South African Business 2023

SOUTH AFRICAN

BUSINESS

AFRICAN

THE GUIDE TO BUSINESS AND INVESTMENT

IN SOUTH AFRICA

USINESS

E GUIDE TO BUSINESS AND INVESTMENT

SOUTH AFRICA

2021 EDITION

2023 EDITION

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CITY THAT’S

GEARED

FOR GROWTH

A truly smart city, Durban, KZN, South Africa seamlessly

combines an innovative business environment with an exciting,

contemporary lifestyle.

Connecting continents, here you will fi nd Africa’s busiest

port, the top ranking conferencing city and the home to

the continent’s very fi rst Aerotropolis. Boasting world-class

infrastructure, manufacturing and industrial concentration that

is constantly evolving, isn’t it time to join this progressive society

rich in investment opportunities?

…We can help you make it happen, now.

Tel: +27 31 311 4227

Email: invest@durban.gov.za

web: invest.durban

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Dube

TradePort

and King

Shaka

International

Airport - 60-

year Master

Plan - driving

growth of

aerotropolis,

or airport city

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The city of Durban

(eThekwini Municipality)

is South Africa’s

second most important

economic region

Extensive first-world

road, rail, sea and air

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Rated in top 5

‘Quality of Living’

cities in Africa and

Middle East by

Mercer Consulting in

2015

Named one of the

New 7 Wonders Cities

by the Swiss-based

New 7 Wonders

Foundation in 2014

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CONTENTS

CONTENTS

South African Business 2023 Edition

Introduction

Foreword 5

A unique guide to business and investment in South Africa.

Special features

An economic overview of South Africa 8

South Africa has the minerals that the green economy needs.

Provinces of South Africa 12

A snapshot of South Africa’s nine provinces.

Partnerships show the way for

Special Economic Zones 18

Collaboration between the private sector and government

and its agencies is paying off in eight provinces.

Economic sectors

Agriculture 42

Citrus exports have finally made it to China.

Mining 46

Platinum’s role in green hydrogen is a boon for miners.

Energy 52

Infrastructure for carrying newly-generated power is a priority.

Oil, gas and petrochemicals 56

The Central Energy Fund has become a shareholder in

a Free State gas project.

Water 62

South Africa is investigating how best to use its groundwater.

Engineering 64

A huge bridge in the Eastern Cape is an engineering challenge.

SOUTH AFRICAN BUSINESS 2023

2

DURBAN ICC AFRICA’S LEADING CONVENTION CENTRE

The Durban International Convention

Centre (Durban ICC) prides itself on

being leading venue for meetings,

business events, conferences and

exhibitions on the African continent.

However, this is not their own opinion,

but rather the overwhelming feedback

received from their clients who have

voted it in the top 1% of Convention

Centres worldwide, as well as “Africa’s

Leading Meetings and Convention

Centre” no fewer than 17 times!

The Durban ICC is a versatile venue

of enormous dimensions, flexible

enough to meet any need, no matter

how extraordinary. The Centre offers

the largest column-free, multipurpose

event space on the African continent.

International and national conventions,

exhibitions, sporting events, concerts

and special occasions of every kind

can be accommodated. Flexibility and

versatility are key factors in the design

of this state-of-the-art, technologydriven

Centre. The Centre also offers

a range of innovative solutions such

as Live-streaming events, Remotepresentation

events, Hybrid events,

and Video-on-Demand.

The Durban ICC’s highly experienced

and friendly team will ensure that

your event is seamlessly executed

giving you complete peace of mind.

Providing exceptional customer

service remains the heartbeat of the

Durban ICC, striving to ensure that

every delegate who walks through

the five-star facility has a memorable

experience.

Delegates visiting the Centre can

look forward to superb standards of

culinary excellence and hospitality.

As part of the Durban ICC’s gourmet

evolution over the past decades in

the industry, they are completely

reinventing their culinary offering

in order to showcase some of

Durban’s authentic African Cuisines.

Furthermore a wide range of new

innovative packages have been

designed to meet the unique needs

of each target market, at the best

possible rates.

Demonstrating its commitment to

quality, the Durban ICC is five-star

graded by the Tourism Grading

Council of South Africa and maintains

its ISO9001, ISO14001 and ISO22000

certifications ensuring the highest

international standards in Quality

Management, Environmental

Responsibility, Food Safety and Health

and Safety.

The DURBAN ICC offers you first-world

convenience and a proudly African

meetings experience. The Centre is

fully Wi-Fi enabled and connectivity

is complimentary to its delegates and

guests.

Durban ICC Fast Facts

• Located in Durban, known as

South Africa’s entertainment

“playground”.

• Durban International Convention

Centre (Durban ICC) comprised

of the Durban ICC Arena and the

Durban Exhibition Centre.

• Voted “Africa’s Leading Meetings

and Conference Centre” by the

World Travel Awards no fewer

than 17 times and continuously

strives to deliver excellent service

• Largest flat floor, column-free

multi-purpose event space in

Africa.

• Ranked in the world’s Top 15

Convention Centres by the

International Association of

Congress Centres (AIPC).

• The Centre is located 30-minutes

from the King Shaka International

Airport and over 3,600 Hotel

rooms are within a 10-minute walk

of the Centre.


IN SOUTH AFRICA

CONTENTS

Manufacturing 66

Innovation and expansion are happening in textiles.

Construction and property 69

The renewable energy sector has opened up new

work workstreams.

Transport and logistics 70

The value of goods transported along the N3 continues to grow.

Tourism 72

Swiss investment may underpin expansion.

ICT 74

Government’s latest mobile contract is shared by four companies.

Banking and financial services 75

African Bank is on the acquisition trail.

Development finance and SMME support 76

Expanding small business has become big business.

Education and training 78

Private education companies are growing.

References

Key sector contents 40

Overviews of the main economic sectors of South Africa.

Index 84

SOUTH AFRICAN

BUSINESS


SOUTH IN AFRICA AFRICAN

BUSINESS

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2021 EDITION

2023 EDITION

ABOUT THE COVER:

Main picture: Sasol’s octene plant at Secunda is a major contributor to the chemical sector, Sasol.

Bottom left and then left to right: Renergen has started delivering the country’s first liquified

natural gas (LNG) to Ardagh Glass Packaging & Ceramic Industries, Renergen; The Tsitsikamma

Community Wind Farm is one of many such facilities in the Eastern Cape, Cennergi; The Kruger

National Park is a superb tourism asset, Ugurhan/iStock by Getty Images; Anglo American

unveiled a huge truck powered by a hybrid hydrogen fuel cell in 2022, Anglo American; Impala

Platinum is a major producer and refiner of platinum group metals with operations in two South

African provinces and two other countries, Implats.


4

South African Business

A unique guide to business and investment in South Africa.

FOREWORD

Credits

Publishing director:

Chris Whales

Editor: John Young

Managing director: Clive During

Online editor: Christoff Scholtz

Designer: Tyra Martin

Production: Yonella Ngaba

Ad sales:

Gavin van der Merwe

Sam Oliver

Gabriel Venter

Vanessa Wallace

Shiko Diala

Administration & accounts:

Charlene Steynberg

Kathy Wootton

Distribution and circulation

manager: Edward MacDonald

Printing: FA Print

DISTRIBUTION

South African Business is distributed internationally on outgoing

and incoming trade missions, through trade and investment

agencies; to foreign offices in South Africa’s main trading

partners around the world; at top national and international

events; through the offices of foreign representatives in

South Africa; as well as nationally and regionally via chambers

of commerce, tourism offices, airport lounges, provincial

government departments, municipalities and companies.

Welcome to the 11th edition of the South African Business

journal. First published in 2011, the publication has

established itself as the premier business and investment

guide to South Africa, supported by an e-book edition at

www. southafricanbusiness.co.za.

A special feature in this journal focusses on the importance of

partnerships as the way forward for the country’s growing number of

Special Economic Zones. There are now SEZs in eight provinces and

collaboration between the private sector and government and its agencies

is proving a crucial element in pursuing the goal of industrialising the

South African economy. These zones intended as catalysts for economic

growth in established sectors and in stimulating new industries.

Regular pages cover all the main economic sectors of the South

African economy and give a snapshot of each of the country’s provinces.

The fact that South Africa’s law-enforcement agencies are arresting people

alleged to have been involved in state capture and the Reserve Bank

has started freezing assets in other matters leads the national overview

because business can’t function properly without the rule of law.

South African Business is complemented by nine regional publications

covering the business and investment environment in each of South

Africa’s provinces. The e-book editions can be viewed online at www.

globalafricanetwork.com. These unique titles are supported by a monthly

business e-newsletter with a circulation of over 35 000. Journal of African

Business joined the Global African Network stable of publications as an

annual in 2020 and is now published quarterly. ■

Chris Whales

Publisher, Global Africa Network | Email: chris@gan.co.za

PUBLISHED BY

Global Africa Network Media (Pty) Ltd

Company Registration No: 2004/004982/07

Directors: Clive During, Chris Whales

Physical address: 28 Main Road, Rondebosch 7700

Postal address: PO Box 292, Newlands 7701

Tel: +27 21 657 6200 | Fax: +27 21 674 6943

Email: info@gan.co.za | Website: www.gan.co.za

Member of the Audit Bureau

of Circulations ISSN 2221-4194

COPYRIGHT | South African Business is an independent publication

published by Global Africa Network Media (Pty) Ltd. Full copyright to

the publication vests with Global Africa Network Media (Pty) Ltd.

No part of the publication may be reproduced in any form without

the written permission of Global Africa Network Media (Pty) Ltd.

PHOTO CREDITS | Air Liquide; Atlantis SEZ; Caspir Camille Ruben

on Unsplash; Cennergi Services; Concor; Citrus Growers’ Association

of South Africa; CSIR; De Beers; Defy; Department of Trade, Industry

and Competition (the dtic); Dipuno Fund; Heineken; Lanzerac Hotel;

Mercedes-Benz SA; Raubex; Renergen; SA Investment Conference; Sappi;

Sun International; Stadio; Tetra Pak; Ubank; Kevin Wright/Vedanta Zinc

International; John Young.

DISCLAIMER | While the publisher, Global Africa Network Media (Pty) Ltd,

has used all reasonable efforts to ensure that the information contained in

South African Business is accurate and up-to-date, the publishers make no

representations as to the accuracy, quality, timeliness, or completeness of

the information. Global Africa Network will not accept responsibility for any

loss or damage suffered as a result of the use of or any reliance placed on

such information.

5 SOUTH AFRICAN BUSINESS 2023

10 REASONS

WHY YOU SHOULD INVEST IN SOUTH AFRICA

01.

HOT EMERGING

MARKET

Growing middle class, affluent consumer

base, excellent returns on investment.

02.

MOST DIVERSIFIED

ECONOMY IN AFRICA

South Africa (SA) has the most industrialised economy in Africa.

It is the region’s principal manufacturing hub and a leading

services destination.

LARGEST PRESENCE OF MULTINATIONALS

ON THE AFRICAN CONTINENT

SA is the location of choice of multinationals in Africa.

03.

Global corporates reap the benefits of doing business in

SA, which has a supportive and growing ecosystem as a

hub for innovation, technology and fintech.

05.

FAVOURABLE ACCESS TO

GLOBAL MARKETS

ADVANCED FINANCIAL SERVICES

& BANKING SECTOR

SA has a sophisticated banking sector with a major

footprint in Africa. It is the continent’s financial hub,

with the JSE being Africa’s largest stock exchange by

market capitalisation.

The African Continental Free Trade Area will boost

intra-African trade and create a market of over one

billion people and a combined gross domestic product

(GDP) of USD2.2-trillion that will unlock industrial

development. SA has several trade agreements in

place as an export platform into global markets.

YOUNG, EAGER LABOUR FORCE

09.

SA has a number of world-class universities and colleges

producing a skilled, talented and capable workforce. It

boasts a diversified skills set, emerging talent, a large pool

of prospective workers and government support for training

and skills development.

07.

04.

06.

08.

PROGRESSIVE

CONSTITUTION

& INDEPENDENT

JUDICIARY

SA has a progressive Constitution and an independent judiciary. The

country has a mature and accessible legal system, providing certainty

and respect for the rule of law. It is ranked number one in Africa for the

protection of investments and minority investors.

ABUNDANT NATURAL

RESOURCES

SA is endowed with an abundance of natural resources. It is the leading producer

of platinum-group metals (PGMs) globally. Numerous listed mining companies

operate in SA, which also has world-renowned underground mining expertise.

WORLD-CLASS

INFRASTRUCTURE

AND LOGISTICS

A massive governmental investment programme in infrastructure development

has been under way for several years. SA has the largest air, ports and logistics

networks in Africa, and is ranked number one in Africa in the World Bank’s

Logistics Performance Index.

10.

SA offers a favourable cost of living, with a diversified cultural, cuisine and

sports offering all year round and a world-renowned hospitality sector.

EXCELLENT QUALITY

OF LIFE

Page | 2

719

SOUTH SOUTH AFRICAN AFRICAN BUSINESS BUSINESS 20232020

AN ECONOMIC OVERVIEW OF

SOUTH AFRICA

The historic Lanzerac wine estate and hotel was attached by the Reserve Bank in 2022. Credit: Lanzerac Wine Estate

The appearance of alleged fraudsters in court bodes well for the rule

of law, a prerequisite for attracting investment. South Africa has the

minerals that the green economy needs.

By John Young

When the accused in the Transnet

fraud and corruption case appeared

in a specialised commercial crimes

court in October 2022, there was

not enough room in the dock for the 11 accused.

The first row of the public benches had to be used

to fit the former staff members and their alleged

accomplices to face more than 50 counts of fraud

and corruption.

