Can Southern African nations build greener industry together?

Could regional collaboration turn Southern Africa into a green industry hub and rescue South Africa’s steel industry along the way? Leanne Govindsamy believes so.

She is head of just transition at Southern Transitions, a think-tank based in South Africa. Her organisation has been investigating how the Southern African Development Community (SADC) can best plan for the shift to clean energy, she told Dialogue Earth.

Working with partners at PowerShift Africa in Zimbabwe and Namibia’s Institute for Public Policy Research (IPPR), they have initially been focusing on Namibia, South Africa and Zimbabwe.

Their idea has not come out of nowhere. In January 2026, SADC members agreed in Lusaka, Zambia, to advance a regional Just Energy Transition Framework. Among the key action areas to emerge from those discussions is cooperation on green industrialisation, and a regional “just steel transition” partnership.

South Africa could use its plentiful sunshine and wind to produce some of the world’s cheapest “green iron”, which is processed using renewable energy and green hydrogen, finds recent research. Neighbouring Namibia, meanwhile, is already making strides in producing this potentially key input for low-carbon steelmaking.

“We’ve put forward this idea of a green corridor of cooperation, looking beyond just transport corridors,” said Govindsamy. The aim is to work out how country’s differing natural resource endowments can be leveraged, and the implications for the region’s steel decarbonisation.

While competition in these sectors exists, Govindsamy said, the organisations are focusing on finding opportunities for collaboration.

The three countries’ iron and steel sectors are at different junctions.

South Africa has felt the effects of decades of deindustrialisation, with closures of key steelworks resulting in huge job losses, while its first green steelmaking ventures have faltered. Namibia, meanwhile, has moved ahead with Africa’s first “zero-emissions” iron plant, powered by green hydrogen. Zimbabwe is seeing a steelmaking resurgence on the back of USD 5 billion of investment from two Chinese multinationals.

The experts Dialogue Earth spoke with suggest the three countries have much to offer each other towards green steel production: South Africa has spare industrial capacity, export infrastructure including key ports at Saldanha Bay and Richards Bay, and abundant iron ore mining waste, which can be used to make green iron. Namibia has cheap renewable energy and green hydrogen for green iron production, plus ports of its own at Walvis Bay and Lüderitz. Zimbabwe has abundant chromium ores, for stainless steel production.

Projects and ports that could support green iron and steel production and export in Southern Africa. Only operational iron ore mines and steel plants are included; hydrogen projects include those at operational, concept, feasibility study and construction stages (Data sources: Global Energy Monitor’s Iron and Steel Tracker, and Iron Ore Mines Tracker, IEA Hydrogen Tracker; Map: Dialogue Earth)

Namibia ahead of the pack

The Oshivela iron plant sits in the desert around 100 km from Namibia’s central coast. This year its operator, HyIron, begun a pilot project to use green hydrogen, produced on-site using solar power, to turn iron ore into direct reduced iron (DRI), which can be fed into electric arc furnaces to produce steel. Around the world, nearly all of this input is currently produced using fossil fuels. By using renewable resources instead, HyIron is aiming to be one of the first industrial-scale producers of this “green iron”.

These kind of projects are making iron-rich regions like Southern Africa into possible drivers of global steel decarbonisation, according to a 2025 paper by energy researcher Hilton Trollip. “Sweetspot” countries like those in the region, which have both abundant raw materials and clean energy potential, can export green iron to European and Asian steel producers. “In many cases [such imports] are substantially lower cost than local production at major steel-making locations in industrialised countries,” his paper explains.

Dietrich Remmert, a research associate at the IPPR, said initially HyIron will produce 15,000 tonnes of DRI per year, which they aim to eventually increase to over 1 million tonnes. Built with German energy and engineering partners, and financing support under the EU’s Global Gateway, the facility found its first buyer in a 2024 agreement with German steelmaker Benteler.

Green iron projects globally have so far struggled to take off, given the challenges of securing firm demand, buyer commitments and export agreements. But there remains hope that, if secured, the green iron trade could enable local industrial development in Global South countries, as well as export value.

“Once export-oriented green iron facilities are operating, they could become the foundation for a domestic decarbonised steel sector that leapfrogs the conventional carbon-intensive route,” Trollip’s paper states. “The export partnership provides the anchor investment; the anchor investment provides the foundation; the foundation enables a development trajectory otherwise foreclosed.”

For Kudakwashe Manjonjo, a just transition adviser for PowerShift Africa in Zimbabwe, scaling HyIron presents an opportunity for steelmaking in the region itself: “The question would then be, how do we increase the production of HyIron to a point where it’s actually the main feedstock for the bigger steel plants within the region?” Namibia does not produce steel itself, relying instead on imports from China and, primarily, South Africa. Coal-based blast furnaces have historically accounted for more than half of South Africa’s annual steel output, though a shift towards lower-carbon, scrap-based production is happening as major steelworks shutter. Zimbabwe’s steel revival, meanwhile, remains reliant on coal.

The sun don’t know no borders: A Zimbabwean’s perspective

Last year, Chinese metals giant Tsingshan announced that it would invest USD 800 million in Zimbabwe’s Manhize steelworks. While this will boost the country’s previously ailing steel industry, Manjonjo isn’t convinced it’s as good as it looks. “We think we’re ‘competitive’ because we’re using coal. But we’re ignoring the externality costs,” he said. “For example, I live in a coal town. We breathe in sulphuric acid all the time, but that’s not put on the balance sheets. The economic and environmental costs are not taken into account.”

Manjonjo told Dialogue Earth that the region’s competitive advantage is energy – historically in its access to coal, and now, in its solar and wind potential. The challenge, he said, is to move to generating energy with those renewable resources.

