Essar Group said on Wednesday that it has completed the acquisition of Zimbabwe Iron and Steel Company (ZISCO) with a commitment of $750 million (over Rs 3,300 crore) and would take over all liabilities of the company and the Zimbabwe government.
“We are committed to reviving Zimbabwe’s steel industry, adding value to both its natural and human resources and also improving the infrastructure of the country so as to make a significant contribution to the national economy,” said Ravi Ruia, vice-chairman, Essar Group.
As per the agreement, ZISCO will be divided into two new entities — NewZim Steel Private Limited and NewZim Minerals Private Limited. Essar Africa Holdings, the African arm of Essar Group, will own 60% in the steel joint-venture and 80% in the mining company, it said in a statement, adding that rest of the stake will be held by the government of Zimbabwe.
As per the plan, NewZim Steel —the new company for steel production, will revive and expand ZISCO’ s capacity in two phases.
Of this, $115 million will be invested in first phase for achieving production of 0.5 million tonnes per annum (MTPA) capacity in 12 to 18 months, while in the second phase it will be expanded to 1.2 MTPA capacity, including a power plant of 50 MW.