Let’s exploit iron ore reserves to our advantage

infrastructure, build their buildings and put their factories to work.
China is already the world’s largest producer and consumer of steel and few doubt that within a decade or two the top slots for steel production will be filled by China and India, with African production rising fast.

 

Africa does not have much of a problem with the raw materials. Iron ores abound.
But China and India are both short of iron ore, and India is short of the coal required for coking.

But all these newly emerged and emerging steel giants want to own their own steel mills.
For a start they can easily specify and check the exact qualities and quantities they need, their mills can respond rapidly to order changes from their other industries, and finally they want the skilled jobs that go with steel production, both for social reasons and because it ensures that they will have adequate pools of skilled men and women for other industries.

The result is that very little steel is imported or exported around the world.
Most markets are internal, and only the smallest and least industrialised countries import.
Zimbabwe is no different. It is pushing to bring the Ziscosteel works back on line for precisely the same reasons that other countries seek to have their own steel production.

But Zimbabwe has far more iron ore than it can ever use. Being one of the oldest pieces of continent means huge quantities of iron stones were laid down, right at the beginning of life when oxygen was forming in the seas and the air.
And Essar, our partner in the steel business, are almost certainly correct when they say that the iron ore we will never use ourselves will have to be exported as iron ore, rather than made here into steel.

Already several countries are big iron ore exporters, the largest probably being Australia, a developed country that would love to export steel instead but whose Asian customers want the ore only.
So Australia exports iron ore to other steel makers, as well as coal for those who need it.

And like Australia Zimbabwe is going to have to make money in the world as it is, not as we would like it be.
One problem, and one opportunity, is that much of our abundant ore is of fairly low quality.
But apparently there are processes that can upgrade the iron concentrations and still get ore to the coast at a price where we can make a profit.

So let us investigate and plan. At least the beneficiation will create jobs and wealth in Zimbabwe.
It is likely that most of our bulk exports of minerals will have to be railed to Maputo, rather than Beira, because the bulk ore carriers that most big customers use are giant ships that need a deep water harbour.

But we already have a railway to Maputo, and we would need to see how much upgrading that will cost as part of our planning.
This does not mean we should ignore our own steel industry.

We are going to need a lot of steel ourselves as we industrialise and there will be some modest regional markets, especially if the Sadc free trade area becomes a reality.

But we have enough iron ore and coal to do both, to develop our own steel sector and to export raw materials to Asia. And we should plan for both.
There are questions about which companies should do what, but the new indiginisation laws mean that whether we chose one foreign partner or a multitude of them, we

are not going to see our resources stripped with little or no return to Zimbabwe.
Indiginisation laws can make things simpler.

With these laws preserving our economic sovereignty let us look at how we can use our resources to create wealth and jobs.