Tsingshan may triple output at its Zimbabwe steel plant

Tsingshan Holding Group is considering as much as tripling output at a Zimbabwe steel plant it started in 2024, an expansion that could add to pressure on South Africa’s struggling steel industry as much of its production is exported to that country.

Output of the Manhizhe steel plant, 205 km southeast of the capital Harare may be raised to as much two-million tons from 600 000 t currently, said Benson Xu, chief executive officer of Tsingshan’s Zimbabwean unit.

“First of all we want to diversify the steel products,” he said in an interview last week at the plant. “Then we will also put up the volume” in the near future, he added, saying rail infrastructure would need to be improved.

Of the mill’s current output, 40% is sold locally with the rest exported, most of that to South Africa. Steel is also sold to Malawi and Zambia, he said.

The potential expansion of the plant, which primarily produces steel used in construction, comes as South African steelmakers struggle to compete with imports as they contend with a sluggish economy, erratic rail service and surging power costs.

ArcelorMittal South Africa, South Africa’s biggest steel producer, last year shut a mill producing construction steel, citing competition from imports as well as local competitors using subsidised scrap as their raw material rather than iron-ore.

Tsingshan would also need to build a plant to process metallurgical coal for use in the mill’s furnace. The company also mines iron ore for the plant in Zimbabwe.

“It’s quite massive,” he said of the planned expansion, declining to say how much it would cost.

The company is also in talks with the country’s sovereign wealth fund, Mutapa Investment Fund, to form a rail joint venture.

Zimbabwe’s State-owned steel mill, Ziscosteel, ceased production in 2008.

Tsingshan is also the world’s largest nickel producer and maker of stainless steel. The company is controlled by its founder, Xiang Guangda.