Riding high on getting management control of Zimbabwe Iron and Steel Company, Ruias-promoted Essar Group today said the Zimbabwe government's move will help it fast track the $390-million revival plan of the ailing steel maker.
"The Zimbabwe government has asked us to assume day-to-day management control of operations in Zisco with immediate effect. This will help us to expedite revival of the plant," an Essar Steel spokesperson said.
The Zimbabwe government and Essar Africa Holdings (EAHL), a privately held company of the Essar Group, had in March signed an agreement for the revival of Zimbabwe Iron and Steel Company (Zisco) by a joint venture company NewZim Steel (NZS). The local government owns 40%, while the rest by EAHL in the JV.
Essar Group had committed $390 million investment in two phases to increase the steel making capacity of the plant to 1.2 million tonne per annum (MTPA) along with a power generation facility.
Earlier this month, the Zimbabwe Cabinet endorsed EAHL's plan and reached an agreement with the Ruias-promoted firm on the immediate implementation of the Zisco transaction.
"Essar will assume day-to-day management control of operations with immediate effect whilst the procedural actions giving rise to the transfer of agreed assets and liabilities is completed in a time bound manner," a press release issued by the Zimbabwe government said.
Essar plans to refurbish the steel making facility of Zisco at an investment of $115 million in the first phase, which will take the production capacity of the plant to 0.5 MTPA. Zisco has stopped production since 2008.
In the second phase, an $275 million investment has been envisaged to raise production capacity to 1.2 MTPA, a 50 MW multi-fuel co-generation power plant and an oxygen plant.