“At what point do we acknowledge that renewable energy is going to be way cheaper?” Manjonjo asked. If markets move towards cleaner steel, he suggested, focussing on coal-based steel would risk being outcompeted. “If we are not careful within the region, in terms of how we actually design our own industry, we’re going to have deindustrialisation.”

The PowerShift Africa adviser said a lot of work needs to be done to understand the challenges of keeping Zimbabwe’s steel production consistent over the next decade, including issues of jobs, demand and markets. Moves that could enable a “tipping point” towards lower-carbon steelmaking must also be considered.

Manjonjo said the focus could start “on particular areas of the value chain which are the most destructive”. He said blast furnaces could reduce emissions by incorporating a higher share of scrap metal, as is already common practice globally, or through hydrogen injection, which is currently being trialled. A more fundamental shift would be replacing blast furnaces with electric arc furnaces altogether.

He said the region could be among the most competitive in the green transition if “we harness our renewable energy … to magnify that competitive advantage within the industries that we want to focus on. Steel just happens to be one of those where we can do that.”

Currently, coal and hydropower each cover roughly half of Zimbabwe’s electricity generation, while coal accounts for over 80% of South Africa’s. Namibia’s own generation is almost entirely hydropower and rapidly growing solar, though it imports about 60% of its electricity needs from neighbours. All three are part of the existing 12-country Southern African Power Pool, an integrated grid and electricity market which Southern Transitions views as an advantage for future green collaboration.

On building up renewable capacity, Manjonjo acknowledged some difficulties of working with neighbours but also its necessity: “We basically need to ask ourselves, where does it [the sun] shine the most? And it shines the most, unfortunately, right along our borders.” 

South African steel needs a life raft

“I don’t think the South African industry has a choice other than to decarbonise,” said Charles Dednam, the secretary general of the South African Iron and Steel Institute (SAISI).

He said total steel consumption has been stagnant for a decade at about 4.5 million tonnes, of which 37% is imported. “Close to 90% is coming from the east at very reduced prices, and I can tell you the industry is suffering severely, and that’s hampering the total roadmap towards decarbonisation,” he added.

Iron ore is carried in trains in Saldanha, South Africa, photographed in 2014. Lower-carbon steelmaking has struggled to take off in the country, with plans to revive a steelworks at Saldanha that shuttered in 2020 as a green steel facility later shelved (Image: jbdodane / Alamy)

But a need to decarbonise is only equalled by the difficulty of doing so. Dednam says the country’s poor economic performance is hampering efforts to cut emissions. Financial and market pressures have already hit its biggest steelmaker in recent years: in 2025, ArcelorMittal South Africa closed its Newcastle and Vereeniging steelworks, having also shuttered its Saldanha Bay plant in 2020.

Dednam says South Africa has built facilities for annual economic growth of about 5% but the rate has actually hovered around 1% for the last decade. He says active steelmaking facilities are being used at 64% of their capacity. “If I measure it against the installed capacity [including dormant steelworks], our utilisation rate drops to 34%. No business can operate at those levels,” he said.

The SAISI secretary said this underscored how the country must target the “value-add side of steelmaking” and try to move away from the increasing dominance of commodity exports in its economy. “The mills are actually realising that decarbonisation is the route to take in order to go into the value-add link, for automotive applications specifically, and also for your green housing projects, which are gaining momentum,” he added.

Projects targeting lower-carbon steel in the country have, however, struggled to get off the ground. Most notable among those is the plan to revive the Saldanha Bay steelworks as a green steel facility, which was later cancelled. But elsewhere, green hydrogen projects such as the USD 5.8 billion plant in Nelson Mandela Bay are reportedly progressing.

Reorient integration towards just collaboration

Umeesha Naidoo is acting head of industry planning and project development at the Industrial Development Corporation (IDC), South Africa’s state-owned development bank. She identified “strong incentives” for South Africa to collaborate regionally.

Doing so could “combine Namibia’s renewable potential with South Africa’s metallurgical, steel and fabrication base.”

South Africa, meanwhile, could “strengthen supply linkages for iron ore, scrap, ferroalloys, limestone, manganese, chrome and other metallurgical inputs across the region.”

“Existing rail, port, power, industrial zones and steel assets could be repurposed or upgraded,” she added.

“The key is that regional collaboration must be structured as co-development, not a South African-centric supply arrangement,” she said, adding that collaboration would only be desirable if it creates “shared industrial value” and not short-lived benefits.

For Namibia, Naidoo said “the incentive would be to move beyond exporting green hydrogen or ammonia and make use of green iron, logistics, port services and industrial clustering.”

As for Zimbabwe, she said that as long as “governance, logistics and investment issues are addressed”, the country could provide minerals like the ferrochrome used in making stainless steel. While part of its steel demand could be met through purchases from its neighbours.

Govindsamy and Manjonjo said regional reliance is already a reality.

“Namibia currently accesses ‘fines’ – waste from iron-ore mining – from South Africa, to make their green iron; South Africa accesses metallurgical [coking] coal from Zimbabwe,” Govindsamy said.

Manjonjo also points out that labour is fluid. “Skills flow across the borders… we already have Namibians working in the steel industry in South Africa and South Africans investing in Zimbabwe’s steel industry, one or the other, and vice versa,” he said.

Govindsamy emphasised that there are opportunities to find sweet spots and areas of regional alignment that could enable regional integration, including reducing some custom duties among countries. “The Southern African Customs Union could be involved in waiving some of those duties. Then there’s role of the Southern African Power Pool in creating a greener grid to support steel decarbonisation, and wider decarbonisation for heavy industry, should the grid become greener.”