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Steel company spreads the pain from Zimbabwe to Minnesota

(GIN) — From Minnesota to Zimbabwe, workers across two continents are challenging an industrial conglomerate that has wrecked havoc with a trail of failed mining operations around the world. In the United States, the Essar Group Ltd, has a mixed legacy, with bankruptcy in West Virginia, a cash crisis threatening pension payments in Minnesota and in Sault Ste. Marie, Ontario, outstanding debts of $530 million and flooding, property damage and other environmental hazards in Kentucky.

United Steel Worker President Mike Da Prat said of recent negotiations with Essar: ¡°They have a legal firm that has piles of lawyers and we’re dealing with them all the time¡¦ We are now fighting over language that has existed for decades.¡±

Meanwhile, in Zimbabwe, workers have been living on half-salaries for the past 36 months while the government negotiates the sale of the debt-ridden Zimbabwe Iron and Steel Company to Essar. In its initial effort to off-load ZISCO, the government ¡°accidentally¡± threw in the holdings of the Buchwa Iron Ore Mining Company, worth several billion dollars, although the selling price of ZISCO was only $750 million. Essar is claiming the unexpected prize plus lengthy tax exemptions ever since.

Established in 1946, ZISCO was briefly the largest steelworks in independent Africa, producing a million metric tons of steel each year. Now, with the ZISCO deal up in the air, half-built workers’ housing remains, giving the region an empty and abandoned look. ¡°There is a high rate of stress; workers suffer from high blood pressure and strokes. The situation has been going on for too long,¡± said Misheck Mashedze, a ZISCO steel employee for the past 12 years.

“So many promises have been made, but nothing has been fulfilled, and in the meantime, we are suffering,” said Thomas Ngulube, who worked at ZISCO steel for 24 years. An artisan blacksmith by trade, Ngulube said most workers left the steel plant at midday to “look for food and water,” although officially their shift ends at 4 p.m. “It’s been very, very hard,” said Benedict Moyo, chair of the ZISCO Joint Workers Union. “We’ve got families to look after. There is nothing to sustain the children. It’s been hell.”

The Essar Group, based in Mumbai, India, has investments in minerals, energy, telecom, shipping and business outsourcing, although it frequently pleads poverty. If successful, the purchase of ZISCO would comprise 70 per cent of all foreign direct investment in Zimbabwe over three years.

The Essar group is currently consolidating all its businesses in India and worldwide under a Cayman Islands based global holding company, Essar Global.

 

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