Kenya seeks partner in steel mill venture

Kenya seeks partner in steel mill venture. Kenya is set for talks with the world’s second-largest steel maker as it steps up the search for a strategic partner to help put up a plant at Sh13 billion. A team of officials led by the permanent secretary in the Ministry of Industrialisation, Prof Karanja Kibicho, is scheduled for talks with the management of South Korean firm Pohang Iron and Steel Company (POSCO) this weekend, raising hope for domestic production of the key construction and manufacturing material. “The team will try to secure collaboration in three main areas. These include manufacturing of spare parts, setting up of a mini steel mill, and an integrated steel mill,” the ministry said in a statement on Wednesday. “Preliminary exploration by the Department of Mines and Geology has established that the country has sufficient quantities of iron ore, coal, and limestone to sustain the development of steel manufacturing.” Investment opportunities. Kenya has large quantities of iron and steel in regions such Kitui, Taita Taveta, Homa Bay, and Kakamega that could be exploited for commercial purposes. Sources at the Industrialisation ministry said the government plans to set up a plant with an annual capacity of 350,000 tonnes of steel as part of a strategy to help satisfy local and regional demand. POSCO is currently pursuing such investment opportunities in other developing countries such as Vietnam and Mexico. “The development of a vibrant iron and steel industry in the country will save foreign exchange, create tens of thousands of jobs, and make Kenya self reliant in iron and steel products,” Prof Kibicho said. Government estimates show that the country spends about Sh60billion each year on importing iron and steel products to service local demand. The annual import bill is, however, likely to swell following increased demand for metal commodities by fast rising industrial economies such as China and India. Analysts said the latest earthquake disaster in Japan is expected to add pressure on steel and iron prices as the Asian nation takes on reconstruction projects. International Monetary Fund (IMF) data shows that metal prices have stayed on the climb since 2008 when the world witnessed a financial crunch. Metals posted the second largest price rebound after petroleum among all commodity groups in 2009. The sharp price rebound was largely driven by the stronger-than-expected recovery of emerging economies, with supply factors also playing a supportive role.