Mines deputy minister Gift Chimanikire says the decision by the ministry of trade to cede 90% of Buchwa Iron Mining Company (BIMCO) to Essar Global as part of the US$750 million Ziscosteel sale was wrong.

 

He said government would work towards reversing the decision to give the company the full mineral rights.

 

“You do not just give 90% of your resources to a private company. Obviously it has repercussions on the operator. But we are in no hurry. We need to consult the ministry of Industry,” Chimanikire said.

Essar's takeover of Ziscosteel is being handled by a ministerial committee comprising the ministries of mines, finance, economic planning and investment promotion, industry and commerce, and justice and legal affairs.

Under the stalled deal, Essar is to assume Ziscosteel's $240 million foreign debt.

The deal involves the purchasing of Ziscosteel’s refining plant and its iron ore mine claims which are said to have 40 billion tonnes in deposits.

Essar got a special cabinet clearance to secure the 54% stake in Ziscosteel, way above the 49% limit for foreigners as stipulated by the Indigenisation and Empowerment Act.