The Zimbabwean Government has handed over an ordinary mining lease whose tenure is open-ended to Dinson Iron and Steel Company (Disco), a Chinese conglomerate that is developing a US$1,5 billion steel firm in Manhize near Mvuma.
The handing over of the mining lease is confirmation that China’s biggest stainless steel producer, Tsingshan Holdings Group Limited through Disco, one of its local subsidiaries, has title deed to control over the 12 270 hectares of land on which the steel plant is being established.
The group’s two other local subsidiaries are Dinson Colliery in Hwange and Afrochine Smelting (Pvt) Limited in Selous, Mashonaland West province.
The project is touted as Africa’s largest integrated steel manufacturing plant.
Speaking during the handover ceremony in Harare yesterday, Mines and Mining Development Minister, Winston Chitando, commended the investor for going ahead with the setting up of the project, which is Africa’s largest integrated steel plant, even if the title deed had not been issued.
“I must recognise Dinson for supporting the Government in terms of its investment programmes but also for having faith in the Government.
“Many companies will say we don’t invest until we get our mining lease. But when Dinson got assurance from His Excellency (President Mnangagwa) that the mining lease will be coming, they did not wait for the title deed.
“They actually proceeded to start investing millions of dollars without having the mining lease in their hands. We would like to acknowledge Dinson and thank them for that faith in the Government of Zimbabwe.
“What we are handing over today is a mining lease which effectively is the title deed for Dinson Iron and Steel ownership of their 12 000ha in that area . . . we look forward to Dinson or the Tsingshan Group continuing to move at the fast pace which they are moving at,” he said.
The ordinary mining lease would see the Government charging Disco an annual inspection fee of US$150 per five hectares.
Minister Chitando said the steel project is a typical example of a mining and comprehensive value addition investment that is almost an ecosystem that dovetails with National Development Strategy 1 (NDS 1) that is hinged on driving the country towards an upper middle-income economy by 2030.
“If you look at the number of minerals that are involved, the value chain from coal up to coke, the value chain of iron ore, limestone, ferrochrome it’s really a typical example of a consolidated value addition programme which is in line with NDS1 and which is also in line with supporting the vision of His
Excellency of a 2030 upper middle-income economy and also our US$12 billion target,” he said.
NDS1 is the Government’s five-year economic blue-print running between 2021 and 2025 driving the country towards an upper middle-income economy society by 2030.
The economic development programme, which will be replaced by NDS 2 is hinged on growing and stabilising the economy, among other fundamentals.
In 2019, the Government also launched a US$12 billion mining economy by the end of this year on the back of the ongoing massive investment and expansion projects in the mining sector.
Prior to the launch of the mining industry roadmap, the sector’s contribution stood at US$2,7 billion in 2018 and the figure has since registered phenomenal growth accounting for US$5,3 billion in 2021.
“More importantly, we look forward to Dinson moving to the next expansion stage after this current phase is done.
“We are certain that you are firming up on the scale and plans of the expansion once this current phase is commissioned towards the end of this year,” he said.
Disco have indicated that their first blast furnace would be on stream by November this year.
When operating at full throttle, the steel plant is expected to produce 1,2 million tonnes annually with the first phase of the investment processing 600 000 tonnes of carbon steel per year for local and export markets.
As a result of the development of the steelworks in Manhize, a new town is sprouting with a number of infrastructural development projects also coming on board.
The Government has also approved a master plan for the development of a new town between Mvuma-Chivhu and Manhize amid growing interest from industrialists, banks, and other service providers to be part of the massive investment.
It is hoped that the new town to be established for about 30 000 residents would be a game changer for Zimbabwe
Speaking at the same occasion, Disco managing director Mr Benson Xu expressed gratitude to the Government saying the handover of the mining lease boosts their confidence in the steel project.
“We are grateful for the continuous support into the project and without commitment from the Government nothing will happen, so we really appreciate the commitment from the Government,” he said.
In the past 12 months, Disco has completed the construction of the foundation of critical infrastructure such as blast furnaces and casting equipment with the investor busy with the installations.
He said construction of the project was a bit delayed by the incessant rains that Zimbabwe experienced in the previous rainy season.
The Meteorological Services Department had predicted that Zimbabwe would receive normal to above-normal rains in the 2022/2023 rainy season.
“Now most of the equipment has come through already so we were just a bit delayed because of the rainy season in terms of logistics and transport but we keep receiving a lot of equipment that’s coming on the site.
“I think from now until the end of this year we are going to be very busy with installation and testing.
“We are hopeful that by the end of this year we could be commissioning the blast furnaces, that’s our target and also the assignment which we promised to the President we must deliver no matter whatever the difficult we have but we need to deliver that target by the end of this year,” he said.
“The critical issue which we are still working on is the transmission line for power supply. My team is already in Zimbabwe and working with the ZETDC (Zimbabwe Electricity Transmission and Distribution Company) for the completion of the line and everything is in good progress at Manhize.
“We are still very confident that by the end of this year we will be able to commission the steel plant.”
The steel plant would be powered by two 175MVA substations and a 330KV transmission line stretching 100 kilometres from Sherwood in Kwekwe.