In the same month, the South African Reserve

Bank seized what it understood to be former

Steinhoff CEO Markus Jooste’s assets, including

his house in Hermanus and the Stellenbosch

wine estate and hotel, Lanzerac. Given the nature

of these things, the ownership of the hotel is not

entirely clear (it involves entities registered in the

British Virgin Islands) but the broad strokes of the

bank’s actions are clear – it intends getting to the

bottom of the accounting scandal that led to losses

for investors which may amount to R200-billion.

In 2021 ex-president Zuma’s refusal to appear

before the Zondo (state capture) commission

led to him spending time in jail. His trial on

substantive corruption charges lies ahead.

For the chances of a South African economic

recovery, these events are seminal. The era of

state capture will take time and forensic effort

to unravel, but the fact that trials are happening

– and that two of the Gupta brothers were

arrested and denied bail in Dubai – means that

the country’s National Prosecuting Authority

seems to be on track again after itself being

buffeted by disruptive forces.

That the Reserve Bank is doing its bit to rein

in the private sector must also be welcomed

by businesses and investors who know that

economies can only grow if there is trust and

respect for the rule of law.

Dutch brewing giant Heineken has signalled

some confidence in the South African economy


8

SPECIAL FEATURE

with its decision to purchase Distell for a

reported R38.4-billion. Heineken already runs

(and has expanded) the Sedibeng brewery in

southern Gauteng and announced its intention

to take a majority share in its regional partner,

Namibia Breweries.

Distell brands such as Savanna, Three

Ships Whisky, Klipdrift and Amarula will give

the expanded company a much more diverse

portfolio and position it for a drive into other

African markets.

Speaking to the Sunday Times after the

release of Distell’s annual results in August

2022, Distell CEO Richard Ruston highlighted

the economic factors that the country

has to get right for the economy to thrive:

“macroeconomic stability, policy certainty and

the big infrastructure and energy initiatives”.

Getting it right

One institution that the state-capture plotters

never succeeding in getting their hands on

was the state Treasury, although there was one

fraught weekend in December 2015 when it was

touch-and-go.

With the Reserve Bank also having managed

to preserve its independence (and now

showing some muscle in the Jooste saga), the

first two items highlighted by the Distell CEO –

macroeconomic stability and policy certainty –

at least have a solid basis on which economic

planners and politicians can build.

And a very positive element is that virtually

everyone agrees that big infrastructure and

energy initiatives are what the country needs.

Quite what, how and when are still being

debated, but at least the need is agreed on.

From government’s side, there is an

initiative to coordinate efforts with regard to

infrastructure. In 2020, Infrastructure South

Africa (ISA), a programme within the Ministry of

Public Works and Infrastructure, was established.

ISA is headed by Dr Kgosientsho Ramokgopa

and it reports to the Presidential Infrastructure

Coordinating Commission (PICC) Council,

chaired by President Cyril Ramaphosa. The

body is intended as the single point of entry for

accelerated infrastructure investment, with a

Dutch brewer Heineken, which runs a brewery in

Sedibeng, has bought Distell. Credit: Heineken

particular focus on both public and private sector

social and economic infrastructure projects.

Energy and recovery

An excellent programme exists to procure the

energy that South Africa needs to expand the

economy, the Renewable Energy Independent

Power Producer Procurement Programme

(REIPPPP). The programme has suffered one

unwarranted interruption since its introduction

in 2012, but generally it has delivered what it was

intended to deliver, cheaper, greener power.

In Round Five of the REIPPPP, the cheapest

solar generation cost was 37.5c/kWh while the

best wind cost was 34.4c/kWh. These represent

remarkably low costs and are lower by an order

of magnitude than the prices that were quoted

when the programme began a decade ago.

When President Ramaphosa announced

that private power investors could create up

to 100MW of power without having to wait for

licensing, he potentially opened up a path to

growth, a path that has been constrained for

some time by the limitations of the national

utility, Eskom.

Eskom’s inability to provide enough electricity

to power the economy (and its huge debt)

rank as the biggest risks to the South African

economy. Opportunities for private consortiums

are expanding and every window of the REIPPPP

9


The cost of electricity generated by renewables has dropped enormously since the private

producers’ programme began. Credit: Cennergi Services

has been oversubscribed so there is an appetite

to enter the South African energy market.

Eskom’s unbundling will be another spur

to growth. The legal separation of transmission

is the first step, with the other two elements,

generation and distribution, to follow. The idea

is not to privatise the entities but to find private

partners and to allow for competition within the

various fields.

The R130-billion pledged at COP26 by the EU,

the US, Germany, France and the UK to assist South

Africa’s transition from oil and coal to greener

technologies is not straightforward; it comes as

a mixture of grants, risk-sharing instruments and

concessional finance but it will allow South Africa

to fund projects that will help the country to move

away from fossil fuels without further stretching

Eskom’s precarious finances.

The mining sector is also paying close

attention to the world’s shifting priorities

in terms of how to power the economy:

commodities attracting the most attention are

those which have the potential to power the

green economy, platinum group metals (PGMs)

and chrome among them. In August 2021,

South African mineral exports were 44% higher

than the year before. Covid obviously had a lot

to do with that figure, but R166.5-billion still

represented a good return.

Although gold mining is declining in volumes

(even while prices rise), the major investment

of Vedanta Zinc International in a project in

the Northern Cape and Sibanye-Stillwater’s

acquisition drive in the PGM sector are significant

economic drivers. De Beers’ investment in its

Limpopo diamond mine, Venetia, will significantly

expand that facility’s life.

Coal and iron ore continue to be exported

in large volumes through the Richards Bay

Coal Terminal on the east coast and the Port of

Saldanha on the west coast.

The agricultural sector fared fairly well during

the Covid-19 lockdown. Although sectors like

wine suffered badly, a reported increase in

maize exports, as well as greater international

demand for citrus fruits and pecan nuts, helped

the industry expand by 15% (StatsSA). However,

since Covid, there has been the Russian invasion

of Ukraine, which has not only disrupted

markets for South African produce but upset

logistics chains.

Grain crops such as maize, wheat, barley

and soya beans are among the county’s most

important crops. Only rice is imported. Wine,

corn and sugar are other major exports.

Basing economic growth on a devaluing

currency is not always the best long-term

method of boosting economic growth, but

high-value agricultural exports and increased

numbers of high-spending international tourists

hold some promise for helping to get the

South African economy back on a growth path.

Horticulture in particular is seen as holding great

potential not only for increased earnings, but for

creating jobs. South Africa’s traditional strength

in minerals still holds good. ■


10

Mpumalanga:

a world-class tourism

destination

A South African province that has everything a tourist could want.

Travellers should prepare to be astounded by the natural attractions

and experiences that are on offer in Mpumalanga. It is South Africa’s

most easterly province, endowed with an extraordinary richness

of natural beauty from canyons and waterfalls and with scope

for a huge diversity of adventures and experiences ranging from

encounter-rich game drives to paragliding. Mpumalanga offers a

wide array of activities for the active tourist, ranging from abseiling

to white-water-river rafting, with fly-fishing, paragliding, mountain

biking, bungee jumping, hiking, 4x4 trails and many outdoor

adventure activities in between.

Mpumalanga is undoubtedly the ultimate destination

in terms of wildlife experience. The Kruger National Park,

Manyeleti, Loskop Dam and numerous private game reserves

dotted throughout the region offer an exhilarating experience

that brings visitors closer to nature. Mpumalanga boasts a

conservancy area that is rich with diverse flora and fauna.

The Panorama Route offers spectacular landscapes with

attractions like the Blyde River Canyon (third-largest in the

world and known as a “green canyon” because of its subtropical

vegetation, pictured). The province also boasts majestic waterfalls

and high-altitude scenic drives leading to attractions like God’s

Window, Bourke’s Luck Potholes and the Three Rondavels.

Mpumalanga’s rich heritage is still largely unexplored

but more and more visitors are being exposed to fascinating

history. The many heritage sites in the area include the

Samora Machel monument near Mbuzini and the Barberton

Makhonjwa Mountains World Heritage Site (pictured),

boasting rock formations dating back more than 3.5-billion

years. Other sites not to be missed are the mining village of

Pilgrim’s Rest, the Highveld Heritage Route (which abounds

with adventurous tales from history), the stone circles of

Mpumalanga and Goliath’s footprint to name just a few.

Mpumalanga is rich in culture and boasts the Swazi, Ndebele

and Shangaan people with icons like Dr Esther Mahlangu

who has managed to preserve, package and export the

vibrant geometric art of the Ndebele globally.

Bird watchers can have a glimpse of more than 500

different birds endemic to the Kruger National Park or the town

of Chrissiesmeer, the centre of South Africa’s own Lake District

where four river systems start their journeys across the country.

The small tourist town of Dullstroom is referred to

as South Africa’s trout-fishing mecca. Mpumalanga is an

ideal sporting destination with several world-class golf

courses and the Mbombela Stadium that was built for

the FIFA World Cup in 2010 and has subsequently hosted

international football and rugby matches. Get off the

beaten track and explore the many other tourism offerings

of the Mpumalanga Province.

For more information:

Email: info@mtpa.co.za and reservations@mtpa.co.za

Website: www.mpumalanga.com

Facebook: Mpumalanga Tourism and Parks Agency | Twitter: @Mtpatourism | Instagram: @mpumalangatourism

SPECIAL FEATURE

Provinces of South Africa

A snapshot of South Africa’s nine provinces.

Eastern Cape

Capital: Bhisho

Main towns: Port Gqeberha Elizabeth, (formerly East

London, Port Elizabeth), Uitenhage, East London, Graaff-

Reinet, Kariega Mthatha, (formerly Grahamstown

Uitenhage),

(Makhanda)

Graaff-Reinet, Mthatha, Makhanda

Population: 6 916 200 (2015)

Area: 168 966km² (13.8%

of South Africa)

Premier:

Lubabalo Oscar Mabuyane (ANC)

Key sectors: Automotive,

agriculture, agri-processing,

agro-processing,

forestry, finance, retail, tourism,

renewable energy.

Infrastructure: Coega Industrial

Development Zone, East London

Industrial Development Zone,

ports of East London, Port

Elizabeth and Ngqura, airports at

Port Gqeberha Elizabeth and and East East London. London.

Notable tourism assets: Addo

Elephant National Park, Mountain

Zebra National Park, Wild Coast,

Jeffreys Bay, National Arts Festival.

Provincial government website:

www.ecprov.gov.za

Eastern Cape Development

Corporation: www.ecdc.co.za

Free State

Capital: Bloemfontein

Main towns: Welkom, Sasolburg,

Parys, Kroonstad

Population: 2 817 900 (2015)

Area: 129 825km² (10.6%


Premier:

Sefora Hixsonia Ntombela (ANC)

Key sectors: Agriculture,

agri-processing, agro-processing, chemical

manufacturing, mining, transport

and logistics.

Infrastructure: Maluti-A-Phofung

Special Economic Zone, Bram

Fischer International Airport,

University of the Free State,

Central University of Technology,

N8 Corridor.

Notable tourism assets: Vaal

River, Gariep Dam, Golden Gate

Highlands National Park, Cherry

Festival, Mangaung African

Cultural Festival (Macufe).


www.freestateonline.fs.gov.za

Free State Development

Corporation: www.fdc.co.za

Gauteng

Capital: Johannesburg

Main towns: Tshwane

(including Pretoria), Ekurhuleni,

Vanderbijlpark, Roodepoort

Population: 13 200 300 (2015)

Area: 18 178km² (1.5%


Premier:

David Panyaza Makhura Lesufi (ANC)

Key sectors: Financial and banking,

banking, manufacturing, manufacturing, trade, creative trade,

creative industries, industries, media. media.

Infrastructure: OR Tambo

International Airport, Gautrain, Vaal Special

major Economic universities Zone, Gautrain, and research major

institutions, universities and large research convention institutions,

large FNB convention Stadium (Soccer centres, City).

centres,

FNB Stadium (Soccer City).

Notable tourism assets: Cradle of

Humankind, Notable tourism Apartheid assets: Museum, Cradle of

Constitution Humankind, Hill, Apartheid Magaliesberg, Museum,

Soweto Constitution tours, Hill, Dinokeng. Magaliesberg,

Soweto tours, Dinokeng.


www.gauteng.gov.za


Gauteng www.gauteng.gov.za

Growth and

Development Gauteng Growth Agency: and Development

Agency: www.ggda.co.za www.ggda.co.za

SOUTH AFRICAN BUSINESS 2021 2020 2023

16 20 12

SPECIAL FEATURE

SPECIAL SPECIAL FEATURE FEATURE

KwaZulu-Natal

Capital: Pietermaritzburg

Main towns: Durban, Newcastle,

Ballito, Port Shepstone,

Empangeni, Ulundi

Population: 10 919100 100 (2015)

Area: 125 755km² (7.7% of

of South South Africa) Africa)

Premier:

Premier: Nomusa Dube-Ncube (ANC)

Sihle Zikalala (ANC)

Key sectors: Chemicals, dissolving

Key pulp sectors: manufacture, Chemicals, sugar, dissolving forestry,

pulp automotive, manufacture, textiles sugar, and forestry, footwear,

automotive, mining, oil textiles and gas, and logistics. footwear,

mining, Infrastructure: oil and gas, King logistics. Shaka

Infrastructure: International King Airport, Shaka Dube

International

TradePort, Richards

Airport, Dube

Bay Industrial

TradePort,

Richards

Development

Bay Industrial

Zone,

Development

ports of

Zone,

Richards

ports

Bay

of Richards

and Durban,

Bay and

Albert

Durban,

Luthuli International

Albert Luthuli International

Convention

Convention

Centre Complex.

