INDUSTRY and Commerce minister Welshman Ncube has blamed Mines minister Obert Mpofu for stalling implementation of the multi-million Essar deal by routinely defying cabinet decisions, forcing the Indian company to mull pulling out.Without mentioning Mpofu by name but in apparent reference to him, Ncube told the Independent this week the situation at NewZim Steel Ltd is frustrating because “a former Industry and Commerce minister” is ruining the US$750 million deal. Mpofu was Industry and Trade minister when Ziscosteel collapsed.
“We have a former minister in charge of industries who says he will not comply with decisions of cabinet which is supposed to be the highest executive authority in the country,” said Ncube.
“The situation at NewZim is frustrating to the extent that management and workers held a day of prayer last week. Since last year, the new investor has injected more than US$50 million in a bid to assist us but we seem not to want to be assisted. One person is a stumbling block to the deal,” Ncube said.
He said even if his officials and those from the Mines ministry and NewZim agree on something, “that very person turns down everything”. “We take issues to cabinet and agree, but again this very person who was minister in charge of industries when Zisco closed vetoes everything,” Ncube said.
Mpofu has said Ncube signed the deal without his Mines ministry’s input and wants the deal reviewed.
Essar controls 54% of NewZim Steel, while the government and minority shareholders control the remaining stake. The company also holds 80% of the resources through its stake in NewZim Minerals, formerly Buchwa Iron Mining Company (Bimco).
Bimco held the rights to iron ore claims for feedstock into Ziscosteel operations.
However, Essar has failed to kick-start operations because the Ministry of Mines has refused to give it mineral rights to Mwanezi iron reserves, arguing it does not know the quantity and value of the deposits.
The ministry has even claimed there are 30 billion tonnes of high-grade iron ore reserves and Zimbabwe could lose billions of dollars if Essar was given unlimited rights to mine. President Robert Mugabe and cabinet have instructed Mpofu and Ncube to speedily resolve the issue but the problem remains unsettled.