Zimbabwe: U.S.$1 Billion Steel Project Kicks Off

One of the world’s largest stainless steel producers, Chinese company Tsingshan Holding Group, has begun work on setting up of the US$1 billion steel plant in the country that will eventually produce two million tonnes of steel annually, Mines minister Winston Chitando told businessdigest.

Zimbabwe signed a US$1 billion deal with Tsingshan for the establishment of a steel plant in Mvuma in June last year.

“The Tsingshan personnel are on site and they have started geological surveys. Government is working closely with them to ensure that the project takes off smoothly. The project will take a while to complete but it’s well on course,” Chitando said.

“A stainless steel project entails four main ingredients: the first being iron ore, the second being ferrochrome, the third being coke and the fourth being nickel. To put in a two million tonne per annum plant requires 550 000 tonnes of ferro-chrome but the installed capacity in Zimbabwe at the moment is only 400 000 tonnes. This means ferro-chrome production has to go up.”

To facilitate the project, government has awarded the company concessions to produce coke in Hwange. The firm will exploit iron ore in Mvuma and ferrochrome in Selous, through its local subsidiary, Afrochine.

“With these three ingredients it will be able to produce carbon steel, which is the first stage of the project. As we develop the nickel industry, we will be able to go to the second phase, which is the stainless steel production,” Chitando said.

“The initial target is to produce one million tonnes per annum by 2022 before growing it to two million by 2026.”

Chitando said the project will have ripple effects in the economy as there will be infrastructural development to enable the movement of ingredients and finished products like carbon steel.

“It will certainly create employment and will be good for import substitution, foreign currency generation and benefit downstream industry,” he said.

Zimbabwe imports about US$400 million worth of steel annually, which explains why import-substitution has become a strategic priority for the country.

Zimbabwe’s only integrated steel plant, Zisco, which has been renamed NewZim Steel, ceased production in 2008 at the height of Zimbabwe’s economic meltdown. The embattled company currently has a US$450 million debt, including US$110 million in wage and pension arrears to 2 800 workers.

At Independence in 1980, Zisco was the second largest integrated steel plant in Africa. It employed 6 000 workers in a network of companies.

Source

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Author: skvaller

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