Iron and steel sector to create 40 000 jobs
THE US$1,5 billion Dinson Iron and Steel Company (Disco) steelworks at Manhize near Mvuma in the Midlands province and the revival of Zisco will create nearly 40 000 new jobs directly and in downstream industries by 2026, it has been learnt.
The latest development in the engineering, iron and steel sector is in line with President Mnangagwa’s vision of creating an upper middle-income economy by 2030, which will be anchored mainly by mining and other critical sectors such as agriculture.
So far, 13 000 people are in the employ of the country’s engineering, iron and steel industry, and the coming in of these two steel giants will see employment in the sector jumping by over 300 percent in the next three years.
The new steel plant near Mvuma being developed by Disco, a subsidiary of China’s largest stainless steel manufacturer Tsingshan Holdings Group Limited, is expected to be commissioned in December.
Under the first phase of the new steelworks, 4 000 people would be employed directly, translating to 24 000 jobs downstream.
The Disco project will be commissioned in phases, with the first one accounting for 600 000 tonnes per annum, before the figure increases to 1,2 million tonnes in the second phase, 2,4 million tonnes in the next phase and five million tonnes in the final phase. Once the largest steel plant north of Limpopo, the Redcliff-based steel plant, Zisco, also in the Midlands, produced one million tonnes per annum, creating 5 000 jobs at its peak in the late 1990s.
The former giant is expected to resume operations in the next three years, with 2 500 people set to be employed directly in the initial stages of resuming operations, while 15 000 jobs across the downstream industry will be created.
The steel giant, in which Government is a major shareholder, ceased operations at the height of hyperinflation in 2008.
However, the revival of Zisco reached another level in August last year, when Kuvimba Mining House (KMH), Zimbabwe’s biggest mining group, signed a management contract with the steel firm.
Furthermore, KMH is presently on the ground, undertaking all the preliminary activities that include planning and carrying out feasibility studies such as the type of steel to be produced when operations resume.
As part of a positive step towards Zisco’s resuscitation, KMH has also engaged Strategen Company of Germany as the lead consultancy to drive the revamping of the steel manufacturer.
The revival of Zisco, in which KMH will inject US$1 million, is divided into two segments — mining and the steel project.
Against this background, Zisco’s mining arm, Buchwa Iron and Steel Company, is set to resume limestone and iron ore mining operations at Ripple Creek and Buchwa in the Midlands province in the first quarter of next year, while steel production would resume in 2026.
Limestone and iron ore are the major raw materials required in steel production.
According to the Engineering, Iron and Steel Association of Zimbabwe (EISAZ) sector strategy (2022-2026), 50 000 jobs would be created across the value chain.
In an interview on Wednesday, EISAZ secretary-general Mr Matthias Ruziwa said the targeted employment figures are on the back of strategic initiatives presently underway to revamp the local engineering, iron and steel industry.
“That vision is anchored in quite a couple of signposts or sub-strategic actions . . . we are really excited by the steel project in Mvuma because our major stumbling block is to do with raw materials from the local market.
“So, given that Dinson will be commissioned this coming December and believe you me, we are going to leapfrog in terms of our employment targets in the sector,” he said.
“Getting over 50 000 jobs by 2026 is very much possible on account that Dinson will have a serious impact on downstream industries once it resumes operations.”
The engineering, iron and steel sector is the backbone of industrialisation.
It provides inputs that are essential for the development of other industries such as construction, mining and manufacturing.
Asked about how the economy has been affected by the absence of a vibrant engineering, iron and steel industry, Mr Ruziwa said: “Zisco, as you may be aware, used to give us over one million tonnes of steel per annum, so in the absence of Zisco, the country hasn’t been able to access export markets and we have experienced serious challenges in terms of raw materials availability.
“The trend has also been that US$1 billion per annum is being spent importing steel and related products.
“From our baseline survey conducted in 2021, I can safely say more than 80 percent of players in the industry are relying on importation of raw materials from South Africa, India and China, and you know what that means in terms of competition and high production costs, among others.”
In a separate interview, Disco project director Mr Wilfred Motsi said his company employed 1 700 people during the construction stage of the steel plant.
“Once we begin operations, in the first phase, we are looking at employing about 4 000 people directly and 24 000 indirectly,” he said.
Zisco board chairperson Engineer Martin Manhuwa said when his organisation resumes production, it would operate with modern technology to improve on operational efficiencies while also enjoying economies of scale.
“At its peak, Zisco employed about 5 000 people and these impacted on factor of times six on other value- added jobs downstream, which basically means if we employ 5 000 directly, 30 000 will be impacted.
“So, we hope to have achieved half of that number in the first three years when the resuscitation proceeds according to plan.”
“However, we should caution that this will be a factor of the technology pathway that we will follow, so it would be informed by technology and the feasibility studies that are currently underway.
“It’s no doubt that it is a huge employer directly and indirectly and besides, it acts as a catalyst to all the industries in the country, especially the manufacturing sector,” he said.