Workers at New Zimbabwe Steel Limited, formerly Zimbabwe Iron and Steel Company, said Friday that Indian steel giant Essar Africa Holdings has withheld October salaries following a dispute with the government over the transfer of ore reserves and Harare’s failure to issue share certificates to the firm under their partnership deal.
Workers Council Chairman Partson Mubaiwa said New Zimbabwe Steel management told workers it will not pay salaries until Harare issues the share certificates and confirms Essar's rights to ore reserves estimated at 40 billion metric tonnes.
The Indian steel maker bought a 53 percent controlling stake in Ziscosteel.
The independent daily paper Newsday quoted Finance Minister Tendai Biti as saying the US$750 million Essar deal is being scuttled by government ministers who want to benefit personally from the partnership arrangement. New Zimbabwe Steel holds mineral rights to the disputed ore through a subsidiary, New Zimbabwe Minerals.
But the ore reserves in Mwenezi District, Masvingo Province, are controlled by a former Ziscosteel employee who is alleged to have acquired rights to them illegally.
Mubaiwa said the dispute has caused panic among workers who sent representatives to Harare late this week to urge President Robert Mugabe to resolve the matter.
Deputy Mines Minister Gift Chimanikire said the government intends to maintain its partnership with Essar and has engaged a lawyer to ensure that Essar has access to the ore reserves in Mwenezi that are being withheld by the former Ziscosteel employee.
Chimanikire said the office Attorney General Johannes Tomana complicated matters by ordering his ministry to hand over the Menezi iron claim to the former Ziscosteel employee, "but we have since taken the matter to the courts,"