ARCELORMITTAL’s bid for Ziscosteel now hangs in the balance after the world’s largest steelmaker expressed concern over the country’s indigenisation policies.

The company, through its South Africa subsidiary, is one of the two firms shortlisted by the government to take over a significant part of its interest in the struggling Redcliff-based steel company.

The Zimbabwe government has been working on selling-off its majority shareholding in Zisco in bid to help revive the moribund company.

However, ArcelorMittal SA’s chief executive Nonkululeko Nyembezi Heita recently said the country’s empowerment policies were of “great concern”.

“This is of great concern to any investor. I don’t believe there is any investor who would be interested in going into Zimbabwe if there is a chance of losing a stake in their business,” Nyembezi Heita said.

The Zimbabwe government recently moved to operationalise the country’s empowerment legislation which requires all foreign-owned businesses worth more that US$500 000 to ensure that 51 percent of their equity is owned by indigenous Zimbabweans within five years.

The law, which took effect at the beginning of the month, has largely been slammed by foreign investors with most warning that it risked undermining the country’s economic recovery.

ArcelorMittal and India’s Jindal Steel & Power are two of the companies which were said to be leading the bid to take-over Ziscosteel with Arcelor indicating that it had set aside SAR4 billion for the project.

Ziscosteel, which has been a perennial drain on the fiscus is said to require US$1 billion to upgrade key plant and equipment, reduce a massive debt over-hang as well as meet its working capital needs.