ESSAR Global, the majority shareholder in Newzim Steel, says it will invest about US$4 billion in Zimbabwe’s steel industry in the next 10 years. Resident director for Africa, the Middle East and Turkey Mr Firdhose Coovadia disclosed this at the Euromoney conference that opened yesterday.
The funds would be spent on rehabilitation of its steel plant in Redcliff, construction of a beneficiation and electricity plant and exploration of iron ore reserves.
“We will invest US$1 billion in a steel plant to achieve annual production of 1,2 million tonnes and US$100 million on ore reserves that have not previously explored and US$3 billion to create a world-class beneficiation plant and a separate power plant,” he said.
Essar Global bought 54 percent of Newzim Steel stake and 80 percent of Buchwa iron ore reserves in a deal worth more than US$750 million, probably one of the biggest investment deals since independence.
The global giant has already applied for a licence to set up a thermal power station in Hwange to produce about 600 megawatts.
The fact that Essar Global, a major multinational with interests in various economic sectors across the globe, invested in Zimbabwe will help build confidence in the country as an investment destination, said a Harare- based economist.
“This should send a massage to other potential investors that Zimbabwe is certainly a destination to look at. With the macro-economic situation now more on the friendly side, this is the time to invest.
“I do think the partners in the inclusive Government would want to see the economy plunging back into pre-2008 levels. It is my view that the (growth) momentum will be maintained,” said the economist.
Government sold its stake to NewZim, formerly Zisco last year, after it became apparent that it had no capacity to revive the firm.