Development of Iron and Steel Industry
- Vision 2030 Manufacturing Sector
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Steel is the backbone of the economic activity of any country. The per capita steel consumption is an internationally recognized indicator of the level of development of any country. Direct and indirect consumption of steel in Kenya is projected to increase as the country embarks on the development activities as envisioned in the Vision 2030.The major Vision 2030 projects include Lamu port development, railway and roads projects, housing, Industrial parks and the development of the special economic zones all of which utilize steel products. The Iron and Steel industry in Kenya forms about 13 percent of the manufacturing sector, which in turn contributes significantly to the GDP.
The local steel industry is heavily dependent on imported raw materials, as no local sources have been developed to date. The local deposits of iron ore and coal, which are the raw materials for the production of iron, that have been identified in several Locations in the country have not attracted commercial interest.
As a policy initiative the Government has embarked on identifying and addressing the constraints in the sector that hinder full exploitation of the available raw materials that are necessary for the establishment of an Integrated Iron and Steel Industry capable of producing the high grades of steel as required in the construction, Machine tool and Motor vehicle industry with a view to develop the steel industry. This policy initiative is geared towards commercial exploitation of existing iron ore and coal deposits and utilization of locally scrap metal to produce high quality steel in Kenya. It is against this background that the Government restricted the export of scrap metal
Furthermore it is estimated that the country spends about 60 billion shillings (approximately 750 million US dollars per annum on importation of steel. This import bill can be reduced if high quality steel is produced locally. The development of the iron and steel sector has a spillover effect to other sectors of the economy and has the potential to create employment opportunities to Kenyans. A single steel plant of a capacity to produce 350,000 metric tons of steel per year can generate about 10,000 jobs not to mention the jobs created through other steel related activities. The Ministry of Industrialization is spearheading the development of Iron and Steel Industries as part of the Vision 2030 flagship projects and the following activities being undertaken and those planned for the next three years and require funding include the following:
- Project formulation
- Feasibility study on Iron ore and Coal deposits
- Feasibility study to determine the viability of an Integrated Steel Mill
- Stakeholder Workshops for the development of the Integrated Steel Mill
- Land acquisition
- Bench marking study tours
- Development of basic infrastructure
- Development of an Integrated Steel Mill
- Monitoring and evaluation exercise