Capital Star Steel has just announced a US$12 million investment to build the country’s largest hot-dip galvanizing plant at their industrial facilities in the Beluluane Industrial Park.
Hot-dip galvanizing is a process that results in a metallurgical bond between zinc and steel, with a series of distinct iron-zinc alloys. It is an essential process to meet the international standards required for gas pipelines, LNG process plants and general infrastructure.
Commenting on the importance of this investment and the Mozambican Government’s drive for Local Content, Capital Star Steel CEO David Scheepers said: “Preliminary estimates for galvanised steel structures of Phase 1 of Total’s LNG project will provide Mozambican companies access to more 60 000 tons of steelwork opportunities, generating over 1200 direct jobs valued an estimate of US$160 million,” Scheepers said. “Including ExxonMobil’s Rovuma LNG and the recent announcement by Total of a possible further 2 trains, the opportunity for Mozambican fabricators could exceed 200,000 tons, a growth prospect generating significant employment opportunities and foreign investment into this sector.”
A new beginning
The investment comes at a moment when Mozambique is gaining a lot of attention from major Oil and Gas players due to the recent LNG-related announcements. This investment turns Capital Star Steel into a pioneer on the development of a value chain that must be developed if Mozambique is to really benefit from its upcoming LNG reality.
Although sometimes not very obvious, the growing demand for natural gas is forecasted worldwide for the next decades and Mozambique has a number of concessions that are still to be explored. In my view, Capital Star Steel investment is more than a galvanizing plant, it is the beginning of a much-needed local industry to service and supply the major natural resources projects.
Investments in the local industry will capacitate the country and create a real chance of sustainable development. Facilities such as the Beluluane Industrial Park are proof that, with the right mindset and planning, there is no reason why a good part of the industry to service the Gas boom should not be based in Mozambique.