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Published On: Tue, Dec 2nd, 2014

Essar hires Chinese firm for Zisco restart

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Essar Africa Holdings has sub-contracted Chinese firm FDM to undertake “early stage” preparations for the construction of Ziscosteel’s mothballed steel plant, Industry and Commerce Minister Mike Bimha has said.

Minister Bimha said a team of engineers and technicians from China and India were on the ground at the closed Redcliff-based steelmaking company.

He said the process to revive Zisco was on course.

The Indian company agreed in March 2011 to acquire 54 percent of Government’s 90 percent stake in Zisco in a deal expected, then, to result in a capital injection of $750 million.

“Essar has been working with other contractors who are doing early stage work to rebuild the plant. Remember we said 60 percent of the plant has to be taken away,” he said.

“Essar has subcontracted a company called FDM from China. Engineers and technicians from China and India are on site, as we speak,” he said, adding he recently briefed Cabinet on progress.

Minister Bimha said Government line ministries and departments that deal with essentials needed for the revival of Zisco had over the last few months been working to enable the Indian investor to restart the firm.

At its peak, Zisco employed 4 500 workers and had capacity to produce one million tonnes of steel annually, before it stooped operations as a result of serious working capital challenges it faced in 2008.

There has been concern, especially from contracted Zisco, workers about the delayed restart of the closed steel making plant, amid claims of sticking issues between Government and Essar.

“There is progress; I briefed Cabinet two weeks ago on the operationalisation of NewZim Steel. Cabinet is satisfied with the progress. Cabinet is happy and would like us to keep the momentum,” he said.

Minister Bimha dispelled rumours that there was a misunderstanding between Government and the investor, which threatened to derail the multimillion-dollar deal to bring the former steelmaking giant to life.

“There is a Chinese company contracted by Essar, it is not a Chinese investor. The Chinese company is involved in the construction of the plant. We are no longer talking about policy issues or which investor it will be given to, we are talking about implementation,” Minister Bimha said.

Sources at the company also confirmed last Friday that there were about 33 individuals of Chinese and Indian origin that were frequenting the firm’s premises, but professed ignorance about their business.

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