zimbabwe Minerals.