Zimbabwe still talking to ESSAR about ZISCO but project stalled by low prices for iron

Zimbabwe is still negotiating with the Indian company Essar the issue ofreviving ZISCO but the talks have been stalled because the world prices of iron and steel are now too low.

“We are looking forward from those who are doing projections on minerals and such other products; they are saying five years from now, prices will be low,” the Deputy Minister of Industry and Commerce Chiratidzo Mabuwa told the Senate yesterday.

“That has affected us because we were negotiating our deal with ESSAR, our investor with whom we had taken some years negotiating with. We are not saying ESSAR has gone back. ESSAR is there; we are still negotiating but because of low prices, we are looking at other alternatives because there has been a negative impact on that investment. ESSAR and Government are still negotiating looking at how the pricing has affected the roll out of these prices.”

Mabuwa was responding to a question from Senator Dorothy Khumalo who wanted to know whether it was true Essar had abandoned the deal and left.

The government and Essar signed a $750 million deal for the Indian company to run Zisco in 2011.

Q & A:

+SENATOR KHUMALO: Thank you Madam President for allowing me to ask my question. My question is directed to the Minister of Industry and Commerce. Where are we in terms of reviving ZISCO Steel so that we have our iron and steel for the development of this country? Is it correct to say that ESSAR has since left?

+THE DEPUTY MINISTER OF INDUSTRY AND COMMERCE (MS. MABUWA): Thank you Madam President. I would like to thank Senator Khumalo for the important question which is about reviving ZISCO Steel.

What I can say before this Senate is that the issue of reviving ZISCO Steel is still a Government programme. Government is seized with that programme but I would like to state it clearly that world prices for iron and steel are far too low. We are looking forward from those who are doing projections on minerals and such other products; they are saying five years from now, prices will be low.

That has affected us because we were negotiating our deal with ESSAR, our investor with whom we had taken some years negotiating with. We are not saying ESSAR has gone back. ESSAR is there; we are still negotiating but because of low prices, we are looking at other alternatives because there has been a negative impact on that investment. ESSAR and Government are still negotiating looking at how the pricing has affected the roll out of these prices.

Of course, there will be a difference from what we had initially agreed on. We will inform the country about the difference and impact of prices at the right time. That will enable us to have an alternative on how to revive ZISCO Steel.

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