Zimbabwe’s $1.5 Billion Steel Plant Roars to Life

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Zimbabwe’s got itself a brand new iron and steel manufacturing plant, courtesy of the Chinese. This U.S. $1.5 billion Chinese-built plant’s blast furnace recently came online and is already producing pig iron, a crucial ingredient for making steel.

The team over at Dinson Iron and Steel Company (Disco), the Zimbabwean subsidiary of Chinese steel giant Tsingshan Holding Group, announced the production of their very first batch of pig iron on June 13. The Mvuma steel plant, situated about 120 miles south of Zimbabwe’s capital of Harare, is slated to be Africa’s largest integrated steelworks. According to a report in the South China Morning Post, it will also be one of Africa’s leading iron and steel producers.

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The Chinese firm plans to take things up a notch next month. That’s when the new steel manufacturing plant will start producing billets, the precursor to making steel. There are also plans to begin creating steel products like pipes, bolts, nuts, and even smaller slags, rolled tubes, fences, shafts, wires, and bars. 

Africa has resources for steel manufacturing and more.

As part of the first production phase, the new plant recently set a target to make 600,000 tons of steel annually. Later, after the final phase, that production target grows to more than 5 million tons. The plant will also create jobs for the people of Zimbabwe. In the first phase alone, the new steel manufacturing facility hopes to employ around 2,000 people. This figure would double in the second phase. 

According to some experts, the steel plant could be a game-changer for Zimbabwe. The country has wanted to revive its iron and steel industry for a while now, especially after its largest steel plant shut down during the reign of ex-president Robert Mugabe. 

In the coming years, the plant hopes to make use of Zimbabwe’s ample deposits of iron ore, chrome, coal, and more to produce iron and steel products that will strengthen the country’s value chain. Government officials recently stated that companies will mine and process these raw materials locally, with reserves projected to last for a whopping 100 years.

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As a nation, Zimbabwe remains blessed with a wealth of natural resources like precious metals, nickel, ferroalloys and coking coal. According to analysts from inside and outside the country, these resources have the potential to help alleviate the country’s economic crisis.

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The Engineering, Iron, and Steel Association of Zimbabwe (EISAZ) has set its sights on raking in a staggering $6 billion from exports each year. Clearly, they’re counting on this $1.5 billion steel plant in Manhize to help them achieve this ambitious goal. As part of their sector strategy, EISAZ plans to boost operational capacity, improve production efficiency, and create more job opportunities in preparation for the opening of the new plant.

Back in 2008, when Ziscosteel shut down, Zimbabwe found itself forking over more than $1 billion a year on steel imports. Zisco shut down temporarily due to corruption allegations and mismanagement, though there are plans to revive the facility. However, with the new steel manufacturing facility, the country hopes to reduce its import dependence significantly, thus keeping more of that money within its borders.

For over two decades, the U.S. and some European countries imposed sanctions on Zimbabwe. In March this year, the U.S., while terminating a Zimbabwe sanctions program, reimposed curbs on eleven individuals and three entities. This included the country’s president, Emmerson Mnangagwa, accused of human rights abuses, among other things. Chinese entities have capitalized on the situation by funding various projects in Zimbabwe, including dams, airports and a new parliament building.

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Zimbabwe is also rich in lithium, a critical raw material for electric vehicle batteries. As a result, Chinese companies such as Zhejiang Huayou Cobalt and Sinomine Resource Group invested millions of dollars in acquiring lithium mines and over U.S.$1 billion in constructing processing plants.

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The U.S. is keen on accessing Africa’s resources. During a recent visit to South Africa, U.S. Deputy Treasury Secretary Wally Adeyemo made it clear that the U.S. hopes to secure metals essential for the global energy transition. Adeyemo also emphasized the importance of supporting the growth of South Africa’s mining industry and expressed concerns about infrastructure development primarily benefiting foreign interests.

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The U.S. has strategically invested in African mining operations to challenge China’s dominance in the supply of critical minerals, especially in the production of lithium-ion batteries. These investments also include rare-earth operations and infrastructure development. With its substantial reserves of minerals crucial for battery production, South Africa holds a vital position in the global supply chain.

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