Disco’s US$1,5 billion steel plant complete

25 Feb, 2024 - 00:02 0 Views
Disco’s US$1,5 billion steel plant complete

The Sunday Mail

Oliver Kazunga

Senior Business Reporter

CONSTRUCTION of the US$1,5 billion steel plant in Manhize near Mvuma is complete, with the project tentatively set for commissioning on June 10 this year.

The plant, which is touted to be Africa’s biggest integrated steelworks, was built by Dinson Iron and Steel Company (Disco), one of the three local subsidiaries of China’s stainless steel producer Tsingshan Holdings Group Limited.

Locally, the group’s other subsidiaries are Afrochine Smelting in Selous, Mashonaland West province; and Dinson Colliery in Hwange, Matabeleland North province.

Speaking on the phone from Manhize on Friday, Disco project director Mr Wilfred Motsi said construction of the steel plant is complete, with a test run of the plant expected to start next month.

“Construction of the steel plant is complete in terms the blast furnace, sinter plant and the raw material complex. What is lagging behind now is power supply from Sherwood in Kwekwe to Manhize. We are going to start with a test run sometime between March and April and depending on the results of the test run, commissioning is tentatively set for the 10th of June if all goes well,” he said.

The commencement of operations under the first phase of the steel plant is a result of the Second Republic’s creation of a favourable investment climate under President Mnangagwa’s mantra “Zimbabwe is open for business”.

The scheduled opening of the project moves Zimbabwe into position as a steel manufacturing giant, expanding the mining industry as all raw materials are mined locally, the iron ore very close to Manhize. Thousands of new jobs are being created at the expanding steelworks.

“During the construction phase, most of the workers were from the construction sector but now we are in the process of employing those guys who will be operating the machines. We have started recruiting for the laboratories, data capturing and technical staff for the sintering plant, blast furnace and other sections of the plant. So far, we have 1 500 workers who are on the ground and by the time we start including construction guys, we are looking at employing 2 500,” he said.

Disco is projected to produce 600 000 tonnes of products in the first phase, rising to 1,2 million tonnes in the second phase.

In the early stages of production, Dinson plans to produce pig iron, followed by steel billets and steel bars before the end of this year.

Production is anticipated to rise to 3,2 million tonnes in the third phase and ultimately five million tonnes annually in the final phase, supplying a wide range of steel products to the Zimbabwean industry with direct employment figures at the steel plant reaching 10 000.

Net revenues are expected to be US$10 million during the first phase, before rising to US$4,25 billion under phase four of production.

The project will earn the country millions of dollars in exports as it becomes a major regional supplier and takes advantage of being located within the African Continental Free Trade Area, which is the world’s largest single market with 1,2 billion people and a gross domestic product of about US$3 trillion.

“So far, the market is excited about the steel project and we are receiving enquiries from across the country, not only those in the engineering, iron and steel sector, but also those with interest in open retail and distribution of steel.

“Regionally, we have enquiries from South Africa, Mozambique, DRC (Democratic Republic of Congo), Zambia and Namibia, among others,” Mr Motsi said.

The project will also go a long way in reducing the cost of raw materials in sectors such as construction that heavily depend on steel in the development of infrastructure.

In a separate interview, development economist Ms Wendy Mpofu said the Disco project is expected to bring several economic advantages to Zimbabwe, including reduced reliance on imports and job creation, as well as stimulating growth and development of downstream industries.

“Presently, Zimbabwe imports quite a significant amount of steel and this is draining foreign currency reserves and given the magnitude of the steelworks in terms of production, the country’s reliance on imported steel and related products would be a thing of the past once Dinson switches on the first blast furnace,” she said.

Following the closure of Zisco, once the largest integrated steelworks north of Limpopo, at the height of the hyperinflation era in 2008, the country has largely been spending millions of dollars importing steel.

At its peak in the late 1990s, Zisco produced over one million tonnes of steel annually, employing more than 5 000 people directly.

“The availability of locally produced steel is expected to stimulate the growth of downstream industries that depend on steel for their products such as manufacturing, engineering and construction.

“Consequently, this can create a ripple effect of economic growth and development across different sectors,” she said.

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