Pula Steel buyer budgets P20m for upgrades
Mbongeni Mguni | Monday April 4, 2022 18:28
Vision Ridge, a unit of India’s Yashomann Industries, recently sealed a P16 million deal to takeover Pula Steel, a liquidated Selebi-Phikwe plant that was using scrap metal to produce an intermediary product known as steel billets. The new buyer intends to produce final steel products for the first time in the country’s history by using scrap iron, sourced locally and externally, as well as iron ore sourced from Vision Ridge’s operational Ikongwe mine near Shoshong.
This week, Chetan Patil, director of Vision Ridge, told BusinessWeek that in the next few months a technical team from India and citizen engineers would work on modifications to the existing Pula Steel plant to enable the restart of production.
One of the major works includes the installation of the rolling mill, a key component of producing final steel products such as the bars highly desired by the local construction industry.
“The priority is to restore the plant, bring it into the production of pig iron, then install the rolling mill,” Patil said on Tuesday. “We acquired the rolling mill as part of Pula Steel’s purchase. It was always lying there but they never installed it. “With the rolling mill installed, we will produce reinforced steel bars for construction.”
Patil said Vision Ridge expected to restart up to three of the four furnaces at Pula Steel within a month and dedicate some to using scrap iron and iron ore to produce final products.
“We will have a mix of about 10% scrap iron and iron ore to produce the billets, then take that to the rolling mill to produce the reinforced steel bars, which a lot of the construction industry requires,” the director said. “Our priority, for now, is bringing the plants back to operation and making our modifications. “The plant was shut down for some time and we have to refurbish it.”
It is understood at least 200 workers will be engaged initially at Pula Steel, with more due to be recruited under plans Vision Ridge has to take up an adjacent plot for its production.
Pula Steel’s liquidation has dragged since it closed in 2017, just two years after it was built at a cost of P130 million, strained by financial and technical challenges, particularly the shortage of its raw material, scrap metal.
The steel plant was fed with scrap metal from BCL Mine and was part of the mine’s life extension plans, known as Polaris II. BCL Mine injected a total of P111.2 million into Pula Steel, before also shutting down in October 2016.
Meanwhile, Vision Ridge, which plans to produce one million tonnes of iron ore per year over an initial 10-year lifespan from Ikongwe, is also stepping up its exports of the mineral, having secured a siding at Mahalapye from Botswana Railways. The siding will eventually take Ikongwe’s iron ore to the port of Beira, Patil said.
Another deal has been secured with Gabcon, which will boost the mine’s exports. The two arrangements could see the export of 65,000 tonnes of iron ore each month, Patil said.