The Naveen Jindal-controlled Jindal Steel & Power Ltd’s (JSPL’s) attempt to acquire the Zimbabwe Iron & Steel Company (Ziscosteel) has failed. The Zimbabwe government has decided not to sell the ailing company to large corporations such as JSPL and Arcelor Mittal.
The technical team which analysed the bids of interested players has recommended not to accept these proposals as the interests of the bidders “could overwhelm Ziscosteel and work against the wishes and interests of the country”, local newspapers reported today, quoting Zimbabwe’s Industry and Commerce Minister Welshman Ncube.
JSPL and Lakshmi Mittal-owned Arcelor Mittal were among the main suitors for Ziscosteel, which is 89 per cent owned by the government of Zimbabwe.
The technical committee on Zisco was made up of officials from the Ministry of State Enterprises, the Ministry of Industry and Commerce, the Ministry of Finance, as well as the Reserve Bank of Zimbabwe.
“It was indicated that such big entities have a tendency of dictating terms. They can close or pull out of a deal whenever they feel the conditions were not favourable to them,” the reports said, quoting the minister.
The Presidency (of Zimbabwe) indicated that entities like ArcelorMittal and Jindal Steel were too big for the Zisco partnership and could prove costly to the country. The government would now relook the whole exercise and come up with a medium-scale partner within a short period to revive Ziscosteel, he said.
Ziscosteel, the largest steelworks in Zimbabwe, has debt of around $300 million (Rs 1,390 crore) and its plant had stopped operations in 2008 following the global slowdown. Apart from the steelworks, Ziscosteel also owns an iron ore mine in Zimbabwe.
Early this year, the Zimbabwe government had made an announcement to privatise Ziscosteel to revive its fortunes.
JSPL is setting up a big integrated steel facility in Bolivia and has mining interests in Mozambique and Madagascar. A few days ago, JSPL had entered into a mining alliance for three projects with Australian coal firm, Rocklands Richfield.
