GOVERNMENT has granted Chinese stainless steel giant Tsingshan a special grant to iron ore mining rights in an area around Chivhu, Mashonaland East Province, to enable the company to set up a stainless steel manufacturing plant, Mines and Mining Development Minister Winston Chitando said.
The development would require significant increase in key feed stock minerals namely iron ore, nickel and coal. Fortunately, this comes amid an investor stampede, which will make capital available to expand output.
Minister Chitando, speaking during his official opening address at Mine Entra 2018, said the Chinese firm had already begun conducting feasibility studies into the possibility of the stainless steel project. This follows a framework agreement Government signed with Tsingshan in June this year.
The stainless steel plant, Minister Chitando told delegates at the conference, would result in an investment of over $1 billion and would generate annual export revenue in the order of $2 billion annually.
This is expected to drive expedited progress towards President Mnangagwa’s vision 2030 of making Zimbabwe a middle income country. Minister Chitando said the vision “was achievable and would be achieved”.
The mining sector — given that Zimbabwe has all of the 40 top minerals in the world among them gold, platinum, diamonds, nickel, chrome and coal — would play a key and strategic role to the realisation of the vision 2030. Mining currently contributes 12-16 percent to Zimbabwe’s gross domestic product.
“In June 2018, Government signed an agreement with a company called Tsingshan, the largest producer of stainless steel in the world. The whole idea is that they are undertaking a feasibility study to produce stainless steel in Zimbabwe.
“For those familiar with production of stainless steel, the main ingredient is iron ore, which we have plenty of and have given them or Government has awarded them a special grant for iron ore,” the minister said.
He pointed out that other ingredients required in the production of stainless steel were nickel, ferro-chrome and coke, all key inputs which the country had in abundance in various parts of the country.
“The agreement we signed in June is a framework agreement for Government to facilitate Tsingshan to have these resources and produce stainless steel. The thumb suck number I have is that the stainless steel plant on its own will generate revenues of over $2 billion per annum,” the minister said.
Minister Chitando said there would be significant value addition benefits from the establishment of the stainless steel plant given that currently Zimbabwe exports all its ferro-chrome, from Zimasco and ZimAlloys and nickel from Bindura, to markets in Europe and China in semi processed state.
“What is now happening is that we will be value adding that ferro-chrome and nickel to produce stainless steel, so that is the agreement we signed (with Tsingshan). At the moment, the whole programme is fully on course to do the feasibility study (including resource determination),” he said.
Minister Chitando said the project would have further significant positive impact on the mining sector, which Government expects to grow from a $3 billion industry to a $12 billion industry by 2023.
Other growth nodes in the mining sector are set to come from gold, diamonds, platinum, lithium and coal mining.
“The ferro-chrome requirements of feeding that (stainless steel) plant are 500 000 tonnes and if you look at the installed capacity of ferro-chrome in this country right, I think its plus or minus 300 000 tonnes.
“Assuming all the ferro-chrome production in this country will go as feed in there, what it means is we have to double the size of ferro-chrome production,” Minister Chitando said.
In terms of nickel, Minister Chitando said the country will require production equalling 10 times the output Bindura Nickel Corporation, Africa’s only integrated nickel producer, is currently producing.
Tsingshan was set up in 1992 and is mainly engaged in foreign investment, manufacturing, sales, warehousing and import and export. The group mainly produces stainless steel ingots, steel bars, plates, wires and seamless tubes, which are widely applied in petroleum, chemical engineering, machinery, electric power, automobile, shipbuilding, aerospace, food, pharmacy, decoration and other fields.
In 2017, the Group realised an output of stainless crude steel up to 7480 000 tonnes and a sales income of RMB 161 500 000 000.
The group employs more than workers.