George Maponga in Masvingo
A third major steelworks is now scheduled for Zimbabwe as the country moves rapidly forward as a major steel producer in Africa with local firm Steelmakers set to start building a steel mill in Masvingo capable of smelting 200 000 tonnes a year.
The investment, to be spread over more than two years will see Steelmakers initially producing 60 000 tonnes of steel by the middle of next year under the first phase before further expansion that will push output to 200 000 tonnes a year.
Steelmakers estimates that the first phase will take US$21,5 million in investment with the total investment outlay expected to top US$120 million.
The new mills will be joined by two large Chinese investments already in progress into Zimbabwean steel and the country now looks like being a major producer and exporter of steel products.
All three companies are expanding or opening iron and coal mines to get their raw materials, and the new industry will create thousands of quality skilled jobs as well as provide the base for other major heavy industries.
The firm plans to set up a rolling mill plant in the Masvingo industrial area where Steelmakers’ subsidiary SIMBI has been producing sponge iron.
The next stage is to use that sponge iron as a raw material. SIMBI, which is an acronym for Sponge Iron Mining and Beneficiation Industries, will add value to produce steel.
Currently, sponge iron from SIMBI is shipped to Steelmakers’ plant in Redcliffe for further processing into steel with an annual output of 36 000 tonnes.
The venture by Steelmakers to upgrade SIMBI into a steel-producing plant dovetails with Government’s plans to grow the economy by stemming imports and value-adding local products to rake in more hard currency receipts.
According to Steelmakers head of finance and company secretary Mr Louis Karovangoma, the planned expansion of SIMBI by his firm will increase the company’s total employees to over 2 000 in Zimbabwe.
Steelmakers currently employ around 750.
Speaking during a tour of the SIMBI plant by Deputy Minister of Industry and Commerce Raji Modi last week, Mr Karovangoma said work on the first phase of the expansion is set to start anytime from now.
“We will soon start building a steel rolling plant here at SIMBI so that we produce steel by further processing the sponge iron that we were producing and was like an intermediary product.
“The machinery and equipment for the new plant is on its way into the country and some of the machinery has already landed so work on the first phase will start soon.”
Steelmakers wants Government to help the firm’s investment in steel production by banning importation of steel products.
“The first phase will be complete by mid next year and we hope our new plant will be producing 60 000 tonnes of steel annually. This will cost us around US$21,5 million.
“Further expansion into the third phase will see production shooting up to 200 000 tonnes annually, but we need Government’s help to ban importation of steel products,” he said.
Steelmakers also hoped Government will also outlaw exports of scrap metal saying his company had very high appetite for scrap metal.
Besides imports, Steelmakers faced water problems at its SIMBI plant in Masvingo while recurrent power outages hamstrung operations.
Deputy Minister Modi pledged Government support in banning scrap metal exports and imports of steel products.
He said 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.
Steelmakers also wanted additional land to expand the SIMBI plant to produce steel.
Minister of State for Masvingo Provincial Affairs and Devolution Ezra Chadzamira noted that SIMBI’s planned expansion will be a major contribution for Masvingo’s quest to grow its gross domestic product in line with Vision 2030.
He added that Government will continue attending to problems faced by investors such as SIMBI that create jobs and stimulate the economy.
The Minister said the expansion programme by SIMBI will see the firm producing 20 megawatts of electricity from its plant. SIMBI will use the power generated for its own operations and feed surplus into the national grid.
SIMBI resumed operations this year having closed shop mid-last year under the weight of choking power cuts and recurrent water shortages.
Besides a sponge iron making plant in Masvingo, SIMBI also owns a coal mine in Chiredzi and iron ore mine in the Glenlivet area about 25km east of Masvingo City.