Zim allocates Essar 20 provisional claims


Harare May 28, 2012 (New Ziana)-The Zimbabwe government has resolved to allocate 20 claims to New Zim Steel so that mining can resume while the issue of mineral rights is being concluded, a cabinet Minister said on Monday.

Government has not yet transferred mineral rights to Indian firm Essar Africa to enable it resuscitate operations at the defunct steel mine which ceased operating in 2008.

Essar Africa bought a 54 percent controlling stake in Zisco (now New Zim Steel) and has been paying salaries which have since been suspended as the acquisition deal is yet to be finalized.

Industry and Commerce Minister Prof Welshman Ncube said cabinet resolved to give the 20 claims to allow New Zim Steel to produce so it can resume paying workers.

“Cabinet agreed to offer 20 claims to Essar while awaiting the conclusion of the Supreme Court case on mineral rights,” he said.

He was appearing before the Parliamentary Portfolio Committee on Industry and Commerce which is chaired by Buhera North legislator William Mutomba.

Prof Ncube also said Essar did not have an obligation to pay workers before the resumption of production.

“The agreement says existing workers should be taken over by the new company and should be paid. It presupposes that the agreement has been fulfilled. Essar will have an obligation to pay all that but we have not met our preconditions,” he said.

Appearing before the same committee last week, workers said they were informed that they would only start receiving salaries after the deal is concluded.

Ncube said Essar has been paying workers out of its goodwill because the deal has not been concluded and that government was responsible for the delay.

“The payment of salaries was an act of goodwill. They are not in default because everything has not been concluded. Once we give them mineral rights they can resume,” he said.

“If we as government do our part, then we can point fingers at them. Until we do our part as government we cannot blame them,” he added.

Essar has spent about US$32 million paying workers salaries and benefits.

New Ziana