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BizDay Zimbabwe

New hope for New Zim Steel, Redcliff

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ESSAR Africa Holdings (Essar) representatives and former Zimbabwe Steel Company (Zisco) employees are expected to travel to Redcliff to spearhead the resuscitation of New ZimSteel, a government official has said.

Industry and Commerce secretary Abigail Shonhiwa said Essar resident director of Middle East, Africa and Turkey, Firdhose Coovadia confirmed that a team, which includes technicians from India, would soon be in the country.

Shonhiwa said this when she appeared before a parliamentary portfolio committee on Industry and Commerce yesterday
“In the next 24 to 48 hours, a team will be in Redcliff to meet employees and creditors to resuscitate operations,” Shonhiwa said.

She said regarding the discussions in Redcliff, some equipment would be rehabilitated, but the blast furnace will have to be replaced and this would happen before the conclusion of the deal.

“Our interest and desire is to see some operations taking place,” she said.

Shonhiwa said the ministry was aware that the employees at New ZimSteel were in dire straits.

Shonhiwa said New ZimSteel owed creditors over $120 million in services provided to the company.

In March 2011, the government and the India-based investors agreed on a $750 million takeover of Ziscosteel, but the deal has not been consummated due to haggling over iron ore deposits.
The deal was first signed in August 2011, giving Essar 54% control of the new company NewZim Steel.

As part of the deal, Essar, was also awarded 80% ownership of NewZim Minerals with the government holding the remaining 20%.

The Indian company has, however, failed to commence operations after the government moved to reverse its decision on the grounds that the value of its iron ore claims should be verified first. NewsDay

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