On Monday 11 June, Zimbabwe signed a $1 billion outline agreement with China’s unlisted Tsingshan Holding Group for the construction of a steelmaking plant. The project will be carried out by the local subsidiary of Tsingshan, Afrochime, which produces chrome ore.
According to Reuters, Mines Minister Winston Chitando, who signed the agreement with a Tsingshan official, said the plant will produce 2 million tonnes of steel a year for 25 years. This is part of the President Emmerson Mnangagwa led government’s effort to woo foreign investors into the country in order to revive an economy that suffered under Robert Mugabe’s rule.
Zimbabwe imports about $400 million worth of steel annually, thereby depriving the country of expected income. Zimbabwe’s only integrated steel plant, ZISCO, which has been renamed NewZim Steel, ceased production in 2008 at the height of Zimbabwe’s economic meltdown and China’s R&F has said it plans to invest up to $2 billion to revive the operation. The company has about $450 million worth of debt, including $110 million in wage and pension arrears to 2,800 workers. It was reported that Zisco shut down when the issues of politics, factionalism, cronyism and corruption overrode economic considerations. As at Zimbabwe’s independence in February 1980, Zisco was the second largest integrated steel plant in Africa. It employed some 6000 workers in a network of companies.
Earlier in the month, Industry and Commerce minister Mike Bimha commissioned a $12 million steel reinforcement bars plant by Steel Brands. Steel Brands in New Ardbennie Industrial Area produces high quality certified reinforcement steel bars which are currently being imported by the construction industry from South Africa and China.
Since the fall of Mugabe, a lot of investors have shown interest in the opportunities available in Zimbabwe, but many more are still skeptical about investing until after the elections scheduled to hold next month.