Centre Complex.

Notable

Notable

tourism

tourism

assets:

assets:

HluhluweiMfolozi

HluhluweiMfolozi

Park,

Park,

the

the

Drakensberg

Drakensberg

mountains,

mountains,

iSimangilso

iSimangaliso

Wetlands

Wetland

Park,

Park,

Durban

Durban

beaches,

beaches,

South

South

Coast,

Zulu

Coast,

cultural

Zulu

heritage,

cultural

historical

heritage,

historical battlefields.

battlefields.



www.kznonline.gov.za

www.kznonline.gov.za

Trade and Investment KwaZulu-

Trade and Investment KwaZulu-

Natal: www.tikzn.co.za

Natal: www.tikzn.co.za

Limpopo

Capital: Polokwane

Main towns: Musina, Ba-Phalabora,

Ba-Phalabora, Bela-Bela, Steelpoort, Bela-Bela, Tzaneen,

Steelpoort, Thohoyandou Tzaneen, Thohoyandou

Population: 5 726 800 (2015)

Area: 125 755km² (10.2% of

of South South Africa) Africa)

Premier:

Premier: Chupu Stanley Mathabatha (ANC)

Chupu Stanley Mathabatha (ANC)

Key sectors: Mining, agriculture,

Key tourism, sectors: logistics. Mining, agriculture,

tourism, logistics.

Infrastructure: Musina-Makhado

Infrastructure: Special Economic Musina-Makhado

Zone,

Special

Fetakgomo-Tubatse

Economic Zone,

Special

N1

highway

Economic

and

Zone,

rail

N1

network,

highway

new

and

Medupi

rail network,

power

new

station.

Medupi power

station.

Notable

Notable

tourism

tourism

assets:

assets:

Kruger

Kruger

National

National

Park,

Park,

Mapungubwe

Mapungubwe

Heritage

World Heritage

Site, Makapans

Site, Makapans

Valley,

Marula

Valley, Marula

Festival,

Festival,

Waterberg

Waterberg

Biosphere.

Biosphere.



www.limpopo.gov.za

www.limpopo.gov.za

Limpopo Economic

Limpopo Economic Development

Development Agency:

Agency: www.lieda.gov.za

www.lieda.gov.za

Mpumalanga

Capital: Mbombela

Main towns: Emalahleni,

Middelburg,

Middelburg, Sabie,

Sabie,

Lydenburg

Lydenburg

Population:

Population: 4

283

283

900

900

(2015)

(2015)

Area: 76 495km² (6.3% of

Area: 76 495km² (6.3%

South Africa)


Premier:

Refilwe Premier: Mtshweni-Tsipane (ANC)

Refilwe Mtshweni-Tsipane (ANC)

Key sectors: Agriculture, forestry,

mining, steel manufacturing,

petrochemicals,

Key sectors: Agriculture,

pulp and

forestry,

paper,

power mining, generation, steel manufacturing, tourism.

petrochemicals, pulp and paper,

Infrastructure: power generation, Nkomazi tourism. Special

Economic Infrastructure: Zone, Nkomazi Mbombela Special

International Economic Zone, Fresh Mbombela Produce

Market, International Maputo Fresh Development

Produce

Corridor, Market, Maputo Kruger Development

Mpumalanga

International Corridor, Kruger Airport. Mpumalanga

International Airport.

Notable tourism assets: Kruger

National Park, Blyde River Canyon,

Canyon, Barberton Barberton Makhonjwa Makhonjwa Mountains

Mountains (a UNESCO World (a UNESCO Heritage World Site).

Heritage Site).


Provincial www.mpumalanga.gov.za

government website:

www.mpumalanga.gov.za

Mpumalanga Economic Growth

Mpumalanga Agency: www.mega.gov.za

Economic Growth

Agency: www.mega.gov.za

21 13

17 SOUTH AFRICAN BUSINESS 2020 2021


SPECIAL FEATURE

SPECIAL FEATURE

Northern Cape

Northern Cape

Capital: Kimberley

Capital: Main towns: Kimberley Douglas, Upington,

Main De Aar, towns: Port Nolloth, Douglas, Colesberg Upington,

De Aar, Port Nolloth, Colesberg

Population: 1 185 600 (2015)

Population: Area: 372 889km² 1 185 600 (30.5% (2015) of

Area: South 372 Africa) 889km² (30.5%


Premier:

Premier: Dr Zamani Saul (ANC)

Dr Zamani Saul (ANC)

Key sectors: Agriculture, mining,

Key renewable sectors: energy, Agriculture, astronomy. mining,

renewable energy, astronomy.

Infrastructure: Upington Industrial

Park, Sol Plaatje University,

Infrastructure: Vaalharts Irrigation Upington Scheme, Special

Economic Square Kilometre Zone, Sol Array Plaatje telescope

University, project, Namakwa Vaalharts Special Irrigation

Scheme. Economic Zone.

Notable tourism assets: Six

national parks including the

Notable Kgalagadi tourism Transfrontier assets: Park, Six

national Orange River, parks spring including flower the

Kgalagadi displays, diamond Transfrontier routes. Park,

Orange River, spring flower

displays, diamond routes.


www.northern-cape.gov.za

Department of Economic

Development and Tourism:

www.northern-cape.gov.za/dedat

North West

North West

Capital: Mahikeng

Capital: Main towns: Mahikeng Klerksdorp,

Main Rustenburg, towns: Klerksdorp, Brits, Potchefstroom

Rustenburg, Brits, Potchefstroom

Population: 3 707 000 (2015)

Population: Area: 104 882km² 3 707 000 (8.6%(2015)

of



Premier:

Premier: Bushy Maape Professor (ANC) Tebogo Job

Mokgoro (ANC)

Key sectors: Mining, agriculture,

Key agri-processing, sectors: Mining, automotive agriculture,

agri-processing, components. automotive

components.

Infrastructure: Hartbeespoort

Infrastructure: Dam, Pelindaba Hartbeespoort

nuclear research

Dam, unit, North-West Pelindaba nuclear University, research

unit, Bakwena North Platinum West University, Highway.

Bakwena Platinum Highway.

Notable tourism assets: Sun City,

Mmbatho Palms Hotel Casino

Notable Convention tourism Resort, assets: Pilanesberg Sun City,

Mmbatho National Park, Palms 18 Hotel luxury Casino lodges in

Convention Madikwe Game Resort, Reserve. Pilanesberg

National Park, 18 luxury lodges in

Madikwe Game Reserve.


Provincial www.nwpg.gov.za government website:

www.nwpg.gov.za

North West Development

North Corporation: West Development

www.nwdc.co.za

Corporation: www.nwdc.co.za

Western Cape

Western Cape

Capital: Cape Town

Capital: Main towns: Cape Stellenbosch,

Town

Main George, towns: Plettenberg Stellenbosch, Bay, Beaufort

George, West, Oudtshoorn, Plettenberg Worcester, Bay, Beaufort

West, Malmesbury Oudtshoorn, Worcester,

Malmesbury

Population: 6 200 100 (2015)

Population: Area: 129 462km² 6 200 100 (10.6% (2015) of



Premier:

Premier: Alan Winde (DA)

Alan Winde (DA)

Key sectors: Agriculture, agriprocessing,

sectors: wine Agriculture, and grapes, agri-

Key

processing, financial services, wine and manufacturing, grapes,

financial tourism, oil services, and gas, manufacturing,

boatbuilding.

tourism, Infrastructure: oil and Ports gas, of boatbuilding. Cape Town,

Infrastructure: Saldanha and Mossel Ports of Bay, Cape Mossgas

Town, oil-to-gas Saldanha refinery, and Cape Mossel Town Bay,

Mossgas International oil-to-gas Airport, refinery, Cape Town Cape

Town International International Convention Airport, Centre, Cape

Town Koeberg International nuclear power Convention station.

Centre, Notable Koeberg tourism nuclear assets: Table power

station. Mountain, Garden Route National

Notable Park, Karoo tourism National assets: Park, Table West

Mountain, Coast National Garden Park, Route Kirstenbosch National

Park, Botanical Karoo Gardens, National Cape Park, Point, West

Coast V&A Waterfront, National Park, Plettenberg Kirstenbosch

Botanical Bay, Route Gardens, 62, Zeitz Cape Museum Point, of

V&A Contemporary Waterfront, Art. Plettenberg

Bay, Route 62, Zeitz Museum of

Contemporary Provincial government Art. website:

www.westerncape.gov.za

Provincial Wesgro: www.wesgro.co.za

government website:

www.westerncape.gov.za

Wesgro: www.wesgro.co.za


14

SOUTH AFRICAN BUSINESS 2021 2020 18 22

FOCUS

Sectoral strengths of

South African provinces

SECTORAL STRENGTHS OF

SOUTH AFRICA’S PROVINCES

A wide variety of investments are available.

Gauteng:

• Financial and business services

• Information and communications

technology

• Transport and logistics

• Basic iron and steel, steel products

• Fabricated metal products

• Motor vehicles, parts and accessories

• Appliances

• Machinery and equipment

• Chemical products, pharmaceuticals

North West:

• Agro-processing

• Mining

• Agriculture and agro-processing

• Tourism

• Metal products


• Renewable energy (solar)

Northern Cape:

• Mining


• Fisheries and aquaculture

• Renewable energy (solar, wind)

• Jewellery manufacturing

Limpopo:

• Mining

• Fertilisers

• Tourism

• Agriculture

• Agro-processing

• Energy, including

renewables (solar)

SPECIAL FEATURE

Mpumalanga:

• Mining

• Tourism

• Forestry, paper and paper

products, wood and wood

products

• Agriculture and agroprocessing

• Metal products

FOCUS

KwaZulu-Natal:


• Tourism

• Motor vehicles, parts and

accessories

• Petrochemicals

• Aluminium

• Clothing and textiles


• Agriculture and agroprocessing

• Forestry, pulp and paper,

wood and wood products

Western Cape:

• Tourism

• Financial and business services


• ICT


• Fisheries and aquaculture

• Petrochemicals

• Basic iron and steel


• Renewable energy (solar, wind)

Free State:


• Mining

• Petrochemicals


• Tourism

Eastern Cape:

• Motor vehicles, parts and

accessories

• Forestry, wood and wood products


• Pharmaceuticals

• Leather and leather products

• Tourism

• Renewable energy (wind)

Page | 40

Source: Industrial Development Corporation (IDC); The Case for Investing in South Africa, Executive Summary

Source: Industrial Development Corporation (IDC)

(South African Investment Conference, 2018).

SOUTH AFRICAN BUSINESS 2021

15

20 23 SOUTH SOUTH AFRICAN AFRICAN BUSINESS BUSINESS 2020 2023

FOCUS

Promoting responsible investment

into the oil and gas sector

Petroleum Agency South Africa (PASA), the official agency that

promotes and regulates the country’s onshore and offshore

resources, is busier than ever dealing with international queries.

The decision by TotalEnergies to submit a

production plan for their recent discoveries

off the coast of Mossel Bay coincided with

the beginning of commercial operations of

Tetra4’s natural gas project in the north-eastern Free

State. These two events prove that investors can see

that the South African resources equation adds up

to something worthwhile.

These are exciting times for exploration in South

Africa. Both of these projects came about through

the licensing authority of Petroleum Agency South

Africa (PASA), the agency of national government

which reports to the Minister of Mineral Resources

and Energy (DMRE). PASA regulates and monitors

exploration and production activities and is

the custodian of the national exploration and

production database for petroleum. Its role was

statutorily endorsed in June 2004 in terms of the

Mineral and Petroleum Resources Development

Act of 2002.

In terms of strategy, the agency actively

seeks out technically competent and financially

sound clients to whom it markets acreage, while

ensuring that all prospecting and mining leases

are for the long-term economic benefit of South

Africa. As custodian, PASA ensures that companies

applying for gas rights are vetted to make sure

they are financially qualified and technically

capable, as well having a good track record in

terms of environmental responsibility. Oil and gas

exploration requires enormous capital outlay and

can represent a risk to workers, communities and the

environment. Applicants are therefore required to

prove their capabilities and safety record and must

carry insurance for environmental rehabilitation.

As part of a drive to create certainty for investors,

a new bill has been introduced to replace old

legislation. The Upstream Petroleum Resources

Development (UPRD) Bill provides for greater

certainty in terms of security of tenure by combining

the rights for the exploration, development and

production phase under one permit.

The draft bill was first published in June 2021

and discussions with industry stakeholders are

ongoing. Organisations such as the South African

Oil and Gas Alliance (SAOGA) will be coordinating

responses to present to parliament. Objectives of

the bill include:


16

Credit: Shutterstock

• expanding black participation

• promoting local employment and skills

development

• creating an enabling environment to accelerate

exploration and production of South Africa’s

petroleum resources.

Sustainable development: balancing development

with environmental protection

South Africa has vast gas and oil resources and

exploration and the exploitation of these resources

has barely scratched the surface. Having to import

oil and gas has a serious impact on the country’s

balance of payments.

This makes it more difficult to industrialise the

country. For the 2021/22 financial year about 50

applications for exploration and production were

received but only about 10% of that number

were approved.

This is because of very stringent licensing and

environmental regulations which must be followed.

As PASA CEO Dr Phindile Masangane explains, “We

assure South Africans that the slow pace is because

we have to make sure that we have a robust

system that incorporates all the aspects of licensing

but importantly, that the environmental impact

assessment is thoroughly undertaken.”

Despite this, planned seismic surveys were halted

after opponents of the process went to court in 2021

and 2022. Proponents of continued exploration

argue that the seismic process being followed is no

different to that which has been followed in the past,

and which is employed all over the world.

