Zim ready to roll

2011-02-26 13:15

Afripalm chairperson Lazarus Zim is confident his new company will be able to start selling steel this year.

Zim, an ally of President Jacob Zuma and recently appointed chairperson of Telkom, announced this week he was planning to establish a multibillion-rand steel manufacturer with an Indian state-owned company over the next five years.

“But we don’t want to wait too long before we start operating, and are already establishing a distribution and logistical network.

“The network will enable us to fast-track the sale of steel products in South Africa under Afripalm’s name,” Zim said in an interview with City Press this week.

He said steel products would probably be imported until steelworks had been constructed.

The Mail & Guardian reported on Friday that Zuma’s son, Duduzane, was likely to benefit from the deal through his indirect shareholding in Afripalm Horizons.

Afripalm Horizons, a subsidiary of Afripalm Resources, signed a memorandum of understanding with Indian parastatal, the Steel Authority of India Ltd (Sail), to build steelworks of approximately R21 billion.

Zim said the financing for the plant would come from South Africa and abroad.

“There is sufficient appetite from the local markets and lots of interest abroad in the project, and financing should not be a problem at all.”

The plan was to construct a plant that would manufacture between 3?000 and 5?000 tons of steel per year in South Africa.

Zim said he’d been planning for years to establish a steel manufacturer.

“I actually left Kumba to realise my vision. Any person who knows me or has done their research would know I made my steel plans clear long ago.

“Part of the vision is to grow the economy, create jobs and lure investors to South Africa.”

The big question that remained was where Afripalm would find iron ore to produce the steel.

South Africa’s total iron ore production per year was about 53?million tons, of which about 38?million were exported yearly.

The rest was used mainly by ArcelorMittal South Africa (Amsa) to produce steel locally.

What complicated matters further was that the bulk of South Africa’s iron ore was mined by Kumba.

Afripalm would have to compete for this limited offer of iron ore.

Afripalm might find that the government backed its project – the Department of Trade and Industry announced a task team to investigate ways of lowering the price of steel.

The feeling was that Amsa was operating like a monopoly.

Questions were being asked about Zim’s political connections and his relationships with key roleplayers in government.
Afripalm Horizons’ board included Gupta brother Tony and Duduzane Zuma.

Zim claimed it “means nothing that I know this or that person. I’ve been a businessman in South Africa for 25 years and have a track record that anyone can check. I find allegations and claims made against me in the media about how I achieved my success strange and condescending.”

Kumba is currently involved in litigation against Imperial Crown Trading (ICT), a shelf company partly owned by an associate of the Gupta family, Jagdish Parekh.

This after ICT was awarded 21% rights to Kumba’s Sishen iron ore mine. Amsa, which previously owned the rights, neglected to renew them.

ICT was negotiating to sell its rights back to Amsa, but could now decide to do business with Afripalm.

Zim’s latest plans would worry Amsa because the Afriplam/Sail consortium would create direct competition for their business.

Zim said the ICT controversy started long after he left Kumba.

“I recused myself every time that ICT was discussed, precisely because I knew some of the people.”

Zim said he conducted business to be successful and had a healthy respect for all the players.

“I just want to be treated similarly.”

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