Steel industry backed to transform economy

Collaboration between ZESA and Dinson Iron and Steel Company (Disco) is critical for Zimbabwe to transition to a developed economy, as synergies between energy and steel have a wider positive impact across all sectors of the economy, the Government has said.

Disco, one of the three local subsidiaries of China’s largest stainless steel producer, Tsingshan Holdings Group Limited, is building a US$1,5 billion integrated steel plant in Manhize near Mvuma.

Already, construction of the steel plant has surpassed 85 percent and is targeted for commissioning early next year between January and February.

Energy and Power Development Minister Edgar Moyo toured the steel plant last Friday and pledged that his ministry will facilitate policy-level interventions that will ensure the project succeeds.

“It is important at the policy level to have a practical appreciation of what goes on the ground so that whenever we decide, we have a practical appreciation,” said Minister Moyo.

“The synergies between energy and steel are that they cannot exist without one another.”

Minister Moyo said the philosophy of Government is that the private sector should lead economic development, hence Disco’s project fits into that mantra.

Among its energy initiatives, Disco is constructing a 50MW thermal station at the plant that will be enough to power its first phase of production.

In addition, the company is constructing a 100km electricity transmission line from Sherwood in Kwekwe to the new steel plant.

Other solar and wind energy initiatives are at different stages of implementation. The tour was part of the Energy and Power Development Ministry’s initiative, together with ZESA executives, to familiarise with the plant’s energy requirements and how to make the project a success.

Minister Moyo commended Disco for its power supply development projects, saying they will bring the company’s energy costs down while at the same time providing relief to the utility in terms of power supply.

“The project comes in as a key player in the transformation of the Zimbabwean economy, as steel is an important pillar in the development of the country.

“The ministry works with ZESA, and on tariffs, we shall find common ground and come up with a tariff structure that allows Dinson to be profitable,” he said.

Minister Moyo said ZESA was among the biggest consumers of steel and will leverage the steel plant for its steel requirements.

ZESA Holdings executive chairman Dr Sydney Gata said the country’s transition to a developed economy is now more specifically dependent on the relationship between ZESA and Disco.

He said Zesa Enterprises (ZENT) was the bridge between the steel and power industries.

The two companies signed a memorandum of understanding that made ZENT a marketing partner for steel.

“All our transmission steel, not only in Zimbabwe but also in Southern Africa, will be supplied by Dinson.

“There are millions of tonnes of galvanised steel in the transmission lines, which are coming from China, India and Japan. Therefore, all that will be coming from Zimbabwe,” he said.

Dr Gata said the MoU assigns ZENT as a marketing partner for all steel that is used in the electricity sector.

“Renewable energy equipment, substations and transformers are made from steel, and in the future, the steel will come from Zimbabwe, which will be beneficial to the country,” he said.

Disco chairman Mr Benson Xu implored ZESA to ensure consistent power supply in the next five years to enable the plant to reach its design capacity and operate efficiently.

He also said Government should expedite the upgrading of the rail transport system.

“The railway line to Beira should be refurbished, as power and logistics will be key for the business,” he said.

Disco general manager projects, Mr Wilfred Motsi, said the plant would be an industrial hub and a game-changer for the country, as the energy sector will benefit a lot, together with forward linkages such as the construction industry.

Mr Motsi said in the first phase, Disco is looking to produce 600 000 tonnes of steel and move to about 5 million tonnes by the fourth phase.

“For us to forge forward, we need support from the Government. In the 2024 Budget, we are requesting financial assistance on dam construction and railway lines, which will be used by everyone.

“On tariffs, we are a company that uses 40 percent power on operations and we are saying a reasonable tariff to remain in business will be ideal for the company,” he said.

Mr Motsi also said Government should assist in the resuscitation of the steel industry and the downstream value chain for the benefit of the economy.

Following the collapse of Zisco in the early 2000s, Zimbabwe became a net importer of steel and iron products.

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