Dr Masangane told Bloomberg in August 2022:

“As the Petroleum Agency, we acknowledge that

South Africa’s upstream oil and gas industry has

become litigious.” She noted that local consultation

standards are going to be evaluated and improved

if necessary. This aspect of the process has been the

subject of criticism in the court cases.

Investors are still very interested in the South

African proposition, as the TotalEnergies offshore and

the Free State project prove. Most offshore project

exploration interest tends to come from foreign

investors because of the high costs but within

South Africa, there is a growing number of local

participants. A women and black-owned company,

Imbokodo, is making a name for itself as a participant

as a shareholder in a number of licensing rounds.

Revised draft regulations related to hydraulic

fracking in the gas-rich Karoo region were

published by the Department of Forestry, Fisheries

and the Environment (DFFE) in July 2022 for public

comment. Fracking is a drilling technique that

is widely used in other jurisdictions such as the

United States, but environmental concerns have

been raised. Dr Masangane further told Bloomberg

that groundwater and geological studies are

being conducted in the biodiversity-rich areas of

the Karoo and that once regulations have been

finalised, seismic activity will be undertaken to

establish which blocks to license.

As part of an attempt to engage in a broader

discussion on policy issues, a joint colloquium was

held in 2022 on the subject of how to balance South

Africa’s energy needs with the country’s climate

change commitments. The colloquium, and several

online events which prepared for and anticipated

the main event, was jointly hosted by the DMRE, the

DFFE and PASA.

Dr Masangane is convinced that a balance

can be achieved between developing renewables

and continuing to exploit the country’s (and the

continent’s) oil and gas reserves. She points out

that the use of certain fuels for cooking leads to

deforestation: “If they were to use gas, whether

it is LPG or natural gas for cooking that in itself

is decarbonisation because then you arrest the

negative impact of deforestation. We must not buy

into a false narrative and a false choice. It is possible

that we can have a dual strategy.” ■


Partnerships show the way for

Special Economic Zones

Collaboration between the private sector and government and its

agencies is paying off in eight provinces.

The goal of industrialising the South

African economy is a major objective of

the Special Economic Zone programme.

These zones (which include Industrial

Parks) are intended as catalysts for economic

growth in established sectors and in stimulating

new industries.

Collaboration between national government

(through the Department of Trade, Industry

and Competition, the dtic, which oversees

the programme), provincial departments and

municipalities, economic development agencies and

private companies in key sectors is a vital component

in making Special Economic Zones work.

Policy goals

As defined by the dtic, Special Economic Zones

(SEZs) are geographically designated areas set

aside for specifically-targeted economic activities,

supported through special arrangements (laws, tax

rebates) and systems that are often different from

those that apply in the rest of the country.

South Africa’s Industrial Policy Action

Plan (IPAP) identifies SEZs as growth engines

towards government’s strategic objectives of

industrialisation, regional development and

employment creation.

The purpose of the SEZ programme is to:

expand the industrialisation focus to cover diverse

regional development needs; provide a clear,

predictable and systemic planning framework

for the development of a wider array of SEZs to

support industrial policy objectives; clarify and

strengthen governance arrangements, expand

the range and quality of support measure

beyond provision of infrastructure; and provide a

framework for a predictable financing framework

to enable long-term planning.

Partnerships

In some parts of the country, an anchor tenant

is central to the concept of the approved or

proposed SEZ.

In East London, the presence of Mercedes-

Benz South Africa makes the clustering of

automotive suppliers in the East London IDZ both

logical and cost-effective. The Northern Cape’s

proposed Namakwa SEZ is predicated on the huge

operations of the existing Gamsberg Zinc Mine

(pictured) and the proposed smelter to be built by

international investor Vedanta Zinc International.

In eastern Limpopo, the Mining Supplier Park

run by mining company Glencore is forming the

core around which the Fetakgomo-Tubatse SEZ

is being created. Local and district municipalities

are investing in basic infrastructure, while the

provincial government has allocated staff from

its Department for Economic Development,

Environment and Tourism to drive the process. The

same provincial department has created a stateowned-company

to run the Musina-Makhado SEZ

in the northern part of the province.


18

SPECIAL FEATURE

Credit: Kevin Wright/Vedanta Zinc International

The country’s biggest diamond miner, De

Beers, is partnering with the local tertiary college,

the Venda TVET College, by offering engineering

graduates a chance to gain practical experience at

its Musina operations. The decision by the college

to locate its engineering facility within the SEZ is

another example of collaboration.

Part of the value proposition of the Upington

Industrial Park is based on the plans of Airports

Company South Africa to develop the local airport

as a base for storage of aircraft and for maintenance

and repairs. The fact that major automotive

manufacturers test their cars in the Northern Cape

on a regular basis is something that the Northern

Cape Economic Development Agency (NCEDA) is

promoting as an opportunity for investors.

Mining is at the heart of another planned

Northern Cape project, the Kathu IDZ. Big

companies such as Sishen Iron Ore Company,

Kumba, Assmang and South32 have expressed

support and the project has been submitted by

the NCEDA to Infrastructure South Africa to be

registered as a catalytic project.

The OR Tambo International SEZ (Gauteng

IDZ) leverages the advantages of being located

at a major transport hub for access to African

and international markets. The SEZ’s location

within the Ekurhuleni Metropolitan Municipality

means that there are also many opportunities

for tie-ups with a huge variety of manufacturing

enterprises – Ekurhuleni has the country’s densest

concentration of manufacturing operations. An

interesting example of inter-government partnership

came about in December 2020 when the City of

Cape Town transferred general industrial-zoned

properties worth R56.5-million to the Atlantis Special

Economic Zone Company (SOC) Ltd. In return, the

City became a shareholder in the company.

An earlier cooperative agreement between

the City of Cape Town and the Western Cape

Provincial Government had set out the terms for

the transaction once the Atlantis SEZ Company

was registered.

The signing of this land agreement meant the

ASEZ Company assumed responsibility for the

usage, administration and control of the property.

The total area of proclaimed land is 118 hectares,

of which 25ha has already been developed by

five investors. The difficulty was that the other

94ha of land belonged to the City of Cape Town

and was subject to various conditions about

the rate at which it could be rented out or sold.

By incorporating the City of Cape Town as a

shareholder, the land was unlocked and the SEZ

was in a position to expand.

A few kilometres north of Atlantis, the Saldanha

Bay Industrial Development Zone (SBIDZ) has

to work hand-in-hand with the Saldanha Bay

Municipality (SBM) and the Transnet National

Port Authority (TNPA) as it defines its role and

expands its offering. As an example of the level of

cooperation envisaged for SEZ development, the

R3.5-billion first phase of the expansion of the Port

of Saldanha is described in an SBIDZ press release

as being understood as “a long-term partnership

between the government, its institutions and the

private sector”.

The press release further explains how the

process fits into the national context:

“This transaction model has proven the best

way to fund long-term assets in a competitive

environment. The SBIDZ has begun the formal

process of submitting this project to the Investment

and Infrastructure Office in the Office of the

Presidency, supported by the National Treasury,

for inclusion in the Sustainable Infrastructure

Development Symposium (SIDS).” ■


SPECIAL FEATURE

Geographical focus

SEZs are located in areas with particular resources and historical sectoral strengths. The

relevant SEZ is geared to serve, support and encourage development of those resources

and sectors. There are currently 15 Special Economic Zones in eight provinces. Some of

the zones are in the process of being officially proclaimed as SEZs.

Province: Limpopo

Name: Musina-Makhado SEZ

SEZ status: Approved

Focus: Light industrial, agroprocessing,

metallurgical, mineral

beneficiation, solar power

Province: Limpopo

Name: Fetakgomo-Tubatse SEZ

SEZ status: Pending

Focus: Green energy, hydrogen,

mining inputs, mineral

beneficiation

Province: Gauteng

Name: Vaal SEZ

SEZ status: Pending

Focus: Logistics, agriculture and

agro-processing, tourism, alternate

energy (solar, battery storage,

hydrogen)

Province: Gauteng

Name: OR Tambo International

Airport (Gauteng IDZ)


Focus: Beneficiation of precious

metals and minerals sector, light,

high-margin, export-oriented

manufacturing

Province: Gauteng

Name: Tshwane Automotive SEZ


Focus: Automotive, automotive

components, manufacturing,

export manufacturing

Province: Mpumalanga

Name: Nkomazi SEZ

SEZ Status: Approved

Focus: Strategic location on

Maputo Corridor is major selling

point; logistics, agro-processing,

manufacturing, nutraceuticals,

fertiliser products

Province: Free State

Name: Maluti-A-Phofung SEZ


Focus: Located on N3 highway;

logistics, manufacturing,

agro-processing

Province: KwaZulu-Natal

Name: Richards Bay IDZ


Focus: Export-oriented

manufacturing, storage and

manufacture of minerals to

boost beneficiation,

techno-parks

Province: KwaZulu-Natal

Name: Dube TradePort


Focus: Industry, cargo-handling

and logistics, agro-processing,

telecommunications

Province: Eastern Cape

Name: East London IDZ


Focus: Automotive, agroprocessing,

aqua-culture

Province: Eastern Cape

Name: Coega SEZ


Focus: Automotive, agroprocessing,

aquaculture, energy,

metals, logistics and business

process services (BPO)

Province: Western Cape

Name: Atlantis SEZ


Focus: Green Tech, including

automotive components and

components for wind turbines, solar

panels and green building materials

Province: Western Cape

Name: Saldanha Bay IDZ


Focus: Oil, gas and marine repair,

engineering and logistics services

complex, fabrication

Province: Northern Cape

Name: Namakwa SEZ

SEZ status: Pending

Focus: Downstream activities

from proposed zinc smelter,

mineral beneficiation,

construction, green energy,

petrochemicals, transport

Province: Northern Cape

Name: Upington IDZ

SEZ status: Pending

Focus: Renewable energy, aviation,

automotive, agro-processing

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INTERVIEW

Promoting the industrialisation

of South Africa

The Musina-Makhado Special Economic Zone is ideally placed to bolster national

plans, says CEO Lehlogonolo Masoga, while carrying out an inspiring vision for the

region’s economy and people.

Lehlogonolo Masoga

BIOGRAPHY

Lehlogonolo Masoga has more than 20

years of experience as an administrator

and public servant, most recently as

Deputy Speaker of the Limpopo Provincial

Legislature and MEC for Roads and

Transport. He served as the spokesperson

for the former LEDET MEC and Minister of

Public Administration, the late Mr Collins

Chabane. Lehlogonolo holds three Master’s

degrees: Governance and Public Leadership

(Wits), Development Studies (Limpopo) and

an MSc in Leadership and Change (Leeds

Beckett University, UK). He has B-Tech HRM

from UNISA and a professional diploma

in Humanitarian Assistance from the

Liverpool School of Tropical Medicine (UK)

and is currently a registered PhD candidate

in Public Administration.

Please explain the rationale behind Special Economic Zones.

Special Economic Zones (SEZs) are growth engines towards government’s

strategic objectives of industrialisation, regional development,

employment creation, the improvement of existing infrastructure, skills

development and technology transfer by attracting foreign direct

investment and strengthening the export of value-added commodities.

SEZs are geographically-designated areas set aside for targeted economic

and sector-focused activities, supported through special arrangements

(that may include laws) and systems that are often different from those

that apply in the rest of the country. This is a strategic phenomenon

which has transformed economies across the globe by developing

major industrial development zones with ripple effects such as the

development of new towns and smart cities.

How do SEZs fit into national plans such as the Industrial Policy Action

Plan (IPAP)?

IPAP recognises the role of industrial parks and Special Economic

Zones as strategic vehicles for industrial activities which promote

beneficiation and manufacturing. The support which is provided to SEZs

in terms of infrastructure, regulatory framework and incentive schemes

provides a conducive environment to bolster industrialisation. The IPAP

classifies Special Economic Zones into key categories which include

Industrial Development Zones, Free Ports, Free Trade Zones and Sector

Development Zones.

How does the MMSEZ fit into regional and provincial planning

initiatives?

The priorities of the Limpopo Development Plan 2020-2025 and the

Medium-Term Strategic Framework include the following:

• Transformation and modernisation of the provincial economy

• Integrated and sustainable socio-economic infrastructure

development

• Spatial transformation for integrated socio-economic development

• Economic transformation and job creation through regional

integration

These policy priorities reinforce the business case of the Musina-

Makhado Special Economic Zone in line with the vision of the provincial


22

INTERVIEW

administration. A successful MMSEZ will result in

South Africa’s active participation and leadership

in the African Continental Free Trade Area (AfCFTA)

and the industrialisation strategy of SADC.

The Limpopo Development Plan articulates an

inspirational vision about the future as follows:

The Limpopo Province of the future will create an

environment that is mutually beneficial, where rural

living and smart cities coexist in harmony, adopting

the future without losing touch with our heritage.

The new Limpopo Province will:

• Develop new smart green cities with integrated

transport systems.

• Embrace renewable energy to reduce the

reliance on fossil fuels.

• Develop and implement new 4IR education

systems that can inspire and prepare the youth

and adults for the future.

• Evolve businesses to embrace the 4IR and be

globally competitive.

• Evolve the provincial economy from being

mostly dependent on the primary sectors, to

a diverse and inclusive economy, with growth

potential to reduce unemployment significantly.

• Have happy, prosperous and connected

communities.

• Have new economic infrastructure that can

enable Limpopo to leap into the future, such

as drone airports to assist in delivering packages

to rural areas.

What underpins the geographic spread of SEZs?

