Steel giant injects millions into Zim
ARCELORMITTAL, one of the world’s largest steel producers which imports 70 percent of coke produced in Zimbabwe, is set to build coke oven batteries as part of the beneficiation and value addition process that will create thousands of jobs for the country.
Each coke oven battery is valued at US$15 million and coke batteries are planned for Hwange and Binga areas. A coke battery of such value produces about 10 000 tonnes of coke.
Since last year, the steel giant, which has been lured and enticed by President Mnangagwa’s “Zimbabwe is Open for Business” mantra and the investor-friendly environment, has injected about US$140 million through coke and coal purchases from producers in the Hwange region.
In the process it has directly created at least 700 jobs as companies supplying them employ people to process their orders.
Going forward, the company is expected to double its purchases from Zimbabwe in the next 12 months.
ArcelorMittal South Africa is also in collaborative discussions with steel plants in Zimbabwe so as to land value-added steel products in the country and region.
The procurement of coal and coke from Zimbabwe is part of ArcelorMittal South Africa’s “Africa Raw Materials Sourcing Strategy”, which has seen the company replacing raw materials from overseas with regional sources.
It has since started the first train direct delivery from Hwange to South Africa with plans afoot to revamp the country’s railway network in order to facilitate the smooth movement of goods between the two countries.
Speaking after meeting President Mnangagwa at State House in Harare yesterday, ArcelorMittal South Africa (Ltd) chief executive officer and director, Mr Kobus Verster, said in the last two years, trade with Zimbabwe has flourished.
Mr Verster said the purpose of the visit was to apprise the President on some of the projects that they are working on while appreciating how business is being smoothly run under the Second Republic.
“We understand Zimbabwe is open for business and we have experienced that. Jointly we can both participate and add value for both countries,” he said.
“We have been exporting steel to Zimbabwe for many years, but in the last 18 months we have been importing coal and coke. That is the area where we would like to increase more volumes.”
Mr Verster said depending on the security of coal for coke making, plans are afoot to produce coke locally for their consumption in South Africa.
“We are also going into agreements with people with coal concessions so that we can assist them build coke plants. We will engage with the steel industry and people in Zimbabwe to see what the opportunities are,” he said.
“I think (the President) enjoyed some of the issues we raised and the work that we are already doing. He guided us to work with specific entities in the ministries to advance this.”
Mr Verster said they are substituting imports from Australia and America with Zimbabwean products and it is working well due to proximity issues and the advantage of skilled manpower. “Proximity . . . we are just a river away. Our trucks usually take an average of 18 hours to reach the plant yet a ship
would take about three months. This African-based sourcing strategy is working very well for the company,” he said.
“We have even opened up an exit route for raw materials because Beitbridge was getting congested. We got assistance from Zimra officials, the Ambassador and MMCZ and now we are sending our trucks through Botswana into South Africa.”
Mr Verster said the firm is ready to build coke plants and the money is available.
“We are buying 21 000 tonnes monthly of coke and 5 000 tonnes of coking coal and we are going to be pushing to 30 000t of coking coal and at least 50 000t of coke.
“Every month we are paying about US$10 million for raw materials going to South Africa,” he said.
Mr Verster said the first train delivery from Hwange to South Africa will be commissioned soon.
“On steel beneficiation and value addition, we want to go for collaboration with up-and-coming producers from Zimbabwe so that we may have value addition initiatives like wire drawing and making rods which adds value to the country.
“Last week we were at the Chivhu steel plant and exchanged notes. A delegation (from there) is expected to visit South Africa next week,” said Mr Verster.
ArcelorMittal South Africa also supplies various steel products into Zimbabwe, East Africa, the Southern African region and overseas.
The company also produces creosote, a key timber preservative which is used to treat products like electricity supply poles.
ArcelorMittal is a Luxembourgian multinational steel manufacturing corporation headquartered in Luxembourg City. It was formed in 2006 from the takeover and merger of Arcelor by Indian firm Mittal Steel. The company is the world’s second largest steel producer with an annual crude steel production of 88 million metric tonnes.
It is ranked 197th in the 2022 Fortune Global 500 ranking of the world’s largest corporations, employing 200 000 people indirectly and a market capitalisation of US$25 billion.