In its financials posted last week, R&F reported $3 billion revenue in the first six months of the year, and has made recent multimillion-dollar property acquisitions in London and Australia, to add to the already vast portfolio it holds across the world.
With such an established name in real estate, owning properties managed by top brands such as Hyatt Hotels, acquiring and running a rusty old steel plant in Zimbabwe seems rather out of step.
Even as China tightens controls on how its companies invest abroad, R&F is branching out, outside its core business, and Zimbabwe may be one of its first experiments.
The only other mention of R&F’s involvement in metals is a plan by the company, through its Hong Kong investment arm, to invest in a chrome mine in Angola.
The company was failing to get money out of China to invest abroad, Zhang Li was quoted as saying.
“We applied for $1 billion worth of overseas investment quota to the state foreign exchange authority more than two months ago, but have not yet received approval,” Zhang told the South China Morning Post back in March.
There is no telling whether the company has now since been given the approvals to make the Zimbabwe government’s mega deal hopes a reality.
Even more uncertain is what exactly it is that the Chinese company would be buying; the steel mill alone, or access to Zisco’s iron ore deposits?
On the surface, it is hard to see what R&F would have found attractive about the aged plant.
By Bimha’s own admission this week, Zisco is now obsolete.
“Much of what is there at Zisco won’t be used and their engineers have proved that probably it is about 15 to 20 percent of what is there that they will be able to use. Much of it is no longer in a state to be used,” Bimha said.
R&F would have to build an entirely new plant.
The previous investor, Essar Africa, had originally planned to spend $750 million on a one-million tonne plant.
The company later announced it would instead build a 500 000 tonne steel plant for $650 million, and over two years.
In comparison, Bimha this week said the proposed new deal would see a million tonnes produced “in the next 18 months” for at least $1 billion initially.
The timing is also curious.
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