During the early 2000s, government adopted the

Industrial Development Zones, which were mainly

concentrated in the historical economic hubs and

coastal regions. The SEZ model recognised a need

to harness the country’s economic competitive

advantages across the value chains. Our economy

boasts various competitive advantages which span

across various provinces. This new approach has

created an unprecedented opportunity for rural

provinces such as Limpopo to participate in this

magnificent programme.

What measures are undertaken to encourage

investments in SEZs?

The success of a Special Economic Zone is

dependent on its capacity to attract and retain

both domestic and foreign direct investment. The

secret to unlocking investment lies in the readiness

of the infrastructure, packaging of a solid business

case, project preparation, marketing and investment

promotion strategies.

What collaborations is the MMSEZ engaged in?

When the MMSEZ was officially designated in 2017,

among the things that the provincial government

had to start preparing for was skills development

among the youth who will require new and

advanced skills to work in the project. An idea to

establish the Vhembe TVET College Musina Satellite

Campus was mooted and with the support of

Venetia Mine, a start was made. When the college

management were looking for a new piece of

land to build a proper campus around Musina, an

opportunity was identified to relocate the campus

into the North Site of the MMSEZ.

The beauty of the MMSEZ-VTVET partnership lies

in the fusing of skills development and industrial

platforms within the same zone. We are pleased

with the support provided to this pioneering

initiative by both the provincial and national

government. This initiative will also form part of

the foundation and a seed for the development of

a new smart city in Musina.

What is the MMSEZ strategy on SMMEs?

Small, micro and medium-sized enterprises

are the lifeblood of any economy to facilitate

economic empowerment and job creation.

Economic transformation through the

empowerment of SMMEs and historicallydisadvantaged

individuals has undergone

several policy setbacks that threatened the

country’s path for economic transformation.

Among the first steps undertaken by the

MMSEZ SOC to level the playing field for

the empowerment of local enterprise and

entrepreneurs was the development of an

Enterprise Development Strategy, through

which local enterprises and entrepreneurs

will be prioritised in terms of opportunities

presented by the SEZ. They will also receive the

necessary support for them to reach their full

potential and become the integral part of the

MMSEZ ecosystem. ■


INVESTMENT

The Musina-Makhado Special Economic

Zone is attracting investment

Both private and public institutions have committed funds and a

mining company is engaged in a partnership.

The Musina-Makhado SEZ (MMSEZ) is

intended as a catalyst for massive future

investment in the region and support of

industrialisation and economic growth.

The MMSEZ has already attracted significant

investment from public and private investors and a

strong pipeline of further investment is envisaged.

Government

Major investments in infrastructure are being

provided by the Provincial Government of Limpopo

through the Limpopo Department of Economic

Development, Environment and Tourism (LEDET).

Of R600-billion pledged to develop infrastructure

for the North Site of the MMSEZ over the mediumterm

expenditure framework (MTEF), some R39-

million has been spent to date on engineering work

and the 2022/23 financial year will see a further

allocation of R200-million for items such as security,

water and electricity infrastructure.

The entity which has been created to run the

SEZ, the MMSEZ state-owned-company (MMSEZ

SOC), is responsible for coordinating investments

and guiding the process towards the realisation and

functioning of the Special Economic Zone.

Partnerships

The local Technical Vocational and Educational

and Training college, Vhembe TVET College, is

investing in establishing a campus in Musina to

complement the development of the SEZ.

A satellite campus was originally established

but through a partnership between the MMSEZ

SOC and Vhembe TVET the engineering campus

will relocate to a site within the SEZ site. De

Beers will support the graduates with on-thejob

training.

The SEZ will thus be supporting the skills profile

of the district and combining skills development

and industrial development. Additional investments

in student accommodation and retail outlets to

support the student population will further enhance

the diverse offering within the SEZ.

Having a tertiary college located within the SEZ

will form an important first building block towards

creating a Smart City in Musina.

Private sector

The investment value of the 1 000MW Solar Power

Plan to be constructed in the SEZ is valued by the

provincial government at US$1.5-billion. The project

is being undertaken by Huadian Hong Kong Ltd,

the company that has signed a Memorandum of

Understanding (MoU) with LEDET.

Eskom has started with the inception and

scoping report for bulk electricity infrastructure of

the MMSEZ, which will connect the power plant to

the grid. ■

FURTHER INVESTMENT OPPORTUNITIES

OUTSIDE THE ZONE

Real estate

Retail | Hotels

Private hospital

General manufacturing

Agro-processing | Warehousing | Industrial property

Petroleum depot

INSIDE THE ZONE

Renewable energy

Office park | Hotel | Student accommodation

Real estate

ICT

Musina dam

Cross-border trade

Airport development | Education and training

Entertainment

MMSEZ

SPECIAL FEATURE

A world of game-changing opportunities

What is the Musina-Makhado Special Economic Zone?

What is Musina-Makhado Special Economic Zone (MMSEZ)?

MUSINA-MAKHADO SEZ CLUSTERS

The What MMSEZ is the is Musina-Makhado a flagship initiative Special Economic of the Limpopo Economic Zone? Provincial

Zone?

MUSINA-MAKHADO SEZ CLUSTERS

The Musina-Makhado SEZ is a flagship initiative of the Limpopo

• Metallurgy (Minerals Beneficiation)

Government. The Musina-Makhado MMSEZ The is a North flagship SEZ Site is initiative wholly a flagship owned of initiative the and Limpopo operated

of the

• Metallurgy (mineral beneficiation)

Provincial Government implemented through the Musina-Makhado • Energy Generation

by Limpopo Provincial the MMSEZ Provincial Government SOC. The Government South implemented Site is implemented operated through by through the through

MMSEZ the

• Energy generation

SEZ SOC in partnership with a Chinese Operator, Shenzhen Hoi

the SOC, Musina-Makhado partnership with SEZ with a SOC SEZ Chinese a Chinese MMSEZ partnership operator, Operator, SOC Shenzhen in with partnership Shenzhen a Chinese Hoi Mor

• Manufacturing

• Manufacturing

Resources Operator, with Hoi

Mor

Mor

Resources a Chinese Resources Holding Shenzhen

Holding Operator, Company Holding Hoi

Company

Mor Ltd.

Shenzhen Company Resources

Ltd. The Hoi Ltd. Holding

MMSEZ Mor Resources Company

as an economic

• Agro-processing

• Agro-Processing

Ltd. Holding development The MMSEZ Company tool is as aims an Ltd. economic to The promote MMSEZ tool development national that as aims an economic tool economic

promote aims growth to

• Logistics • Logistics

promote development national and exports economic national by tool using economic growth aims support to and promote growth measures exports and national in by exports order using economic to by support attract using targeted

support growth measures foreign and measures in domestic order exports to in attract by order investments, using to targeted attract support research foreign targeted measures and foreign development

domestic

in order and

MMSEZ INVESTMENT WHAT ARE THE INCENTIVES FOR

domestic to investments, (R&D) attract and investments, targeted technology research foreign and transfer. research development.

and and domestic development.

investments,

research and development.

Where is the MMSEZ located?

• • • Preferential INVESTING corporate IN THE tax MMSEZ?

Building • Preferential allowance corporate and tax tax

relief

Employment • Building tax allowance incentive

and tax relief

Investment The Musina-Makhado opportunities SEZ is located Investment in the vicinity of the Beit

• inside Bridge the Border zones:

zone: Post which is one opportunities of the busiest ports outside of entry in • SA

• and Industrial an undisputable infrastructure gateway to the zones:

zone: South African Development

• • Community Corporate offices (SADC) countries. The • MMSEZ Real estate has the potential to

• • become Logistics an services inland intermodal terminal, • Retail facilitated and hotels by its anchor

• • along Petroleum the North-South supply Corridor, • and Schools directly and connecting airport to the

• Customs-controlled • Employment tax area incentive

tax relief

Rental • Customs-controlled space discounts area tax relief

Readily • Rental available space infrastructure

discounts

Sufficient • Readily land available for greenfield infrastructure projects

Access • Sufficient to agricultural land for and greenfield mineral projects

resources

Easy access • Access to to the agricultural up-north & mineral (SADC) resources market

• country’s Industrial major chemicals ports through both • Health

N1 road and the Johannesburg-

• Accessible • Easy logistics access to support the up-north for the movement (SADC) market

of goods

Musina railway line, for the trans-shipment • Entertainment

of sea cargo and

• Accessible logistics support for the

• Musina Dam

manufactured goods to inland destinations and the SADC markets. movement of goods

POTENTIAL INVESTMENT OPPORTUNITIES IN AND OUTSIDE THE MMSEZ

ENERGY &

METALLURGY

Power Plant

Iron and

Steel Plant

Stainless Steel Plant

Ferromanganese Plant

Ferrochrome Plant

Chrome Plant

Lime Plant

AGRO-PROCESSING

Food Processing Facility

Fresh Produce Market

Canning Facility

Cotton Beneficiation

Timber Processing

LOGISTICS

Logistics Services

Warehousing

Distribution

Container Yard

Vehicle Distribution

Cold Storage

Bonded Warehouses

INFRASTRUCTURE

Construction Services

Engineering Services

Re al Estate

Development

Retail Property

Hospitality Facilities

Bu ilding Materials

Manufacturing

and Supply

MANUFACTURING

Light Industries

Basic Assembly

Automotive Assembly

Electromechanical Operations

Component Manufacturing

Fertilisers

Agro-chemicals

Petro-chemicals

ICT Solutions

Furniture Manufacturing

Packaging Services

CONTACTS

MS TSHAMAANO MAKUYA

MR RICHARD ZITHA

Contact MUSINA-MAKHADO details SEZ SOC

Ms Tshamaano Stakeholder Makuya,

Mr Richard Zitha, Project Executive

Executive

Relations Manager

Project Executive

Musina-Makhado Makhado SEZ SOC

Stakeholder Relations Manager

Cell: Investment +27 071 391 Promotion 391 8188

Address: 29 93 Market Biccard Street,

Street,

Cell: +27 067 Tel: 411 +27(0) 411 9192

15 295 5120

Email: Cell: +27 R.Zitha@mmsez.co.za

Tel: 71 +27(0) 391 8188 15 295 5120

Polokwane, Limpopo Polokwane,

Email: T.Makuya@mmsez.co.za

Cell: +27 (0)67 411 9192

Email: R.Zitha@mmsez.co.za

Cell: +27 (0)71 391 8188

Province, Limpopo RSA Province (RSA)

Tshamaano.Makuya@lieda.co.za

19 LIMPOPO Richard.Zitha@lieda.co.za

BUSINESS 2020/21

MUSINA MAKHADO

SMART CITY

A Smart City programme is envisaged for northern Limpopo Province, catalysed by the

development of the multi-sector Musina-Makhado Special Economic Zone.

A

new Smart City is taking shape in Limpopo Province. It

is catalysed by the economic stimulus of the Musina-

Makhado Special Economic Zone (MMSEZ). The new

Smart City will integrate the towns of Musina and

Makhado to become the pre-eminent trade and

industrial centre of Southern Africa.

The new Smart City will reignite the rich civilisational heritage

of the Great Mapungubwe, Thulamela and Zimbabwe Kingdoms

which at their height in 1000AD

produced artifacts in gold and traded

globally as far as Arabia, India and

China. This region will once again rise

and become a modernised industrial

and global trade hub, building on

its heritage and embracing the

technology revolution.

The geographic location of

the Smart City in the northern part of South Africa bordering

Zimbabwe and connecting into the rest of Africa gives it a critical

comparative advantage, together with the natural endowments

within the surrounds of Musina and Makhado which include

high-value agricultural land, mineral resources and functional

spatial relationships. If harnessed fully these will help to create a

competitive regional economy for South Africa and the continent.

“A leading innovative, sustainable and

inclusive high-tech Africa gateway city”

_________________

A leading innovative,

sustainable and inclusive

high-tech Africa gateway city

________________

The advantage of the MMSEZ is that it is part of a national economic

programme, located within the National Transformation Corridor that

links Gauteng with its dynamic economy to the Beitbridge Border Post,

one of the busiest ports in Africa.

The goal of the Smart City is transformational. People’s needs and

aspirations are at the centre of planning. The foundations are proper

sanitation and waste management, 24-hour electricity and water

supply, efficient mobility and public transport with a network of wellconnected

roads and access to reliable

and high-speed telecommunications.

The circular and green economy based

on reuse, recycle, share, low/zero-carbon

footprint meets with the concept of the

Smart City. The MMSEZ, working together

with all three spheres of government

and stakeholders, aims to develop the

designated MMSEZ as a catalytic driver for

a Smart City which is envisioned to be:

A leading innovative, sustainable and inclusive high-tech Africa

gateway city, driven by residents and visionary investment within

a prosperous rural-urban integrated region and operating as a

highly connected – freight/warehousing/ logistics/transport/retail/

manufacturing – industrial hub supporting the SEZ within a superefficient

Gauteng-Limpopo-Zimbabwe economic corridor.


26

Building the future together

Message from Dr Mofasi Lekota, MMSEZ Board Chairperson

The Board of Directors of Musina-Makhado Special Economic Zone (MMSEZ)

recognises and appreciates the immensity of the challenges and attractive

opportunities that come with the MMSEZ. We understand the mutual and

Antonvilla

interdependent relationship between a successful SEZ and our envisaged

Smart City. We also acknowledge that the long-term nature of this project

and its intergenerational characteristics require long-range planning

and short-term execution. It requires human and capital resources that

are committed in the long term and resilient enough to withstand the

turbulences inherent in these types of projects.

