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Zimbabwe Mines Minister Casts Doubt Over Essar-Zisco Iron Ore Deal

Zimbabwe's mines minister cast doubt on Monday over the urgent implementation of the $750 million Essar-Zimbabwe deal telling a parliamentary committee that Harare will not allow the steel giant to access the nation's 30 billion tonnes of iron ore reserves for free.

The Essar-Zimbabwe agreement stalled after political opponents in the shaky coalition government differed on the true value of the deal to resuscitate the Zimbabwe Iron and Steel Company (Zisco).

The deal was signed between Essar and Zimbabwe's industry and commerce ministry.

In testimony to parliament's industry portfolio committee on the troubled Essar deal, Obert Mpofu said his ministry and stakeholders were not consulted on the deal allowing the steel maker access to iron ore reserves without pay.

Many political players in the country have criticized the deal saying it short-changed the country with deputy Prime Minister Arthur Mutambara recently saying the deal should have been worth at least $2 billion.

Mpofu told VOA afterwards that Cabinet had not discussed the deal prior to signing, adding Industry Minister Welshman Ncube brought the papers to their weekly meeting "as an after thought a few months down the line when they discovered there were other issues to deal with our mineral resources."

Sources say the cabinet, though not happy about the deal, has directed that iron ore resources that were used by the then Zisco, be transferred to Essar Africa Holdings but Mpofu maintains his ministry would not do it for free.

Mpofu told Parliament said investigations by his ministry show that iron ore resources that were used by Zisco at Buchwa and Ripple Creek were adequate to resuscitate Zisco operations. He adds a request for extra resources by Essar are not justified.

The mines minister said it would be improper for the nation to cede its more than 30 billion tonnes of iron ore to Essar without any benefit accruing to the fiscus.