What we know about the Dinson Iron and Steel Company (Disco) in Zimbabwe.

Sometimes the biggest life changing projects happen right under our noses while we complain and worry about what is not going right in our country, Zimbabwe. The Dinson Iron & Steel Company in Mvuma is one such project. The project is being built at a breakneck speed and is expected to be completed and be operational by August 2023 according to company reports via Twitter. Work on the project began around February 2022. The project promoters are indicating that this will be the largest carbon steel plant in Africa on their Twitter account. Why is the project important for my company Solarpro Energy Africa? Steel is being used in the manufacturing of lithium battery, solar panel racking and inverter cases and as I mentioned here in the past Africa is better served through manufacturing of solar products where they are needed the most as this will increase adoption and access.

Talks about this project began in 2021 when Tsingshan Holding Group, a Chinese private company active in the stainless steel and nickel industry that began operations 1988 announced that it would invest in the Dinson Iron and Steel plant capable of producing 1,5million tonnes of steel annually per annum.

Tsingshan Holding Group is a Chinese multinational company that is primarily involved in the production of stainless steel, nickel, and other metals. The company has operations in several countries, including China, Indonesia, and the Philippines. Tsingshan plans to use locally sourced iron ore to produce the steel, and the project is expected to create thousands of jobs and boost the country's economy. The company also plans to set up a power plant to support the steel production process. The project is expected to be completed in 2023.

In the first phase the company will produce 600,000 tonnes per annum. In value terms this is USD1.1 billion. Zimbabwe has over 45 billion tonnes of iron ore reserves.

The Chinese company, through its Zimbabwean subsidiary Afrochine, already produces 150,000 tonnes of ferrochrome per annum, which will also be used in the production of steel once the plant is complete this August. Pieces of the steel plant puzzle are falling into place inch by inch as the company’s Tsingshan Colliery is already producing high quality coke which is being exported to South Africa. By the end of December 2022 the Disco project was 48% complete and is now 50% complete this week according to the company. USD500 million has been invested so far out of the USD1,5 billion budgeted for the full project.

As part of the project a 100km 400KV line is also being designed by the ZETDC and is expected to be constructed to service surrounding areas and the steel plant in Public Private Partnership with the company. This week ZETDC announced that design work for the works in 80% complete.

This is 3 times what ZISCO used to produce at its peak. It is not iron and steel only that the company is interested in producing in the Southern African country, they are already producing coke in Hwange, and ferrochrome and also targeting lithium mining as they obtained lithium mining concessions when the concluded the steel plant deal. The project will turn the sleepy town of Mvuma into a vibrant town as it is expected that the company will employ over 6000 people and a further 30,000 in downstream industries.

Disco is expected to save Zimbabwe USD400m in steel imports and according to ZimTrade the country’s export body, potential export markets for Zimbabwe include Zambia, Botswana, Angola, Democratic Republic of Congo (DRC), Malawi, Mozambique, and Namibia. Zambia imported iron and steel worth around US$226 million in 2020, with the majority coming from South Africa (US$113 million), China (US$64 million), Chile (US$27 million), and India (US$3 million) just as an example. In terms of quantities, Zambia has been importing more iron and steel over the years, from around 58 000 tonnes in 2018 to around 81 000 in 2021, according to Zimtrade.

The location of Zimbabwe within the potential market makes the project an exciting one. The parent company of Disco is also expected to refurbish 1000km of railway lines to allow for export of the steel from Mvuma through Beira. With the Southern African economy growing countries like Malawi which imported US$83 million in 2021 from China is also expected to be a signicant market for Disco.

Zimbabwe has a long history of steel production, with the Zimbabwe Iron and Steel Company (ZISCO) being the largest steel manufacturer in the country for many years. It was established in 1942 and had capacity to produce 500,000 tonnes of steel per annum. However, ZISCO has collapsed and attempts to revive it have been failing due to a huge debt overhang and structural issues. There are also several other steel manufacturers in Africa, including South Africa's ArcelorMittal, which is the largest steel producer on the continent. In 2021 ArcelorMittal produced 3.1million tonnes of steel and the company currently employees over 10,000 people. Other major steel manufacturers in Africa include Egypt's Alexandria Steel and Ghana's Ghana Steel.

The Disco project will have a transformative impact on the Zimbabwean economy as it will help reduce steel imports by 90% and support the country's economic development. For a country that is rebuilding its infrastructure a functioning steel industry is crucial as it supports many other industries such as construction, transportation, and manufacturing. The steel plant will create jobs, boost exports and help to develop the local economy.

For the local Mvuma economy and surrounding areas the plant is expected to boost economic activity. Mvuma is located 192 km south of Harare along the Harare - Masvingo highway, approximately 100 km from Masvingo. Population is under 10,000 people but that will soon change the Disco Plant commences operations in 2023.