The core triangle of Beitbridge, Musina CBD and Antonvilla (Northern SEZ) will catalyse a region

A vision of the emergence of a Smart City in the land between Musina

This core triangle will catalyse a region of

of smartness smartness and and development development with upgrades with upgrades to roads and connectivity that will create the

and Makhado energises the directors and staff of the MMSEZ company to

to roads and connectivity that will make the

Musina-Makhado corridor.

perform to the best of their abilities from day to day and from year to year. It

Musina-Makhado corridor

MMSEZ SMART CITY

is this vision that shines a light on our path to build a platform from which

6

the next generation will derive optimal economic benefits. We continue the

As a long-term developmental approach, this will result in relentless pursuit of this vision, while keeping our promise to do all we can to

a transformed, competitive and spatially integrated regional maintain an environment that our children and their children will happily

economy and this will lead to the upliftment and well-being inherit from us. What will emerge between these two northern-most towns

of people living in Vhembe, its neighbouring districts and the of Limpopo province is a Smart City that will offer endless opportunities for all

Province of Limpopo at large.

our people. It is a Smart City that will offer business, job, skill development and

The development of the Smart City starts with the Northern entertainment opportunities for the people of the Vhembe region, Limpopo

SEZ Site of the MMSEZ as a smart precinct, SMART together with PRECINCT

the Province and the nation. This will be a Smart City we will all be proud of.

upgrading of the Beitbridge border post and the town of Musina

to become an integrated The Northern core Site of of the the new MMSEZ Smart in Antonvilla City. This will core be the first

triangle will catalyse smart a region precinct of in smartness the and city that development will improve with the economy

and create jobs.

upgrades to roads and connectivity that will make the Musina-

• A green industrial estate where one can live, work, play.

Makhado corridor the fastest-developing area in Limpopo, South

• Investments into light manufacturing, retail, trade, freight and logistics warehousing, and

Africa and Southern agro-processing Africa. will be sought.

• Innovation and incubation of new businesses to work on latest technology in electronics

and other industries will be promoted.

• The buildings and management of the precinct will use solar energy and conversion of

THE MODEL

waste to energy to ensure sustainability.

Key:

The Smart City Model will be implemented incrementally:

1 Beitbridge border

• First step: integrate the Northern Site of the MMSEZ, the

2 Musina CBD

Beitbridge border and the Musina town to form the Smart City.

3 Antonvilla

• Second step: upgrade the N1 between Makhado and Beitbridge

(Northern SEZ)

as part of the Smart City Corridor.

• Third step: promote strategic developments along the N1

Musina-Makhado Smart City corridor.

• Fourth step: renew and regenerate the towns of Musina and

Makhado.

• Fifth step: implement the corridors, ensuring connectivity to

villages and promote agriculture and tourism, activating the

The Northern Site of the MMSEZ in Antonvilla will be the first smart precinct in the

Smart Region.

Smart City that will improve the economy and create jobs. A green industrial estate

• Parallel steps: development of roads for connectivity; work

where one can live, work, play. Investments into light manufacturing, retail, trade,

on telecommunication coverage; training of communities to

freight and logistics, warehousing and agro-processing will be sought. Innovation

16 MMSEZ SMART CITY

use technology in partnership with the institutions of higher

and incubation of new businesses to work on latest technology in electronics and

learning and through schools; building awareness on zero waste

other industries will be promoted. The buildings and management of the precinct

and low-carbon living. The work on the metallurgy complex at

will use solar energy and conversion of waste to energy to ensure sustainability.

the Southern SEZ site will also be undertaken in parallel.

A vibrant partnership with the University of Venda in co-creating

the Smart City was launched on 16 September 2021, when the model Contact Details:

was unveiled. The next step will be to develop the supply of skills Mr Livhuwani Muligwe: MMSEZ Smart City Model Project Manager

needed for a Smart City and the ongoing operation of the SEZ. Tel: +27 66 174 0798 | 93 Biccard Street, Polokwane, Limpopo Province, RSA


FOCUS

To reignite the birthplace of

industrialisation in South Africa

The Vaal Special Economic Zone (Vaal SEZ) is intended as a catalytic project to

boost economic growth and create jobs in the Vaal region.

Lesedi

Heidelberg is the seat of the

municipality. Emfuleni in the west is

home to the towns synonymous with

steel, Vanderbijlpark and Vereeniging

and the Sasol Petrochemical complex

to the south of Sedibeng in the Free

State Province.

The Sedibeng District, host of the proposed Vaal SEZ, comprises three

local municipalities and is strategically located both in terms of highways

and railways and in relation to three economically-powerful

metropolitan municipalities, Johannesburg, Ekurhuleni and Tshwane.

A

considerable amount of planning has

already gone into the concept which ties

in to development goals and frameworks

at local, regional and national level.

The area

The three local municipalities which make up the

Sedibeng District Municipality are predominantly rural.

Midvaal is the most rural of the three local municipalities,

with urban development concentrated along routes

R59 and R82 in the north-western parts of the municipal

area. Midvaal has strong regional linkages to major

economic cores.

Lesedi is also primarily rural, with the major urban

concentration located in Heidelberg/Ratanda nodes,

along the N3 freeway at its intersection with Provincial

Route R42, east of the Suikerbosrand Nature Reserve.

Vision

By 2030, an industrialised, globally

competitive, export-driven regional

economy.

Mission

Our Mission is our tagline: To Reignite the

Birthplace of Industrialisation in South Africa.

Key outcomes

• The Vaal SEZ will leverage existing assets and

infrastructure

• It will pursue opportunities in the green economy,

decarbonisation, hydrogen and net-zero emission sectors

• To become the go-to investment destination

• To be a multi-tier (multiple sites, multiple sectors),

anchor SEZ hub, spatially dispersed within the region

• To achieve a seamless, integrated, socially-cohesive

society, with sustained economic growth and quality

jobs for the people of the Vaal region.

Process

The Vaal SEZ Master Plan was completed at the

end of June 2022. Site analyses of secured sites has

been completed.

A pipeline of firm investment commitments is being

established. Township establishment processes will

be initiated for land parcels to service current highpriority

investors.

The SEZ designation application will be submitted

by the end of October 2022.


28

FOCUS

INVESTOR VALUE PROPOSITION

Enabling framework

Strong government support, robust legal and

regulatory framework.

Strong commercial and significant economic and

social returns, including incentives and rebates.

Locational benefit

South Africa’s economic hub, sound logistics

networks and infrastructure.

Infrastructure services

One-stop shop services and the Vaal SEZ’s Shared

Services and investor access to serviced land and

funding options.

Management capability

Independent management body, cooperation

between dedicated bodies, local, regional and

national government.

Logistics

Sedibeng District Municipality is traversed by

extensive national and provincial major railway and

road mobility infrastructure:

Route N1: the major national north/south freeway

linking Musina at the northern border of South

Africa to Cape Town in the south

Route N3: the major transport link between

Gauteng Province and eThekwini, passes through

Sedibeng District’s Lesedi Municipality

Route N17: the main link between Johannesburg,

Secunda, eSwatini and the Richards Bay harbour

Route R103: the old Johannesburg-Durban road

runs parallel to Route N3

LESEDI

Two land parcels earmarked by the municipality

for SEZ development (one of 20ha and another

of 149ha). Access to the N3 to allow good

connections to Johannesburg and KwaZulu-

Natal. Three-way collaboration between the

Municipality, MTP Aviation Solutions and the Vaal

SEZ to widen the SEZ area to include parts of the

Heidelberg Aerodrome.

MIDVAAL

Land has been secured adjacent to the Klipriver

Business Park (500ha) with access to the R59 via

the R550. Also, 100ha secured next to SA Steel

Mill off the Pierneef Road offramp, as well as 9ha

in DeDeur, zoned for agricultural purposes and

earmarked for agro-procressing. Council has

approved the land classification.

EMFULENI

The Emfuleni Local

Municipality Council has

resolved to make two

adjoining land parcels

available, totalling 697ha.

The site is bordered

by the N1 highway

and is close to the

ArcelorMittal factory. This

site is also earmarked

for the development

of a Hydrogen Valley

Concept.


FOCUS

Multi-site Special Economic

Zone will be game-changer

Vaal SEZ aims to build on region’s strengths to create

sustainable businesses

The Vaal SEZ is to be created within the Sedibeng

District Municipality, which already has several attractive

assets for would-be investors:

• An existing manufacturing base (eg, Heineken,

ArcelorMittal, SASOL, SA Steel Mills) and a history of

industrial activity

• Agricultural land available for development

• affordable industrial and commercial land earmarked

for development

• Vaal River, tourism

• Vaal Dam, tourism

• Existing university and graduates

• Young population with huge potential

• Skilled artisans

• Excellent rail and road connections

• Proximity to three of South Africa’s largest

metropolitan markets, namely Johannesburg,

Ekurhuleni and Tshwane

The Vaal region is a historic cluster

of capital-intensive and heavilyindustrialised

manufacturing which was

underpinned by a globally-competitive

mining and iron and steel sector.

These experienced a marked decline from the

1990s, but plans are underway to revive the region,

using the tried and tested method of creating a

Special Economic Zone (SEZ) as a hub for business

activity. Where the Vaal SEZ is unique is that

various satellite hubs will work out from a central

hub like spokes in a wheel, thus exploiting the

existing strengths of particular sites and spreading

economic benefits across the area more widely.

Regenerate the Vaal area and support economic activity

The Vaal region presents a compellingly unique

value proposition of a thriving regional value-adding

industrial economy which effectively leverages

its comparative locational attributes and resource

endowments. In addition to spearheading the revival

of the existing industrial manufacturing base, it will also

facilitate the creation of new growth and differentiation

opportunities which include low-carbon manufacturing,

energy, agriculture and agro-processing.

Despite the ongoing challenges that have faced Vaal

businesses over the years, it has been found that existing

businesses have continued to support communities

and explore ways to be more sustainable. Significant

investment continues to be made by existing businesses

and this bodes well for how the region is viewed by its

residents – a vote for the future.


30

FOCUS

Cannabis

• The cannabis economy is projected to grow quickly.

• Available land

• Land is available for future development.

• Land is affordable

Low-carbon economy clusters

• Solar and battery storage

• The circular economy

• Biomass

• Carbon capture

• The hydrogen economy: aim to be South Africa’s

preeminent hub for the hydrogen economy

Agro-processing

Investment as transformation

There is a strong case for investors to join

and benefit from a green energy-fuelled reindustrialisation

of the Vaal region. This will

transform this industrial basin into the country’s

preeminent hub for low-carbon manufacturing

and renewable energy production.

The Vaal SEZ is connected to other national

and provincial initiatives in Gauteng. This

regional development aims to create linkages

and the integration of the host province’s growth

strategies with the local economic development

strategies of the host municipalities to national

economic initiatives.

Targeted investment strategy

• High-impact investments into the food,

agriculture and agro-industries value chain

• Investment in gateway logistics (air, road, rail,

river) to exploit the locational advantages of

the Sedibeng District

• Investment in the Blue Economy and the

Tourism Sector using the advantages of the

Vaal River

• Building a Smart City along the Vaal River to

enable SEZ development and to drive urban

regeneration

• Building strong local linkages between

township/rural economies with the value chains

that the Vaal SEZ will develop and strengthen

• Food, beverages, agro-processing and agribusiness

• Agro-processing – plant products and value chains

• Agro-processing – livestock and value chains

Logistics

Mark Stebnicki on Pexels

• Warehousing and storage – packaging

• Expansion of gateway logistics and infrastructure

• Logistics – exploiting locational advantages

Skills development and training

• Formalised relationship with tertiary educational

institutions

• Development with a purpose

• Pool of skilled resources for industry

• Training for future skills

Light manufacturing and infrastructure

• Maintenance of existing assets

• Creating new and sustainable infrastructure to

support targeted industrial activities

• The Vaal Dam is a significant asset


FOCUS

Invest in the Free State

Excellent location, resources and incentives combine to make South Africa’s most

central province an attractive investment proposition for businesses of all sorts.

Situated in the heart of South Africa and

sharing borders with Lesotho and six

other provinces, the Free State’s location

provides easy access to the main ports

of Durban, East London and Gqeberha and is

therefore ideal for logistics, manufacturing and

agro-processing operations.

The main economic sectors are agriculture,

mining and manufacturing. The concentration of

large chemical companies in the town of Sasolburg

is testimony to the influence of global chemicals and

energy company Sasol.

Companies relocating not only enjoy the

opportunity to source inputs at competitive

prices, but also to benefit from domestic,

regional and international markets for their

products and services.

There are industrial parks and a Special

Economic Zone (SEZ) that are supported by the

Department of Trade, Industry and Competition.

Industrial parks are situated in Maluti-A-Phofung,

Botshabelo and Thaba Nchu.

The Free State’s strengths for inward investment

are boosted by:

• openness to business, trade and investment

• abundance of natural resources

• low factory rentals

• Africa’s leading telecommunications network

• incentive packages uniquely developed for

Special Economic Zones and industrial parks

• Free State Development Corporation (FDC)

support services for priority sectors such as

agro-processing and manufacturing

• a large labour pool

• diverse cultures

• competitive land and building costs.

Select investment opportunities include:

agriculture and agro-processing; tourism and

property development; medical and pharmaceutical

production and distribution; manufacturing; renewable

and clean energy and medical tourism.

FREE STATE DEVELOPMENT CORPORATION

The Free State Development Corporation (FDC)

contributes to the Free State’s economic development

through four service delivery pillars: SMME/co-operative

funding and support; export-related services; property

management; investor services.

FDC services to investors and business include:

• Project appraisal and packaging.

• Promotion and facilitation of investment projects

and facilitation of access to finance.

• Providing access to business and government networks

and assistance with business retention and expansion.

