Zimbabwe and China signed a $1 billion memorandum of understanding for the establishment of a steel plant that can produce up to 2 million tonnes of steel a year for 25 years, Xinhua News Agency reported June 11.

Munesu Munodawafa, Zimbabwe's permanent secretary in the ministry of mines and mining development, said the steel plant will be based in the Midland province. A 600-MW thermal power station will supply power to the plant.

China's Tsingshan Holding Group will carry out the project through its local subsidiary Afrochime, which produces chrome ore. Tsingshan is one of the top five producers of stainless steel in the world, said Munodawafa.

China, in recent years, has invested in many overseas steel projects as it looks to expands its footprint internationally. These investments include Indonesia, Serbia and even in the U.S. Such investments allow China lower duties for its steel exports to the U.S and the European Union, which have imposed tariffs on steel produced by China-owned plants.