The multimillion-dollar investment by Tsingshan Group — the largest steel manufacturer in the world — in an integrated steel project in Chivhu, Mashonaland East, is likely to be hugely transformative to the local economy in the medium to long term.
From job creation, exports, enhanced foreign currency earnings to massive infrastructure development, the project is likely to have a huge impact on both downstream and upstream industries in the steel value chain.
The project lies on the Manize mountain range and will have a turnover of about US$1,5 billion a year from the processing plant and an iron ore mine.
It is envisaged to produce 1,2 million tonnes of steel per year.
Mines and Mining Development Minister Winston Chitando said the single biggest production unit will be situated on a 3 000-hectare piece of land.
It will have a 1,5km-by-600 metre carbon and steel plant, an iron ore mine and a ferrochrome plant with an annual production of 500 000 tonnes.
“The project entails carbon and steel, not stainless steel, because we currently do not have enough nickel for stainless steel.
“Development of this project should see up to 4 000 to 5 000 people benefit through employment across value chains,” said Minister Chitando at Afrochine complex in Selous recently at the launch of the inter-ministerial committee to spearhead the implementation of the project.
Stakeholder engagements have already started with the launch of the committee.
Afrochine is now the country’s biggest chrome smelter.
Its parent — Tsingshan — produces 25 percent of global steel.
Apart from the physical infrastructure to be developed at Manize, the project will see major projects that cut across transport, housing, energy and water infrastructure to benefit not only the mining giant, but the province as well.
Its scope also entails a 50km railway line to link the site with Mvuma.
Without giving finer details, the group is also planning to construct a dam along Munyati River.
“This project will require a lot of uninterrupted water supplies.
“Tsingshan has already identified a site for dam construction and will need approvals from relevant authorities.
“A project of this magnitude cuts across ministries and value chains, which is why an inter-ministerial committee has been formed to ensure the necessary enablers for the project are in place.
“We are going to need a railway line that links the site with Mvuma, so Ministry of Transport and NRZ (National Railways of Zimbabwe) will be busy with that,” he said.
Value addition, exports and import substitution
The mega project also supports the value addition and beneficiation initiatives, which will boost foreign currency earnings as opposed to exporting raw ferrochrome.
An estimated 700 000 tonnes from the project should be for the export market, while savings of US$500 million will be achieved from import substitution.
“At full production, this project will be a major contributor to the US$12 billion revenue sector. By 2023, it should be up and running.
“There is going to be foreign currency generation and huge savings from this project from exports as well as import substitution,” added Minister Chitando.
Afrochine managing director Mr Benson Xu indicated that management at the company was happy with their investments in Zimbabwe.
“We have even increased our furnaces here (Selous) because of our great vision for Zimbabwe. We are excited to be significant contributors to the US$12 billion revenue sector,” said Mr Benson.
The chrome sector and its contribution to the economy cannot be overlooked.
Zimbabwe is home to the second-largest chrome ore resources with an estimated 900 million tonnes, while global resources are at 7,5 billion tonnes.
Overall, the Manize project is likely to feed into value addition and beneficiation initiatives, which have been identified as key enablers to economic growth.
As such, Government has been pushing for mining companies to beneficiate minerals in order to enhance export earnings and boost job creation.
The implementation of the project is also expected to transform Chivhu into a vibrant town with enhanced infrastructure such as housing.
“I believe they had already planned for a town in Chivhu area for their employees and other developments because what we want to see also is for Chivhu to grow because of those companies coming now,” said Minister of State for Mashonaland East Aplonia Munzverengwi during a recent visit to the site.
The Chinese steel giant has other investments in the country such as those in Selous and Hwange, where an energy park is being developed with four projects, one of which is expected to be officially commissioned by President Mnangagwa in July.
Top executives from the Tsingshan Group are expected to visit the country in July for high-level engagements with the President.
The first programme will be to commission two furnaces in Selous, while the second programme will be in Hwange to commission a 150 000-tonne coke battery plant and groundbreaking for another 150 000-tonne plant.
Thereafter, groundbreaking of the Manize project will follow. Sunday Mail