• Information on statutory requirements, investment

advice and assistance with investment incentive

applications and business permits.

• • Assisting with the development of local and international

markets and facilitating joint ventures/equity

partnerships through identification of local partners.

FDC property management

The FDC ovesees 253 commercial properties and 290

industrial sites, which it uses to:

• Facilitate commercial and industrial activity

• Assist new investors looking for suitable premises

• Facilitate SMME development, particularly in rural areas

The substantial property portfolio makes FDC one

of the biggest property owners in the province with

industrial, residential and commercial properties in excess

of 900 000m² situated in the Mangaung Metro and Thabo

Mafutsanyana District.

FDC industrial properties are located in

• Thaba Nchu

• Botshabelo

• Industriqwa – Harrismith

• Phuthadithjaba


32

LIMPOPOBUSINESS.CO.ZA

EESTATEBUSINESS.CO.ZA

ONLINE JOIN ONLINE JOIN ONLINE

ONLINEWWW.GLOBALAFRICANETWORK.COM | WWW.FREESTATEBUSINESS.CO.ZA

| WWW.LIMPOPOBUSINESS.CO.ZA

| | The Botshabelo Industrial Park is situated approximately

60km from the economic hub on the eastern side of the

Mangaung Metro.

Maluti-A-Phofung Special Economic Zone

The main objective of the MAP SEZ is to attract

foreign and direct investment and to stimulate the

local economy as well as to create meaningful work

opportunities for people of the Free State as a whole

and in particular the Maluti-A-Phofung region.

The MAP SEZ is nestled on 1 038ha of land which

is divided into four precincts that include the crossdocking

and container-terminal precincts. The MAP

SEZ is a multi-sector processing, manufacturing,

engineering, logistics services and transport complex,

serving the needs of the upstream value-adding,

beneficiation, processing and production service

companies operating across sectors and geographic

areas in Southern Africa.

A number of incentives are available to ensure MAP

SEZ’s growth, revenue generation and international

competitiveness. These incentives include:

• 15% corporate tax instead of 28% corporate tax

• Building allowance tax

• Employment incentive tax

Contact details for investors:

Free State Development Corporation

Tel: +27 51 4000 800

Emails: wecare@fdc.co.za | invest@fdc.co.za

Website: www.fdc.co.za

Free State Province Free State Province

Center yourself in the Center heart yourself of South in Africa the heart of South Africa

Free State Province Free State Province

Center yourself in the Center heart yourself of South in Africa the heart of South Africa

FOCUS

Tourism investment

From the impressive rock formations of the Golden Gate

Highlands National Park to the country’s biggest dam,

Gariep Dam, with cultural, historical and adventure

experiences in between, the Free State caters to every

tourist’s taste.

There are also multiple investment opportunities.

The Free State Gambling, Liquor and Tourism Authority

(FSGLTA) is doubling up on efforts to attract international

tourists and to create new markets domestically through

programmes such as “Travelling Differently”.

Tourism infrastructure is being enhanced and new

skills taught to prospective employees in the sector.

Bloemfontein’s newest investment is the R95-million

Premier Splendid Inn.

All of the major hotel brands have a presence in the

Free State. Protea Hotels has properties in Bloemfontein,

Harrismith and the popular resort town of Clarens while

Sun International, the Tsogo Group and City Lodge are

well represented. ■

MESSAGE FOR INVESTORS

MEC for Economic, Small

Business Development, Tourism

and Environmental Affairs, the

Honourable MP Mohale, has been

supportive of various publications

designed to attract investment to

the province. In addition, he notes:

While investment is an essential

ingredient to economic growth,

it should be pointed out

that at the centre of the Free

State government’s economic

development strategy, as well as the Value Chains Economic

Transformation Approach, is human capital formation and

development through universities and colleges, and various

institutions pursuing innovation and offering proof-ofconcept

services, to name a few. The Free State is poised to

become a laboratory for excellence in education outcomes,

research and innovation, particularly in the fields of health,

agriculture, agro-processing, manufacturing, water

management, ICT, pharmaceuticals and rural development.

Domestic and potential investors from around the world

are welcome to contact the DESTEA Head of Department

at: HoD_office@destea.gov.za.


The Northern Cape is

attracting new-age investments

Limitless renewable-energy resources, a new port, a Special Economic

Zone and green-hydrogen investments make the province the ideal

destination for forward-thinkers.

The Northern Cape is now – and

will in the future – be the best

global investment destination for

investors in mining, agriculture

or energy. These are the primary sectors.

However, there is the added benefit

for the province and for investors of

renewable energy being scaled up across

the province. This puts the Northern

Cape in a good position to have an aggressive

industrialisation agenda.

To this end, the 2022/23 financial year began with

a positive start as the Northern Cape recorded the

lowest unemployment rates in the country together

with an improved GDP figure of R130-billion, up from

R98-billion in 2019. The key drivers for the Northern

Cape’s sterling performance were investments in

the mining and energy sectors. These were made

possible through good governance and investment

facilitation on top of a good resource base.

The Northern Cape is a key contributor towards

South Africa’s Just Energy Transition (JET). The

Northern Cape Provincial Government, in line with

the Green Hydrogen Strategy that was launched in

November 2021 at COP26 in Glasgow, has initiated

pre-feasibility studies that are championed by its

strategic partner and anchor investor, Sasol.

Since the introduction of the national

Renewable Energy Independent Power Producer

Procurement Programme (REIPPPP), the Northern

Cape has attracted a disproportionate percentage

of solar and wind projects, worth billions of rands to

the local and national economy.

The advent of the green-hydrogen economy

has given the Northern Cape the opportunity to hold

a key position in this new field as a contributor to

country’s green economy. This is enabled by the natural

endowments that are available in the province.

The South African response and offer to the global

village is well articulated via the South African Green

Hydrogen Roadmap that is based on the following

tangible references that provide a first-class competitive

advantage:

• A well-developed strategy and an existing

regulatory and implementation structure that has

been developed since 2007

• Having the world’s largest grey-hydrogen producer

in the world, Sasol, as the lead investor

• The REIPPPP that has been in existence for more than

10 years, generating more than 5GW of electricity

The Northern Cape has exceptional renewable energy

resources. As the biggest South African province by

land mass, the province is sparsely populated, has little

alternate use for the land and has an uncomplicated

topography. Collectively, this amounts to an exceedingly

supportive environment for renewable-energy

generation and green-hydrogen development.

The renewable energy capacity of the Northern

Cape is more than sufficient for what South Africa


34

Credit: Pexels

would require based on its projections, but farreaching

consideration is being given as to how the

renewable capacity is developed and scaled up.

BOEGOEBAAI PORT

The significant support the Boegoebaai project is

receiving from both the public and private sectors

is highlighting its promise.

Ultimately, an extensive value chain for

investment exists, ranging from desalination and

electrolyser production, the renewable energy

resource required, grid capacity, auxiliary services

and ultimately the possibly of manufacturing

opportunities for the industry and value addition to

local mineral resources.

Part of the feasibility study, Sasol’s final master

plan report, will be made public and this will entail

more elaborate detail about the value chain. A

green-hydrogen-specific Special Economic Zone (SEZ) is

envisaged to host the extensive value chain that stems

from the production of green hydrogen. The site will

be 30 000ha in extent. This will be the world’s leading

investment destination for green hydrogen within a

green SEZ.

In addition, the existing mining, agriculture, transport and

energy sectors need to be transitioned and incorporated into

this JET-driven Northern Cape Green Hydrogen Strategy. For

the future, plans must be made for heavy-hauling trucks in

the mines and on roads and for green-hydrogen fuelling

stations and the like. The array of investment potential within

this green economy does not conclude here, though. A

range of other demands must be provided for, including

extensive developments, infrastructure, logistics and the

demand for human capital. Investors are urged to opt in

and to secure for themselves a slot in this prime, once-in-alifetime

investment opportunity.

CONTACTS

Riaan Warie

Director: Trade & Investment

Promotion

Northern Cape Department of

Economic Development and

Tourism

Tel: +27 (0)87 310 7683

Fax: +27 (0)53 831 3668

Cell: +27 (0)79 877 2828

Email: RWarie@ncpg.gov.za/

warieriaan@gmail.com

Hendrik Louw

Acting CEO

NCEDA

Tel: +27 (0)53 802 1638

Cell:+27 (0)60 997 7222

Email: hlouw@nceda.co.za

FOCUS

Newlyn’s First-in-World Bulk Minerals

Storage Solution

Proposed back-of-port manganese terminal in Ngqura

Newlyn is a home-grown company that has invested and continues to invest in long term

capital intensive transformational infrastructure in South Africa. We believe in the economic

promises potential near-zero of the country and dust don’t have any emissions investments outside and South Africa. high Our future efficiency

is

inextricably linked to and fully aligned with the success of SA Incorporated. We proactively

contribute to the success of our country by investing for the long term, securing leading

global supply chain technology, facilitating technology and skills transfer to South Africa, to

raise the standards across the entire bulk materials logistics supply chain ecosystem. In so

doing, we have demonstrated that we contribute to meaningful socio-economic development

in all the regions in which Newlyn operates.

Contact us:

031 313 6500

Firdhose Coovadia

firdhosec@newlyngroup.com

The future of sustainable, operationally-efficient

Sagie Chetty

mineral export logistics sagiec@newlyngroup.com

https://newlyngroup.com

ESG and Supply Chain Optimisation

• Near zero dust emissions

• Rapid unloading of trains (6,500tph)

• High speed shiploading of up to 10,000 tph

• Vessel turnaround sub 20 hours

• No product degradation

• Catalyst for jobs and economic development

• Common User Infrastructure: market access

for emerging miners

• Significant financial benefits to miners,

Transnet and the fiscus

CONSTRUCTION & COMMISSIONING – 2 YEARS

As part of its vision to deliver continuous

innovation in offering sustainable and

efficient logistics solutions to its clients,

Newlyn has, together with global

OEMs Eurosilo and Bruks Siwertell, developed

proprietary technology for what will become

the world’s first near-zero dust emissions mineral

ore back-of-port export terminal with superior

operating efficiencies.

Open stockpiling of manganese in the Port

of Port Elizabeth and in back-of-port facilities in

Markman and Ngqura has created significant

issues. Apart from the serious public health and

environmental concerns, the enormous impact of

these increased volumes on the region’s already

burdened infrastructure, roads, traffic, tourism and

ecosystems is immeasurable. It has, for example,

resulted in expensive and inefficient watering to

reduce dust storms over the popular Kings Beach,

smart spaces. transformational infrastructure

while also stymieing attempts to create a touristfriendly

waterfront around the small boats harbour

within the port.

Transnet intends moving the manganese

bulk export terminal to the Port of Ngqura within

the Coega SEZ, 20km to the north of the city of

Gqeberha. Newlyn’s proposed back-of-port solution

for manganese in Coega will perfectly dovetail with

Transnet’s proposed plans. It will serve to accelerate

the relocation of manganese exports from

Gqeberha to Ngqura and is designed to augment

Transnet’s proposed manganese export terminal in

Ngqura to ensure a sustainable solution is offered to

the manganese miners.

Back of Port Manganese

Terminal – Ngqura

Closed design

The Newlyn design for The the future back-of-port sustainable storage

and handling of mineral operationally ore is entirely efficient closed export to the logistics

environment, hence near-zero dust emissions and

associated product losses.

The efficient design involves rapid unloading of

the train and movement of manganese via piped

conveyor to specialised silos which are equipped

with mechanical systems for soft handling of ore.

Thereafter, ore is accurately discharged from the

silos via pipe conveyors to the ship-loaders at a

loading rate of up to 10 000 tons per hour. As a result,

ship-loading can be achieved in less than a day

compared to the current 5-6 days. This significantly

reduces demurrage for miners, improves train

turnaround times and most importantly will serve

to debottleneck the existing heavy-haul rail line from

the Northern Cape. Incremental rail capacity created

by the system can be made available to emerging

miners currently unable to secure sufficient rail

export allocations for manganese.

The Newlyn design is first-in-the-world for

export of mineral ore and has a footprint of one

third of conventional back-of-port storage.


36

Meeting national objectives

Simulation models have demonstrated that

Newlyn’s project can coexist with Transnet’s planned

manganese export terminal, to ensure that export

logistics infrastructure can meet the forecasted

export potential from South African miners.

The project will address several objectives in

the national strategic and economic interest of

South Africa including:

• Cargo migration from road to rail;

• Technology and skills transfer of the best available

global technology;

• Private sector participation in infrastructure

development;

• Enabling market access for emerging manganese

miners;

• Stimulating regional and provincial socio-economic

development; and

Bayhead multi-modal rail facility is the

largest of its kind in Africa

• Delivering environmentally sustainable solutions

to communities.

The project has received overwhelming support

from manganese miners and environmental NGOs.

Newlyn is planning a similar project in Saldanha to

address environmental challenges and efficiencies

associated with iron ore and manganese back-ofport

operations there. ■

About the Newlyn Group

Developers of transformational logistics and storage infrastructure

The Newlyn Group was established in 1996 to

engage in opportunities for black participation

within the port logistics sector, a sector which

previously excluded people of colour.

Initially, Newlyn targeted potentially prime

industrial properties and created value by

rejuvenating ageing infrastructure.

Today, Newlyn is a leading private developer

of land close to or within port precincts along

strategic high-value/volume trade corridors.

Newlyn adopts an innovative design approach

transforming these land parcels into highlyefficient

logistics facilities that offer bespoke

solutions to leading multinational and

national clients. Newlyn’s tried and trusted

design approach and in-house construction

capabilities and equipment ensures a bespoke

solution that enhances our clients’ businesses.

