HomeBusinessZim, Chinese firm sign $1bn deal

Zim, Chinese firm sign $1bn deal


Zimbabwe has signed a memorandum of agreement with a Chinese firm for the construction of a $1 billion stainless steel plant in Midlands as government moves to beneficiate its minerals.


Mines and Mining Development minister Winston Chitando said yesterday the signing of the agreement between government and Tsingshan Holdings would pave way for commencement of feasibility studies.

The project is expected to produce two million tonnes of stainless steel annually.

“We have finally signed the Memorandum of Agreement and this has marked the commencement of the feasibility studies,” Chitando said.

“Also take this into the context that the ferrochrome and nickel that we are exporting is used to make stainless steel. So it is something that we can do locally. This deal will see us producing quality steel because we have the minerals so nothing will stop us from achieving that.”

The project is expected to create 3 000 permanent jobs, according to Mines and Mining Development permanent secretary Munesu Munodawafa.

“We expect that the $1 billion will kick off first with the feasibility study to be carried out on July 1 and thereafter there is a roll out plan, depending on the feasibility studies that will take place,” he said.

“This project is being spearheaded by one of Tsingshan subsidiaries Afrochine, which is already doing chrome and ferrochrome production in Zimbabwe. It is one of the big players after just a few years in operation and it is through them that we were able to secure this $ 1 billion investment.”

Munodawafa said government and the Chinese firm have set up a joint management committee comprising of at least two people from each side to start following up on the project and managing it.

“It’s part of the project, we expect that if given power requirements of an iron and steel plant, one of the sub-projects of this investment is also to set up a thermal power plant which will have the capacity of up to 600 megawatts and this is an entirely new project which has nothing to do with Ziscosteel.

Zimbabwe holds key mineral resources required in producing stainless steel such as nickel, iron and ferrochrome. Analysts say the development would leave the country poised of becoming one of Africa’s biggest stainless steel producers.

In his 2018 National Budget, Finance and Economic Development minister Patrick Chinamasa said government would intensify efforts on value addition and beneficiation of primary products to derive more value from mineral and agricultural resources.

“The country is exporting mainly raw commodities, which yields low earnings, prone to international commodity price shocks and creates lower numbers of workers,” Chinamasa said.

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