President Robert Mugabe of Zimbabwe speaking at the 60th anniversary conference of the United Nations Food Programme., a photo by Pan-African News Wire File Photos on Flickr.
4 Aug, 2011, 07.21AM IST, ET
Essar Group to invest $750 mn to revive Zimbabwe Iron and Steel Co
KOLKATA: After year-long negotiations with the Zimbabwe government on ways to revive the Zimbabwe Iron and Steel Co (Zisco) the Essar Group on Wednesday said it has agreed to invest $750 million (about Rs 3,375 crore) to ramp up operations in the steel unit which is a market leader in Africa.
This development closes the transaction process that Essar started in August 2010, with a public tender through Essar Africa, for the majority shareholding of the Zimbabwe government in Zisco.
Essar Africa's $750-million investment will meet all the liabilities of the African government and Zisco. It would also include capital investment to revive the steel plant's capacity to 1.2 million tonnes and for working capital. Zisco has been operating at low capacity levels for the last several years due to shortage of working capital and funds for maintenance and modernisation of plant and equipment.
The two partners also announced the launch of two entities, NewZim Steel and New-Zim Minerals , as part of the agreement to demarcate steelmaking and mining operations.
Essar Africa will hold 60% share in NewZim Steel and 80% in NewZim Minerals, with the Zimbabwean government holding the remaining stake. "We will start work immediately on the project to revive Zisco.
As part of the deal, NewZim Minerals will take over 100% equity in Bimco --which owns mining assets of Zisco. It will revive the Ripple Creek iron ore to feed the steel plant's requirements in the short term," said Firdhose Coovadia, Essar resident director (West Asia & Africa).