Senior Business Reporter
A Chinese investor is looking at exploring for iron deposits in Rushinga District in Mashonaland Central province where preliminary studies have confirmed the presence of a massive resource, an official said.
The investor, which already runs steel smelters in China’s city of Handani where mills are under pressure to cut production as part of measures to curb pollution, has already partnered local investors with plans underway to develop mines and build smelters, project promoter Ambassador Chris Mutsvangwa said.
This is, however, subject to an in-depth exploration to confirm commercial quantities and quality of the resource. There is evidence of the existence of iron deposits in mountain ranges of Mavhuradonha, which stretches into Mozambique.
“Depending on the quality and quantity of the resource, several billions will be invested in the project, which has potential to become Africa’s largest carbon iron plant,” said Ambassador Mutsvangwa.
The project has been in the pipeline in the past 18 months, but was delayed due to coronavirus-induced supply chains disruptions and travel restrictions.
The investor had plans to commence production in 2023.
Ambassador Mutsvangwa said in light of mounting pressure from Chinese authorities forcing big polluters to cut carbon emissions, the investor identified Zimbabwe as its alternative investment destination.
Handani is a heavily polluted steel hub and has an annual steel-making capacity of about 113 million tonnes, according to consultancy Wood Mackenzie.
Ambassador Mutsvangwa said the investor has already held high level meetings with authorities. The iron and steel products would be specifically for the export markets and port authorities in Mozambique have been engaged in view of establishing a bulk cargo handling facility.
A special tasks force within the Ministry of Mines and Mining Development, has been formed to oversee the implementation of the project, said Ambassador Mutsvangwa.
Zimbabwe Iron and Steel Company, is the county’s only integrated steel firm. It stopped operations in 2008 due to lack of capital to recapitalise and poor management. With its furnaces having capacity to produce up to one million tonnes annually, the company was among Zimbabwe’s major foreign currency earners.
Zisco is 91 percent owned by the Government.
The remaining 9 percent is held by Louth Minerals SA (3 percent), Tonexin Investments (2,8 percent), Stewarts and Lloyds (Overseas) (1,76 percent), Franconian Investments (0,81 percent), Amzim Limited (0,75 percent) and Zambia Copper Investment Limited (0,13 percent).
The Government in 2013 entered into an agreement with ESSAR of India to sell 60 percent shareholding but the deal collapsed in 2015.
The Government then signed another agreement with R & F Properties of China to sell its entire shareholding, but again the deal collapsed in December last year.
The Government is working on the National Steel Strategy meant to create a vibrant steel industry given that the country is endowed with high quality product.