By Business Reporter – Wednesday 24th April 2019
HARARE (Mining Index) – GOVERNMENT concluded a US$5 billion mining investment deal granting a Chinese company special mining rights towards the construction of a steel making plant with a projected output of two million tonnes of steel a year for 25 years.
The mega investment deal will also see various mining activities such as the construction of a 600 megawatt power station, a coke production plant, nickel, iron ore, chrome, lithium mining and value addition taking place.
The MoU was signed by Mines and Mining Development Minister, Winston Chitando and Tsingshan Holding Group chairman Chen Shangsong.
The conclusion of the deal follows the initial agreement signed in June 2018 granting Tsingshan, a special grant to iron ore mining rights in Chivhu for the establishment of a stainless steel manufacturing plant.
China is the world’s largest producer and consumer of steel, with approximately 10 times the steelmaking capacity of the United States. In 2017, China cut overcapacity in the steel sector by shutting down 50 million tonnes for domestic environmental and economic reasons. It however produced 831 million metric tons of crude steel while the US produced 116 tonnes in the same year.
Chitando revealed the first phase of investment will see the injection US$2 billion, with the project set to create approximately 30 000 jobs.
“We are looking at employing 20 000 for ferrochrome project and another 10 000 on the other projects, giving us a total of 30 000 jobs,” said Chitando.
The iron ore deposits have been ranked the biggest, unexploited iron ore deposit in the world, estimated to be worth trillions.
Tsingshan’s steel investment is projected to generate annual export revenue of US$2 billion per annum.
The initial project is set to establish a two million tonne steel facility in Mvuma, with one million tonnes being carbon steel while the other one million tonnes being stainless steel.
“The initial MoU targeted the production of coke specific for consumption in the Mvuma area, but the new one is targeting consumption in Mvuma and for export worldwide,” he said.
“In addition to the conversion of coal to coke, the MoU also provides for the research for Tsingshan to produce chemicals from part of the coke to be produced,” he said. ENDS//