Felex Share, Harare Bureau
THE $1 billion Zimbabwe Iron and Steel Company (Zisco) project is on ice pending Government and the Chinese investor R and F reconciling a number of issues underpinning the deal, a Cabinet Minister has said.
Industry and Commerce Minister Mangaliso Ndlovu yesterday said Government was waiting for a response from the investor on a number of issues that needed clarification.
He said Government was seeking a mutually beneficial deal over the valued asset that has been set back several years due to financial and operational issues.
“There was an old standing agreement but we were just working on making sure all the parties understand the terms,” Minister Ndlovu said.
“We had issues that we needed them to clarify and we are still at that process. We want to make sure there is a win-win situation. We can’t have an agreement where we are not confident of Zimbabwe coming out with something that’s why we are looking at it clause by clause.”
The deal was sealed during the old dispensation of former president, Mr Robert Mugabe.
It entailed revival of the Redcliff-based steel making company by Chinese firm R and F, which would invest $1 billion.
Minister Ndlovu said both parties’ interests should be protected in the deal.
“It is taking longer than we expected but I think very soon we should be making progress,” he said.
“If we discover that the positions are far apart to reconcile we can open up again or find another option. As it stands we have given them our issues that we need clarified and addressed and they are working on that. They were affected by their New Year holidays and soon we should be having progress.”
The Minister, however, did not reveal the sticking issues.
Following the review of the deal under the new dispensation led by President Mnangagwa, it is emerging that the transaction had been negotiated in bad faith.
The investor, according to sources, could have literally acquired Africa’s largest steelworks plant for “nothing”.
Apart from the mineral claims held by Zisco’s subsidiary, some of the assets that had not been factored when the deal was negotiated include the company’s large real estate and a huge stockpile of scrap metal with estimated value of $40 million.
Government is said to have come up with fresh conditions that would form the basis for negotiations.
Zisco closed operations in 2008 after it was hit by operational and financial challenges.
Essar Africa Holdings, a unit of India’s Essar Group, had agreed to invest in Zisco in 2011 but the deal collapsed in 2015.
This was after a similar deal with another Indian company Global Steel Holdings, failed to materialise.