The building of the plant is based on the raw materials and magnetite tailing available near Phalaborwa.
Davies indicated that the project would initially seek to produce 3 million tons of steel a year.
Hebei and the IDC signed a memorandum of understanding outlining the Chinese steel group’s intention of taking a 51% stake in the steel mill.
Scheduled planning is for construction to begin as early as 2015 and that the steel mill could begin production by late 2017.
This is a R4.5 billion, two phase project that will also be part-financed by the China-Africa Development Fund.
The first 3 million ton yield phase will be built at a cost of R2.8-billion.
The aim with the second phase is to produce 5 million tons of mostly construction steel by 2019.
Mining and Manufacturing divisional executive Abel Malinga estimated that the yearly demand for steel in sub-Saharan Africa could rise to 31-million tons by 2020.
The first phase of the mill is set to produce flat and long products, much like those already available in the South African market.
However the intention of the second phase is to produce steel products and grades not currently manufactured domestically.
The project is still busy with a feasibility study, looking at infrastructure, water and other factors that would determine the exact location of the mill.
Phalaborwa is a frontrunner however other sites in Limpopo are also being closely looked at.
This steel mill is one project on a long list of Chinese interests in our minerals, Hebei Zhongbo Platinum is in the process of buying Crocodile River mine and concentrator near Brits as well as the partially developed Mareesburg, Kennedy’s Vale and Spitzkop projects near Steelpoort in Mpumalanga, along with their mining and prospecting rights. IDC PRM Mandla Mpangase has laid our invasion fears to rest, indicating that there will not be a sudden influx of Chinese migrant workers for the steel mill project.
He added that this is a joint venture, and that it will greatly benefit the area in which it will be built.
