Tete iron and steel project attracts Chinese companies

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Tete iron and steel project attracts Chinese companies

4:49 CAT | 11 Dec 2017

Notícias (File photo)

The Mozambican government and Capitol Resources will sign a mining contract for the extraction and processing of iron in the province of Tete in Maputo today.

The signing comes after a group of Chinese business people expressed interest in processing minerals extracted in Chiuta for the production of iron and steel in order to supply the national and regional market.

The 19,878-hectare Capitol Resources mining concession is located in the Chiúta and Moatize and includes 4,484 hectares for building an iron-processing plant.

The information about the Chinese interest was announced in Maputo on Friday by the Minister of Industry and Commerce, Max Tonela, at a meeting between representatives of the government and companies interested in implementing the Moatize and Chiúta project.

According to a Notícias report, three Chinese multinationals – Magang, Shanxi Zhangze Power and Sinosteel – have already expressed interest in participating in the project, which the Mozambican state has granted to Baobab Resources, and have initialled a memorandum of understanding to that effect with Baobab Resources.

The group of investors at the meeting requested the Mozambican government to take a detailed interest in the project.

Industry and Commerce Minister Max Tonela said the project would use local raw materials to generate a low-cost product, thus reducing imports and helping the balance of trade. The project workforce would be around 80 percent Mozambican by its third year of operation.

Minister Tonela said the venture had the potential to be the pillar of the national and regional steel industry over the next 100 years, giving investors robust returns and socio-economic benefits to the country.

“Steel production will be fundamental in the connection with other downstream and upstream industries, as it will leverage the process of industrialisation and development of sectors such as iron rod, railway rails, prefabricated sections of reinforced concrete, manufacture of fences , wire mesh, steel cables, nails, wire, among others, ” he said.

Magang is one of the 20 largest steelmakers in the world with an annual output of 20 million tons, while Shanxi Zhangze Power annually produces 10,000 MW of energy. Sinosteel is one of the largest Chinese companies in the steel industry.

Source: Notícias