NRZ needs over US$430m for rail link to new Manhize steel plant

Manhize will start production with no direct rail link (image: Chronicle)

The National Railways of Zimbabwe needs US$431 million for a rail link to the new Manhize steel plant, which has just started production.

The plant, built by Tsingshan’s Dinson Iron and Steel Company near Chivhu, plans to produce up to 600,000 tonnes of steel in the first phase of operations. The first output will be of pig iron, before the company expands to steel billets and bars by year-end. The company needs rail to move its products to market, both locally and for export, and NRZ general manager Respina Zinyanduko has told a Parliamentary committee that her company is seeking financing to make that possible.  

“For Manhize, we have done our costing and we have approached quite a number of financial institutions, which are willing to assist us in terms of sourcing capital to buy the requirements for Manhize”, she said. 

NRZ needs 21 locomotives and 2 650 wagons, and must upgrade an 80km stretch of rail between the Dabuka siding in Gweru to Mvuma. A 50km rail line is also needed from Mvuma to the plant.

“We will require about US$431 million for that. So, we have engaged Chinese funders and the Afreximbank. We are happy with the progress in terms of our engagements,” Zinyanduko said.

The collapse of rail has forced companies to switch to more expensive road transport, which has weighed on road infrastructure. To move products to customers, the growing mining industry is now putting in its own money to fix NRZ’s broken-down trains so that they are usable. Among these are Zimasco, one of the country’s biggest ferrochrome producers, which plans to spend US$2.46 million to refurbish 100 wagons and six NRZ locomotives. In exchange, these trains would be dedicated to Zimasco traffic, although other customers can use them when Zimasco doesn’t need them. Coal companies have also proposed to spend US$14.8 million on wagon refurbishment so that they can move coal to Maputo. NRZ has similar plans with other companies such as ZimGas and logistics company Strauss.

In May, Transport Minister Felix Mhona told Senate that NRZ was negotiating funding of US$500 million from China International Group and US$115 million from Afreximbank to recapitalise NRZ. Previously, NRZ officials said the last set of wagons was bought in 1992, and among the few locomotives still running are some that are 40 years old – almost twice their lifespan. Last year, Indian engineering company RITES signed a US$81.2 million contract to supply diesel locomotives and wagons to NRZ, Zimbabwe’s first purchase of new rolling stock in decades.

ALSO READ | How Zimbabwe’s failure to fix NRZ rot is derailing the country’s mining ambitions