The company, which was officially handed over to its new owners,Essar Africa holdings Limited (EAHL), by President Mugabe on Wednesday has been split into two companies known as NewZim Steel Private limited and NewZim Minerals Private Limited.
The new owners are expected to begin a new chapter in the economic growth of Zimbabwe, particularly in Redcliff which had become a ghost town as activity had died at the steel making plant, the backbone of the town.
Mugabe said he was excited to be launching the company which he said would see the rejuvenation of the history of steel making in Zimbabwe.
“I am thrilled to be a witness to the awakening of a sleeping giant. We chose Essar particularly because unlike other investors, they are not coming to scoop our wealth but instead we will beneficiate our chrome and there shall be no exportation of our minerals. It is unfortunate how late we realised we were being exploited having allowed most of our minerals to be exported.”
Mugabe blasted the former Zisco managers, accusing them of gross incompetence and betraying the trust that had been invested on them to the applause of the general workers. The president said he had been disappointed especially by blast furnace number 4 as the managers had let chrome ore dry up in the furnaces rendering them unusable.
“I am very disappointed in some of our people. There is no reason why those who were in charge should have allowed the plant to get into the situation it is in. They destroyed the resources and now they are nowhere because they know what they did was a crime. They migrated to Botswana and South Africa,” said Mugabe.
Mugabe also blasted the West for shunning to invest in Zimbabwe and said as a nation they will look East. He admitted Zimbabwe had tried to look West and had been snubbed adding the look East policy was beginning to bear fruits as India had decided to invest on one of the major companies in Zimbabwe.
Speaking at the launch, Minister of Industry and Trade, Welshman Ncube, could also not hide his joy as he was all smiles after the President indicated that all credit belonged to him.
“This project…is evidence of how serious we are as a Unity government about restoring the past glory of Zimbabwe’s steel Industry. While this deal is a signal that serious players are investing in Zimbabwe, it can also be a catalyst for attracting further Foreign Direct Investment (FDI).” said Ncube.
He added “We are pleased with the selection of Essar as a partner because of its commitment to the project and its experience in infrastructure development and the successful undertaking of large capital intensive projects.”
Ravi Ruia, Essar Group Vice Chairman said, “This is a win-win transaction for the government of Zimbabwe and Essar. We view the union as a long term partnership with Zimbabwe. We are committed to reviving Zimbabwe’s steel Industry, adding value to both its natural and human resources and improving the infrastructure of the country.”
According to the agreement, the government has ceded 60% of its shares in the NewZim Steel Company. EAHL has also committed to an investment of about US$ 750million which will include relieving the government ZISCO of all its liabilities including paying workers what they are owed by ZISCO.
Essar said it will also retain the 3 500 workforce and also create jobs for a further 3500.