A CHINESE firm constructing a massive steel plant at Manhize near Mvuma has successfully produced pig iron during test runs, as it gears up for the official launch.

Dinson Iron and Steel Company, a unit of the Fortune 500-ranked Tsingshan Holding Group, began the construction of this large facility in 2022, committing an investment of US$1,5 billion.

Wilfred Motsi, projects manager at the firm, said: “We have started production of pig iron. We are carrying out test runs. Pig iron is a raw material used to produce steel billet, which we will start manufacturing this week.

“These steel billets are the ones which will be used to make different steel products. This is the one which we will sell at the market.

“We are looking forward to pour in more investment as we expand the plant up to Phase 4. Right now, we don’t have the exact figure of the investment we will add as we are still working on the modalities,” he added.

Last week, Hwange Colliery Company Limited (HCCL), now HCCL Holdings, announced that it had signed a contract mining deal with Dinson.

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This agreement is part of HCCL's recovery efforts under its reconstruction scheme and allows Dinson to exploit significant HCCL coalfields in north-western Zimbabwe. At the current extraction rate, about five million tonnes of coal will be mined over five years at a site referred to as the "Dinson Pits."

For the Manhize steel operation, this deal presents an opportunity to secure high-quality stockpiles of coking coal ahead of its launch.

“When you are in the business of mining, the norm is to buy excavators, trucks,” acting managing director, William Gambiza told reporters during a tour of the firm’s operations in Hwange.

“But there comes a moment when you realise running the fleet will no longer be giving you any benefit, and you no longer have capacity to meet your targets.

“The alternative is to look for someone with the capacity to do it for you. We have outsourced to a company with capacity to do it on our behalf.

“We realised we unlock value if we restrict ourselves to business planning and processing. In terms of actual (opencast) mining, we are outsourcing to contractors.

“The advantage is that your unit costs (decline) and in terms of capacity you are guaranteed that they will deliver.

“When it comes to underground mining, we do it ourselves because it is more risky,” he added.

Another HCCL executive emphasized the importance of taking a proactive approach to guarantee sufficient shipments to Manhize.

“Dinson, as we have said, is one of our key customers, so the coking coal that we produce from this pit is acquired by Dinson,” Gambiza said.

“This pit is scheduled to produce one million tonnes of coal per annum.”