HARARE-- The Zimbabwe government and Chinese conglomerate Tsingshan Holding Group have signed an agreement to establish a one billion US dollars stainless steel manufacturing plant, with preliminary work expected to begin early next month.

Tsingshan, which has operations in China, India and Indonesia, is already operating in Zimbabwe through its chrome mining subsidiary, Afro Chine and the new investment comes barely two months after Tsingshan's chairman, Xiang Guangda, met President Emmerson Mnangagwa when he visited the Asian country in April this year.

Mines and Mining Development Ministry Permanent Secretary Munesu Munodawafa said here Monday that the plant would create up to 3,000 permanent direct jobsy.

The project wiould be located in Midlands Province and the investment will kick off with the feasibility study on July 1, this year and thereafter there is a roll-out plan depending on the feasibility study, he explained after the signing of the agreement Monday.

We anticipate that when it is fully operational this project will create up to 3,000 permanent jobs and produce up to 2 million tons of steel per year over the life of the project which we, on a very conservative note, have put at about 25 years, he added.

Tsingshan also intends to set up a 600-megawatt (MW) thermal power plant to cater for the electricity requirements of the stainless steel plant.

In order to pursue the project, Munodawafa said, the two parties had already set up a joint management committee comprising of at least two people from each side.

This is an entirely new project. It has nothing to do with Zisco steel, the Zisco Steel deal we respect and it is ongoing but Zimbabwe has enough resources, has enough iron ore. We have already put aside the iron ore requirements for the Zisco Steel project but we still have excess, and it is that excess we are allocating to this project," he said.

We have enough of all the ingredients that are required for at least two successful stainless steel projects and this is the second one, he said.

Tsingshan mainly produces stainless steel ingots, steel bars, plates, wires and seamless tubes, which are widely used in the petroleum, chemical engineering, automobile, shipbuilding and aerospace sectors.