President Mnangagwa recently toured the Manhize Steel Plant, a bustling investment near Mvuma that is the face of steel manufacturing revival in Zimbabwe; and the lofty position the country will attain as Africa's giant.
The Manhize Steel Plant is owned by Chinese company Tsingshan Holding's local subsidiary, DINSON Iron and Steel. The steel plant has just begun production of pig iron and will in the course of the year manufacture steel billets and bars, all necessary for the steel industry which supports various sectors of the economy such as construction, agriculture, mining and so on.
Dinson's Manhize plant will be the biggest in Africa at its peak, according to its projected phases; and this fact bears quite some symbolism, as China helps Zimbabwe to rise from the ashes and become a shining example.
The country's own steel manufacturing had been battered because of the collapse of a State entity, Ziscosteel; and massive de-industrialisation that has taken place in the past two decades, mostly due to sanctions imposed on Zimbabwe by Western countries. Zisco was among entities initially put under the embargo.
While addressing stakeholders during the Manhize Steel Plant, the President underlined the importance of Chinese investments in the southern African nation.
He said: "I applaud companies from the People's Republic of China for the continued investments in our economy. This investment through Dinson Iron and Steel Company signifies more than just financial support; it represents a shared vision for a brighter future between Zimbabwe and China."
This article unpacks the significance of Chinese investments in Zimbabwe, and the benefits of greater cooperation between the two countries.
In particular, there are five key attributes of Chinese investments that underline the importance of Chinese foreign direct investment as a function of the comprehensive strategic partnership between the two sides.
From size and speed, to spreading tentacles in Africa
The first key attribute of Chinese investments in Zimbabwe, which Manhize steel project signifies is size.
China is one of Zimbabwe's major source of Foreign Direct Investment, and it is no surprise that the biggest projects that the country has set up have come from China to the Manhize steel project is worth US$1.5 billion.
What is important to note is that it is at the apex of a value chain comprising of production of ferrochrome and coking coal, which means that Dinson is the only company with such a well-knit business concept, worth close to US$3 billion.
Dinson sister companies, Afrochine (ferrochrome) and Dinson Colliery (coking coal) have been the major producers and exporters of their respective products in Zimbabwe.
The Dinson group also owns Gwanda Lithium as it pivots to new energy materials as part of its investment portfolio, which may include other minerals such as copper.
Size matters. The Tsingshan group, the largest steelmaker and a Fortune 500 company, is showing the extent of Chinese investments in the country.
There are a number of investments that are also big in size and scale.
These include two major mining projects in the lithium sector through Sinomine Bikita Lithium, and Zhejiang Huayou Cobalt's Prospect Lithium Zimbabwe which have opened over the past two years.
The projects were worth close to US$2 billion combined in investments.
The biggest future and prospective investments in Zimbabwe will likely to be Chinese.
These include a battery manufacturing plant in Mapinga, Mashonaland West; as well as the US$1 billion floating solar farm in Kariba.
The second key attribute of Chinese investments in Zimbabwe is speed.
Many projects done by Chinese companies have been completed in record time, as they have breezed through construction to begin operations quickly and efficiently.
Rapid progress seen on Chinese projects has been seen by many locals as a thing of marvel.
It is China speed. Projects such as Prospect Lithium Zimbabwe's Arcadia lithium plant, which was constructed in under one year, when ordinarily it would take at least 18 months, have attested to the sense of urgency and purpose as well as unmatched work ethic of the Chinese.
The third attribute is that Chinese investments are impactful.
The impact of Chinese investments has been huge. Zimbabwe has over 100 large and medium scale companies involved in various significant economic endeavours.
China has also become an employer across various sectors. Apart from providing jobs and steering the economy through revenue streams to the fiscus, Chinese investments have come with social impact through corporate social responsibility assisting communities with education, health and other social needs.
Sinomine Bikita Minerals has in the past year drilled nearly 40 boreholes in Masvingo Province, as well as upgrading roads. The company will also build a bridge in Manicaland.
Bikita Minerals has also brought electricity to local businesses and homesteads, which are benefiting from its investment in power infrastructure valued at millions, something similar to what Dinson Iron and Steel has also done through a 90 kilometre 400kva power line from Sherwood in Kwekwe to the plant.
Bikita Minerals has a football team that won promotion into Zimbabwe's top flight, the Premier Soccer League, underlining the diversity of its impact portfolio, as football is not just a social force but also an employer in itself.
Chinese companies have also had impact on activities that have enhanced local value chains, becoming a key cog in running Zimbabwe's economy. Add to this, the transfer of skills and technologies that are benefiting local people.
Fourth, Chinese companies are transformative. Chinese companies are assisting Zimbabwe modernise its economy and pushing industrialisation, with Manhize steel being the metaphor for the industrialisation drive as steel is at the centre of development.
Historically, steel is a key driver of industrialisation and a Chinese company is at the centre of it all.
Dinson Iron and Steel managing director, Mr Benson Xui -- captured it succinctly when he described the transformation power of the company's investment, relating that: "I saw mountains of iron ore and saw an opportunity for us to achieve the steel project in Zimbabwe and for Zimbabwe." (This was corroborated by President Mnangagwa stating that, "Over the years, the full potential of our iron ore resources and value chains have remained largely untapped.
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"However, under the Second Republic, the milestones we are realising through exceptional teamwork, focus and determination from both public and private sector have seen the establishment of this national strategic project."
He also said it was pleasing that Zimbabwe's iron ore will be fully exploited, value added and beneficiated locally so as to realise maximum benefits from local natural resources, while also capitalising on the value chains including processing, manufacturing and the supply of high-value finished steel goods and products.)
Value addition is key to economic transformation and this is being driven by Tsingshan investments in Zimbabwe, which has lots of natural resources and a yet to be realised value of unmined assets, added to vast human resources, a perfect climate and a huge repository of human capital.
In this process, there is massive development of infrastructure and support services, which are set to impact on the whole of southern Africa, particularly in the south and south east where a value addition park will be established and attracting interest globally.
Lastly, Chinese investments in Africa and in Zimbabwe particularly are stimulating and diffusional. Zimbabwe is thus positioned to become a nodal country, placing it firmly at the centre of the region, and becoming the gateway to Africa for investors attracted to opportunities linked to the exploitation and utilisation of natural resources.
Zimbabwe and Africa are rising, and this fits neatly into the global economic matrices espoused in concepts such as China's Belt and Road Initiative and Global Development Initiative.
