Zimbabwe will begin feasibility studies of stainless steel production in the next two months and agreements to pave the way for this exercise will soon be signed, Mines and Mining Development Minister Winston Chitando has said.
“Negotiations with the investor are ongoing and we expect that by end of June, we will sign the Memorandum of Agreement and this would mark the commencement of the feasibility studies,” the minister told Business Weekly.
“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.”
While Chitando declined to discuss the identity of the investor, Business Weekly understands it is an associate company of Afrochine Smelting, the ferrochrome producer with operations west of Harare.
Afrochine Smelting has expressed interests in setting up a stainless steel plant, with preliminary indications the project could cost as much as $1 billion.
The $1 billion excludes other investments in related sectors earmarked to support the facility.
Key mineral resources
Zimbabwe holds key mineral resources required to produce stainless steel such as nickel, iron and ferrochrome, and this development would leave the country poised at becoming one of Africa’s biggest stainless steel producers.
“There are things that the investor is looking at; securing durable iron ore deposits, which we have in abundance, securing coal deposits as they intend to establish a power station to supply electricity to their plant and guaranteed supplies of nickel,” said senior official familiar with the development. “It is a matter that is being seriously looked into considering that this proposed venture was mooted about two years ago.”
One billion dollar deal
On Monday, President Mnangagwa told journalists at the signing of a $1 billion power and mining deal between Zimbabwe and Chinese steel giant Sinosteel that his government was looking at transforming the economy. “In the same light, Zimbabwe has huge resources in iron ore, chrome and nickel which are necessary for the production of stainless steel,” the president said.
“Zimbabwe is at stage where it wants to transform the economy and Government is exploring the feasibility of stainless steel production, in addition to resuscitation of ZISCO.”
The chief executive of Chamber of Mines Issac Kwesu told Business Weekly in that Zimbabwe would have a competitive advantage given the availability of ferrochrome, iron resources and nickel required for stainless production.
“It is something that is very much possible because we have all the feedstock,” he said.
“The real issue is to produce stainless competitively to compete globally and we need infrastructure upgrades to be a cheap and productive economy,” he said.