China to build US$100 million steel plant in Mbarara

China to build US00 million steel plant in Mbarara The China Machine Building International Corporation (CMIC), which is a Chinese government company, has pledged to establish a US$100 million iron ore mining and integrated steel plant in Mbarara district.  The plant is expected to be fully operational 18 months after its construction has begun.

This was disclosed by the General Manager of the Chinese company, Mr. Li Fengshan in a meeting with President Yoweri Museveni yesterday at a meeting that he held with the visiting Chinese delegation at his country home in Rwakitura, Kiruhuura district.

General Manager Li Fengshan said that the Chinese Government had earmarked a grant of over US$200 million loan dedicated to the establishment of a steel industry in some selected African countries.

Welcoming the Chinese delegation, President Museveni emphasized the importance of the steel project and said it would go a long way in spurring the much needed development of the infrastructure in Uganda.

“We need steel industry very badly because the government does a lot of construction works, especially the construction of dams that needs fresh steel iron ore”, he noted.

The President further told the Chinese guests that once the steel is established, transport costs that were hitherto being incurred in the transportation of steel, would be reduced drastically.

According to well researched studies, the major problems facing the Ugandan steel industry are primarily low product quality and quantity and shortage of raw materials. However, the installation of continuous casting of steel by the Jinja-based Steel Rolling Mills and another Iganga-based Tembo Steel Mills all in Eastern Uganda, has improved on the level of production in the country. Uganda is home to proven high quality iron ore resources in the Eastern and South Western Regions exceeding 100 million tons.

Uganda’s steel and iron industry has also been growing at unprecedented rates averaging over 30% and 40% per annum for imports and exports respectively mainly due to the booming housing and construction sector in the country itself and the region as a whole. Steel demand in Uganda that is estimated at over 150,000 tons per annum is well above the actual steel production of over 60,000 tons per annum.