Disco Turns on the Heat at Mvuma Steel Plant

On 12 June 2024, the day has finally arrived for the Tsingshan to turn on the fire at its blast furnace at Mvuma steel plant in Zimbabwe. The steel plant necessitated an #FDI of USD 1.5 billion and will process iron ore into pig iron, which is an intermediary product used to manufacture a multitude of iron and steel products.

Initially, the Mvuma plant will output 600,000 tonnes of steel annually, but ultimately, the production will ramp up to five million tonnes. When operating at full capacity, the Mvuma steel plant could propel Zimbabwe back in the league of top steel makers in Africa, a nostalgic throwback to the good old days of Zisco.

Disco Steel Employees Pose at the Blast Furnace Firing Up Ceremony
Disco Steel Employees Pose at the Blast Furnace Firing Up Ceremony

The plant expects to create 3,000 jobs and the employee count is expected to double when the plant reaches cruise speed. Actually, at the firing up ceremony, the company spokesperson from Dinson Iron and Steel Company (DISCO), a subsidiary of Tsingshan, highlighted that the operationalization of the Mvuma plant marks a ‘monumental milestone’ for Zimbabwe.

In sync with DISCO, the Chinese embassy hailed the start of operations as a ‘significant step for Zimbabwe’s industrialization and modernisation.’ Indeed, local beneficiation or local value addition (#LVA) is embedded in the AU #Agenda2063 to create ‘The Africa We Want’ and is fully embraced by Zimbabwe.

“It is a shot in the arm and it’s a dream come true for the economy of Zimbabwe.”

Zimbabwe Institute of Foundries Dosman Mangisi

From the pig iron, the Mvuma plant will make steel balls and billets. Eventually, bolts, nuts, pipes, wires, bars, fences and other steel end products will be manufactured.

According to the data from Trading Economics, Zimbabwe imports nearly USD 300 million worth of iron and steel products annually, while neighboring South Africa imported for some USD 1.5 billion in 2023. Therefore, the iron and steel products could easily be sold to other African countries thanks to the #AfCFTA.

In the future, the plant will be able process the ferrochrome ores to extract not only iron, but also chrome. Other minerals such as nickel and lithium are already on the investment radar of Tsingshan.

It is worth noting that the Mvuma plan comes after the successful implementation of another ferrochrome smelting plant in Selous, owned by another subsidiary of Tsingshan under the name of Afrochine Smelting Corporation.

Zimbabwean President Emmerson Mnangagwa Visits Disco Steel
Zimbabwean President Emmerson Mnangagwa Visits DISCO Steel

Tsingshan has also invested in coal mining and processing in Hwange. The coal will come from Dinson Colliery and will be processed into coke to be used as fuel in the iron smelting process. Thus, the plan of Tsingshan is to gradually build up the whole value chain for local steel production.

In addition, Tsingshan is investing into the construction and refurbishment of a 1,000-km regional railway to link landlocked Zimbabwe to a seaport in the Indian Ocean. The contemplated railway line will connect Gweru to Mvuma, traverse the border with Mozambique around Mutara, before proceeding towards the Beira seaport.

In a bid to secure access to #CriticalMinerals, in addition to Tsingshan, several other Chinese firms such as Zhejiang Huayou, Yahua, Prospect Lithium, Chengxin Lithium have poured billions into Zimbabwe. Moreover, Shanghai Construction Group (SCG) has built a brand-new parliament building as ‘a gift to the people of Zimbabwe.’