HARARE-- The Zimbabwean government and Chinese State enterprise Sinosteel Corporation have signed a 1.01 billion US dollars agreement for a joint operation in the production of ferrochrome and the extraction of coalbed methane gas in Matabeleland North province.

Zimbabwe's Mines and Mining Development Minister, Winston Chitando, and Sinoteel president Andong Liu signed the agreement here Monday in the presence of President Emmerson Mnangagwa and other senior government officials.

Chrome mining firm Zimbabwe Mining and Smelting Company (Zimasco) will be the implementing agency on behalf of the Zimbabwean government under the agreement which provides for Zimasco tol establish three new chrome smelting furnaces and to more than double its output to 500,000 tonnes a year by 2028.

The company will also explore coalbed methane (CBM) gas and establish a pilot 12-megawatt (MW) power plant, which will in the second phase be upgraded to 400 MW if the gas is commercially viable.

President Mnangagwa said the deal would allow the country to benefit from one of its many minerals which are currently under-exploited. Government supports Zimasco in its efforts to utilise CBM for electricity generation, he said.

The increase in ferrochrome production is in line with our drive for mineral beneficiation and value addition. These projects will be implemented at a cost of 1.01 billion dollars.

The projects are expected to create more than 5,000 jobs directly and 20,000 indirectly.

President Mnangagwa said the deal was testament of his administration's drive to ramp up investment and open up the country for business, which has in six months attracted more than 11 billion USD in foreign direct

investment commitments.

Excess power from the power plant, which will not be used at the smelting plants, will be channelled into the country's power grid, he said.

Liu said the signing of the deal signified the further strengthening of the strong bond that exists between our two countries".

Sinosteel is appreciative of your government's continued cooperation and friendship. This memorandum of agreement is clear evidence of our brotherhood and is only the beginning of what we believe will be further

co-operation between us, he said.

Our increased investment in Zimbabwe is based on a solid foundation of mutual trust, integrity and fairness which are the cornerstone of Sinosteel Corporation's culture.

Sinosteel is a major player in the global steel industry and related industries with over 30 years experience.

Over the next five years, we will be increasing ferrochrome production by an additional 120,000 tonnes to 300,000 tonnes per annum through installation of new furnaces. It is our intention to further increase ferrochrome output to 500 000 tonnes per annum by 2028, Liu said.

With the development of the ferrochrome business we shall develop the coalbed methane gas business in Matabeleland North province for the generation of power and other products. This entails a lot of exploration to prove the commercial viability of the gas.

Meanwhile, President Mnangagwa said the country was keen to explore stainless steel production as it has huge iron ore, chrome and nickel reserves.