Zimbabwe: Zim set to become a major steel producer
A third major steel plant is now planned for Zimbabwe as the country progresses rapidly as a major steel producer in Africa with local company Steelmakers preparing to start building a steel plant in Masvingo capable of melting 200,000 tonnes per year.
The investment, which will be spread over more than two years, will allow steelmakers to initially produce 60,000 tonnes of steel by the middle of next year as part of the first phase before a further expansion that will bring the production at 200,000 tons per year.
Steelmakers estimate that the first phase will require an investment of US $ 21.5 million, with total capital expenditure expected to exceed US $ 120 million.
The new plants will be joined by two large Chinese investments already underway in Zimbabwean steel and the country now appears to be a major producer and exporter of steel products.
The three companies are expanding or opening iron and coal mines to obtain their raw materials, and the new industry will create thousands of quality skilled jobs and serve as the basis for other major heavy industries.
The company plans to set up a rolling plant in the industrial area of Masvingo where the SIMBI subsidiary of steelmakers produces spongy iron.
The next step is to use this iron sponge as the raw material. SIMBI, which stands for Sponge Iron Mining and Beneficiation Industries, will add value to steel production.
Currently, SIMBI’s sponge iron is shipped to the Steelmakers plant in Redcliffe for further processing into steel with an annual output of 36,000 tonnes.
The steelmakers’ venture to turn SIMBI into a steel production plant dovetails with government plans to grow the economy by curbing imports and adding value to local products to earn more hard currency earnings.
According to Steelmakers Chief Financial Officer and Secretary, Mr. Louis Karovangoma, the planned expansion of SIMBI by his company will bring the company’s total number of employees to over 2,000 in Zimbabwe.
Steelmakers currently employ around 750 people.
Speaking during a visit to the SIMBI factory by Deputy Minister of Industry and Trade Raji Modi last week, Karovangoma said work on the first phase of the expansion is expected to start any time from now.
“We will soon start to build a steel rolling plant here at SIMBI so that we produce steel by further processing the spongy iron that we were producing which was as an intermediate product.
“The machines and equipment for the new factory are on their way to the country and some of the machines have already arrived, so work on the first phase will begin soon.”
Steel workers want the government to help the company invest in steel production by banning the import of steel products.
“The first phase will be completed by the middle of next year and we expect our new plant to produce 60,000 tonnes of steel per year. It will cost us about $ 21.5 million.
“Further expansion in the third phase will see production increase to 200,000 tonnes per year, but we need the government’s help to ban the import of steel products,” he said. .
Steelmakers also hoped the government would ban scrap exports as well, saying their company had a very big appetite for scrap metal.
In addition to imports, steelmakers faced water problems at their SIMBI plant in Masvingo, while recurring power outages crippled operations.
Deputy Minister Modi pledged government support to ban exports of scrap metal and imports of steel products.
He said the government would continue to create an enabling environment to attract more investment and grow the economy to make Zimbabwe an upper middle income economy by 2030.
The steelmakers also wanted additional land to expand the SIMBI plant to produce steel.
Masvingo’s Minister of State for Provincial Affairs and Devolution Ezra Chadzamira noted that SIMBI’s planned expansion will be a major contribution to Masvingo’s quest to increase its gross domestic product in line with Vision 2030.
He added that the government will continue to deal with the problems faced by investors such as SIMBI which create jobs and stimulate the economy.
The minister said SIMBI’s expansion program will see the company produce 20 megawatts of electricity from its plant. SIMBI will use the electricity generated for its own operations and inject the surplus into the national grid.
SIMBI resumed operations this year after closing shop in the middle of last year under the weight of suffocating power cuts and recurring water shortages.
Besides a sponge manufacturing plant in Masvingo, SIMBI also owns a coal mine in Chiredzi and an iron ore mine in the Glenlivet area, about 25 km east of the town of Masvingo.