Dinson Iron and Steel Company (DISCO), the Zimbabwean steel producer owned by China’s Tsingshan Holding Group, does not regard South African steel producers as a major competitive threat, despite South Africa currently taking the largest share of output from its Manhize plant, Mining Zimbabwe can report.
By Rudairo Mapuranga
DISCO Chief Executive Officer Benson Xu told the Parliamentary Portfolio Committee on Mines and Mining Development that the company believes its cost structure and access to local raw materials give it a strong competitive position in the regional market.
The confidence comes as DISCO’s Phase One operation at Manhize produces about 600,000 tonnes of steel annually, with the company indicating that approximately 60% of its output is currently going to South Africa.
That translates to about 360,000 tonnes a year at full Phase One capacity, making South Africa DISCO’s largest export market. Other production is supplied to Zimbabwe and regional markets such as Zambia.
For Xu, however, South Africa is not the competition.
“We do not see South Africa as a competition to us.”
The statement is significant because South Africa has historically been one of Zimbabwe’s major sources of steel, while its steel producers have also supplied markets across the wider region.
The emergence of Manhize is beginning to reverse that relationship, with Zimbabwean-produced steel now entering the South African market in significant volumes.
Raw Material Advantage
Xu attributes DISCO’s confidence partly to the location of the Manhize operation.
The company’s iron ore resource is located approximately 10 kilometres from the steel plant, substantially reducing the distance over which the primary raw material has to be transported.
DISCO also has access to coking coal from Hwange through its sister company, Dinson Colliery.
The combination gives the operation an integrated raw material supply chain, potentially reducing logistics costs and exposure to external supply disruptions.
For a steel producer operating at scale, these logistical advantages can be significant because iron ore and coal are required in large quantities.
South Africa Is a Customer, Not Simply a Competitor
The fact that around 60% of DISCO’s production is being directed to South Africa gives Xu’s position an important commercial context.
DISCO is not merely arguing that it could compete with South African producers in the future. Its products are already finding buyers in the South African market.
That creates an unusual dynamic in the regional steel industry.
Zimbabwe, which has historically imported steel from South Africa, is now supplying substantial quantities of steel to South African customers.
The development reflects the changing industrial relationship between the two neighbouring economies.
South Africa remains a major and established steel-producing country, with an extensive industrial base and established customers. DISCO’s emergence does not eliminate that competition.
However, the fact that South African buyers are taking a significant share of Manhize’s output suggests that Zimbabwean steel has established a foothold in a market where domestic producers are already present.
Beyond South Africa
While South Africa is currently the dominant destination for DISCO’s exports, the company is also targeting other regional markets.
Zambia and other SADC economies provide potential growth markets as demand for steel increases alongside mining, construction, infrastructure and industrial development.
Zimbabwe’s central position in the region also gives Manhize an opportunity to serve markets that would otherwise rely on steel transported from more distant production centres.
The company’s long-term opportunity is therefore not limited to South Africa. It is to build Zimbabwe into a regional steel production and distribution hub.
The Bigger Industrial Opportunity
The Manhize project is also significant because of its potential impact beyond steel.
Zimbabwe has long sought to move away from exporting minerals in raw or semi-processed form and importing finished industrial products.
A large domestic steel industry provides the foundation for downstream manufacturing, including fabricated steel products, engineering components, construction materials and machinery.
That could create new demand for local mining, transport, engineering and manufacturing companies while reducing the country’s dependence on imported industrial inputs.
For Tsingshan, the Manhize investment therefore represents more than a steelmaking operation. It forms part of a broader industrial and mineral beneficiation strategy in Zimbabwe.
The key test will be whether DISCO can maintain its cost advantages as production expands while ensuring reliable power, transport, product quality and access to regional markets.
But the direction of trade is already changing.
Zimbabwe is no longer only buying steel from South Africa. It is increasingly selling steel into South Africa.
And for Xu, the confidence of the Manhize operation is such that the country’s largest regional steel market is viewed not primarily as a threat, but as one of its biggest customers.
