Zambia adds steel to manufacturing base
Friday, 03 December 2010 16:46
Zambia has, over the years, made gigantic strides in its ambitious diversification programme aimed at weaning the country from its economic mainstay – copper.
One of the bright stars in the country’s economic sky is the Universal Mining and Chemicals Industries Limited that has set up a steel plant in the small industrial town of Kafue, the first of its kind in the country.
The plant, trading as Kafue Steel, has an installed capacity to produce 200,000 tonnes of steel per annum and will employ over 6,000 Zambians when it achieves full production levels. Following successful trial operations, the plant has commenced normal operations.
In order to grow the business and to propel it to success, the company has devised a three-phased plan to steer it on its operational journey. The first phase entails construction of the plant which is now operational and producing iron and steel from locally-sourced scrap metal. Previously, the bulk of the scrap metal from Zambia was exported to South Africa.
Income derived from this initial stage will be pumped into the Second Phase which will facilitate the factory having machinery to undertake direct reduction of iron oxide, thus improving the production processes. Phase Three will be the installation of another production line that will process manganese, nickel and silica for the production of high grade steel.
The plant has set high standards for the quality of its products, adopting the BS-4360 (British Standard), the highest quality standard generally accepted in the production process applicable in many parts of the world.
A laboratory has since been constructed for chemical testing and compliance to these set standards.
The raw material for the plant, iron ore, is sourced from Sanje Hill, about 30 km from the town. The hill’s ore deposits are estimated at 8 million tonnes at 65 per cent grading. Once these are depleted, the company will then obtain the ore from Nambala in Mumbwa (Central Zambia) where deposits are estimated at about 200 mn tonnes.
The steel plant is seen as a panacea to Zambia’s economic ills, thus assisting the country diversify from its main activity, mining.
Minister of Commerce, Trade & Industry Felix Mutati expressed government’s excitement at the establishment of the plant which is set to revive the economic fortunes of Kafue town which had nose-dived due to the near-collapse of the two state-owned companies, Nitrogen Chemicals of Zambia (NCZ), the country’s main fertilizer producing firm and Kafue Textiles of Zambia (KTZ). NCZ is currently earmarked for privatization while KTZ has been sold to African Textiles Limited.
“There is great opportunity for the people of Kafue to benefit from this investment. We are aware that many people lost jobs after companies closed down and others are struggling. We feel this investment has come at the right time,“ Mr. Mutati enthused.
The project is also important to the country as it has been importing all steel requirements from abroad, with total iron and steel consumption averaging between 60,000 to 90,000 tonnes annually. The engineering and manufacturing sectors only contribute about 10 per cent to the Gross Domestic Product (GDP), down from between 19 per cent to 20 per cent in the 1980's. The low demand for iron and steel products is attributed to the relatively high cost of importation.
In recent times, Zambia has only seen the emergence of small foundries and mills that produce rolled products like deformed bars out of steel.
Great potential exists for the company to break into the export market, especially in the Common Market for Eastern and Southern Africa (COMESA) region. The major producers of iron and steel in Southern Africa are South Africa and Zimbabwe which produce nine million and one million tonnes per year respectively.
By Nawa Mutumweno