Takunda Maodza
Senior Reporter
GOVERNMENT has directed Essar Holdings to enter into a joint venture ownership arrangement with ZMDC for the revival of NewZim Steel (Ziscosteel) with the Indian firm ceding 51 percent shareholding to the parastatal.

This is in accordance with the country’s indigenisation laws. Cabinet approved the decision recently.
Essar acquired a 60 percent stake in the giant steelmaker in March last year in a US$750 million deal.
Government has since advised the ZMDC to engage Essar and draw up the necessary joint venture arrangements.

Documents in The Herald’s possession show that the Ministry of Mines and Mining Development has apprised the Ministry of Industry and Commerce on the development in a letter dated July 2.

“Cabinet has directed that Essar Holdings Limited comply with the Indigenisation and Economic Empowerment Act on a 49/51 (percent) basis with the Zimbabwe Mining Development Corporation.

“The Zimbabwe Mining Development Corporation is by copy of this letter requested to engage with Essar Africa Holdings and draw up the necessary joint venture agreements,” reads a letter from Mines and Mining Development secretary Mr Prince Mupazviriho to Mrs Abigail Shonhiwa, the Secretary for Industry and Commerce. In the letter, Government indicated that it was ready to transfer mining rights in Redcliff  and Buchwa in line with a Cabinet resolution on the matter to NewZim Steel.

“The requisite transfer fees and duty shall be for the transfereer’s accounts. The Ministry of Mines and Mining Development also wishes to advise that: the claims that are under legal dispute will be dealt with upon a favourable outcome by the Supreme Court of Zimbabwe whereupon issues and conditions of their transfer will be discussed,” Mr Mupazviriho said.

He invited Essar for further discussions.
“The ministry also wishes by copy of this letter to invite Essar Africa Holdings to come and discuss the terms and conditions for the renewal of Special Grant numbers 2104 and 5123 with the technical teams from the Ministry of Mines and Mining Development,” Mr Mupazviriho added.

The change of ownership at NewZim Steel comes after Mines and Mining Development Minister Obert Mpofu last month said the Essar deal should be revisited.
He argued that the Indian firm should not be allowed to pay only US$700 million for resources worth over US$30 billion.
Giving Oral evidence before the Parliamentary Portfolio Committee on Industry and Commerce, Minister Mpofu said he would only transfer mineral rights of iron ore to

Essar only for actual value, as part of the conditions he wanted observed on the deal.
Minister Mpofu further made it clear that Essar must comply with the country’s indigenization policy and should not be allowed to export iron ore.