Newlyn’s growth is driven by a highly credible

team of experts with over 150 years of cumulative

experience at the highest level. Newlyn is a proudly

South African, homegrown Level One BBBEE entity

committed to investing in South Africa for the

long term. The Newlyn Group’s current developed

portfolio includes 26 properties in three provinces

with a GLA of c. 1 300 000 square metres and a

land bank of c. 1 700 000 square metres. Newlyn’s

portfolio includes some of the most sophisticated

storage facilities on the continent with landmark

developments including Africa’s largest multimodal

rail terminal in Bayhead, Durban, a specialised

sulphur import facility in Richards Bay and a stateof-the-art

chemicals storage facility in Durban.

Newlyn’s macro vision is to make South African

businesses more competitive by reducing the cost

of logistics through the development of more

efficient and environmentally sustainable logistics

infrastructure solutions. ■

Contact details:

Tel: +27 31 313 6500

Firdhose Coovadia: Chief Value Officer | firdhosec@newlyngroup.com

Sagie Chetty: Group Engineer | sagiec@newlyngroup.com

Website: https://newlyngroup.com

INTERVIEW

Newlyn is a home-grown company that has invested and continues to invest in long term

capital intensive transformational infrastructure in South Africa. We believe in the economic

potential of the country and don’t have any investments outside South Africa. Our future is

inextricably linked to and fully aligned with the success of SA Incorporated. We proactively

Going

contribute

beyond

to the success of our country by investing

the

for the long term, securing leading

global supply chain technology, facilitating technology and skills transfer to South Africa, to

raise the standards across the entire bulk materials logistics supply chain ecosystem. In so

doing, we have demonstrated that we contribute to meaningful socio-economic development

in all the regions in which Newlyn operates.

conventional to achieve the exceptional

CEO and founder Raj Balmakhun ESG and Supply explains Chain Optimisation how the Newlyn Group’s bespoke and

innovative solutions are aligned • Near zero dust with emissionsthe growth and development of South Africa

Contact us:

031 313 6500

Firdhose Coovadia

firdhosec@newlyngroup.com

Sagie Chetty

sagiec@newlyngroup.com

Newlyn CEO and founder,

Raj Balmakhun

https://newlyngroup.com

• Rapid unloading of trains (6,500tph)

• High speed shiploading of up to 10,000 tph

• Vessel turnaround sub 20 hours

• No product degradation

• Catalyst for jobs and economic development

• Common User Infrastructure: market access

for emerging miners

• Significant financial benefits to miners,

Transnet and the fiscus

smart spaces. transformational infrastructure

What is the mission of Newlyn?

We are proudly South African and Afri-optimists. While our country has

many challenges and complexities, this spawns innovative solutions.

The cost of logistics significantly impacts the competitiveness of an

economy. Our mission is to make South African businesses more

competitive by developing innovative logistics storage infrastructure

focused on greater efficiencies anchored in sustainable design,

construction and operations. We fully subscribe Back of to Port the spirit Manganese of Ubuntu,

“I am because you are”. This guides our Terminal value system – Ngqura and we believe in

making a difference socially as well as

The

economically.

future of sustainable

operationally efficient export logistics

When was the company established?

The Newlyn Group was established in 1996 to engage in opportunities

for black participation within the Port Logistics sector, a sector which

previously precluded people of colour.

CONSTRUCTION & COMMISSIONING – 2 YEARS

BIOGRAPHY

Raj began his career practicing

law, but he has always been an

entrepreneur at heart. This led him to

founding the Newlyn Group in 1996.

Under his stewardship Newlyn has

become a leading private developer

of transformational logistics storage

infrastructure and the group is

synonymous with innovation, speed

of execution and world-class quality.

Raj is the visionary and dealmaker

for the Group. He is a firm advocate

of social entrepreneurship, which

aims to uplift the communities

within which Newlyn operates.

To what do you ascribe the growth the company has enjoyed?

Dogged perseverance, speed of decision making and implementation

as well putting clients first. Whilst we have faced many challenges,

including the formidable disadvantage of starting from a zero capital

base, we remain committed to the logistics investment theme in and

around ports and major trade corridors and focus on delivering a topquality

logistics solution to our clients.

How do you define “bespoke storage and logistical solutions”?

One of my core principles is “you cannot do the conventional

and expect the exceptional”. Our design approach addresses the

logistical issues common to traditional warehousing including

inter-modal optionality, truck reticulation and optimum stacking

densities. These specifications differ from client to client depending

on the type of product being handled in the facility, how product

is received or special regulatory requirements. Examples are our

sulphur storage facility in Richards Bay and the Ashgate Chemical

Storage facility in Durban.

How do you see your company’s mission as linked to the success

of South Africa Inc?

South Africa has a development problem. We desperately need


38

investment in infrastructure, but these are long

gestation investments that will underpin a

sustainable economy for decades to come. We

believe we cannot leave it to government – we

as business have to be part of the solution. Our

projects speak to capacity building, technology

and skills transfer, community engagement and

upliftment, innovation and long-term investment.

We are ready to collaborate with government,

with communities and with our clients to

deliver transformational infrastructure projects

that address national objectives including the

migration of cargo from road to rail, environmental

sustainability, job creation and fixed capital

investment. The work we do needs to be judged

by its criticality to the economy – for example our

PX development in Durban or the planned Coega

back-of-port manganese development unlock

value in the mining sector, a major contributor to

the South African economy.

What is Newlyn doing in terms of running

sustainable operations?

The Newlyn Group is committed to “leaving the

planet in better health than we found it”. We

will deliver our projects in a sustainable manner,

by systematically reducing our environmental

impact and improving the quality of life for

communities. Newlyn projects are designed to

reduce water consumption and carbon footprint.

We deploy translucent sheeting in warehouse

design to maximise natural light, we use LED

lighting in all new builds and we deploy sisalation

to enhance cooling.

Nowhere is our commitment to sustainability

more evident than our joint development, with

two global OEMs, of near-zero dust emission

mineral storage and handling solutions for

manganese and iron ore. The first such project

is currently under development in the Coega

Special Economic Zone. The global engineering

firm undertaking the EPCM work on our behalf

has hailed the solution as a global game changer

in sustainable, operationally-efficient bulk

mineral storage.

In addition, Newlyn has invested in its own

internationally experienced energy team which

has developed proprietary process technology

Silo-based; manganese back-of-port facility

planned for Port of Ngqura

that results in a lower cost of electricity

generation coupled with significantly lower CO2

and NOx emissions.

Is Newlyn exploring power generation projects?

We are leveraging our substantial rooftop space

to generate solar power where we act as the

promoter and developer. For example, our roof at

the PX project in Durban is capable of generating

30MW of solar power, sufficient to meet our

clients’ needs but also ensure the entire Durban

port can been powered by green energy. In

addition, we have an EIA-approved land parcel

for a gas to power project which we intend to

develop as part of a consortium led by a Tier 1

power block developer.

What is the Boegoeibaai project?

The proposed Boegoebaai Port with dedicated

new rail connectivity to the mines of the Northern

Cape is an exciting project which speaks to

government’s objectives to migrate road to rail,

optimise cargo distribution, reduce dependency

on single ports and facilitate access to export

markets for emerging miners. The development

of this port is also key to unlocking South Africa’s

immense green hydrogen potential and further

paves the way for in-country mineral beneficiation.

It will also result in great job creation and billions

of dollars of fixed-capital investment.

Newlyn has teamed up with an international

consortium with global credentials in port and

rail infrastructure development, to pre-qualify as

a potential developer of the Boegoebaai Project.

This collaboration is an example of another one

of our core principles – harnessing the power of

collective effort and collective intellect. ■

39


KEY SECTORS

Overviews of the main economic

sectors of South Africa

Agriculture 42

Mining 46

Energy 52

Oil and gas 56

Water 62

Engineering 64

Manufacturing 66

Construction and property 69

Transport and logistics 70

Tourism 72

ICT 74

Banking and finance 75

Development finance and

SMME development 76

Education and training 78

A giraffe in the Pilanesberg National Park in North West Province has a close look at how giraffes have

been depicted on a passing hot-air balloon. Credit: Sun International

OVERVIEW

Agriculture

Citrus exports have finally made it to China.

SECTOR INSIGHT

Agriculture employs about

844 000 people.

The first consignment of Eastern Cape lemons destined for China is

given a last inspection at Maydon Wharf Fruit Terminal in Durban.

Credit: Citrus Growers’ Association of Southern Africa

National citrus exports have grown by more than 40% in

the past decade to about R20-billion per year. The Citrus

Growers’ Association of Southern Africa forecasts an

increase from the current 150-million 15kg cartons to

200-million in the next five years, and this is projected to grow

still further to 255-million by 2030.

February 2022 marked an important milestone for the citrus industry

because it was in that month that a first shipment of lemons was loaded

onto ships from the fruit terminal in Durban harbour en route to China.

The long and complicated procedure of becoming compliant

with health and import procedures started with work done by Citrus

Research International (CRI) scientists in 2013. CRI and the National

Department Agriculture, Land Reform and Rural Development

hosted scientists from China in 2015 and negotiations have

continued ever since.

South African citrus growers spend R150-million annually on

research which is then used by the DALRRD in their international

negotiations. In this case, it paid off with a R325-million deal which

has the potential to grow exponentially. South Africa hopes to eclipse

Argentina and Chile as suppliers of lemons to China, targeting 25 000

tons of lemons to that country by 2024.

Exports of grapefruit, oranges

and soft citrus to China totalled

130 000 tons in 2020. More good

news from South-East Asia came

in the form of a first consignment

of citrus fruit being accepted into

the Philippines.

The citrus industry has

been identified in the National

Development Plan as a priority

sector because it employs many

people and it can improve the

country’s balance of payments.

South Africa is the world’s

second-largest exporter of

citrus fruit. A national export

record was achieved in 2020,

with 146-million cartons of fresh

citrus being exported (second

only to Spain). The CGA’s Grower

Development Company has

pledged to invest R141-million

to empower growers struggling

to break even between 2021

and 2024 through its Enterprise

Development Grant Fund.

This year, R40-million was

allocated to 72 recipients

across the country to mostly

help with the procurement

of key production inputs,

including fertiliser and other

agrochemicals. There are many

opportunities in Africa for

exports of fruits which do not

quite match EU standards but

which are nonetheless perfectly

good products.


42

OVERVIEW

International pressures

Agriculture, forestry and fishing made good progress in terms of

GDP growth for two years. The fourth quarter of 2021 showed 12.2%

growth and the year-on-year figure for 2020 was 13.4%, followed in

2021 by 8.3%.

The soybean harvest in 2020/21 was the country’s best ever, and

maize had its second-best harvest on record.

But the hope that post-Covid would result in even better results

has not come to pass. Unusually heavy rains, the Russian invasion

of Ukraine, the bad performance of the railways and ports in terms

of exporting South African produce and Eskom’s inability to supply

a reliable stream of electricity, are some of the headwinds that the

sector had to deal with in 2022.

Russia used to take 7% of South African citrus exports, and 12% of

the country’s exported apples and pears.

Omnia reported in June 2022 that it had sufficient stocks of

fertilisers to sell to farmers, despite the disruption in supply caused

by the Russian invasion of Ukraine and the sanctions which followed

against Russia, the world’s biggest exporter of fertilisers. Omnia,

which owns a fleet of trucks and rail transport which allows it to

control the supply chain process, is experiencing a growth in sales of

its biological and organic products as an alternative to fertilisers.

While agriculture’s contribution to national GDP is variously given

in the range of 2.0%-2.5%, the upstream and downstream links to

agriculture through processing and logistics mean that the real

contribution is more like 15%.

AgriSA states that the amount of agricultural land in South Africa

in 2016 stood at 93.5-million hectares. This represents 76.3% of South

Africa’s total land mass of 122.5-million hectares and about 3% less

than in 1994.

A total of 70% of South Africa’s grain production is maize, which

covers 60% of the cropping area of the country. KwaZulu-Natal and

Mpumalanga produce sugar, but volumes are down.

The Free State Province supplies significant proportions of the

nation’s sorghum, sunflower, potatoes, groundnuts, dry beans, and

almost all of its cherries.

South Africa is famous for its fruit, of which 35% is citrus, 23%

subtropical and nuts, 26% pome fruit, 11% stone fruit and 9% table

grapes. Most of South Africa’s citrus and subtropical fruit comes from

the eastern part of Limpopo. There are about 3 500 wine producers in

ONLINE RESOURCES

Agricultural Research Council: www.arc.agric.za

Grain SA: www.grainsa.co.za

SA Table Grape Industry: www.satgi.co.za

South African Berry Producers’ Association: www.berriesza.co.za

Dairy equipment to cope with

increased milk volumes.

Credit: Tetra Pak Group

South Africa, with the majority

located in the Western Cape.

The Eastern Cape is the largest

livestock province, which

includes Angora goats, from

whom mohair is taken. The

province is the centre of the

country’s mohair value chain.

South Africa has a beef herd of

14-million.

South Africa’s milk producers

normally produce about

3.3-billion litres of milk every year

(Milk Producers Association).

The decision by processing

and packaging company Tetra

Pak to spend R500-million

on expanding capacity at its

packaging material plant in

Pinetown indicates an uptick in

agricultural production.

The new plant allows the

company to increase its local

content to 80% and to make

the Pinetown plant a production

hub for the region. Among the

companies clients are dairy

companies such as Clover and

Woodlands Dairy which package

milk for major retailers. ■

43


FOCUS

The Responsible

Mohair Standard

has restored trust

South African mohair is once again

popular with global fashion brands.

The mohair industry has embraced the Responsible

Mohair Standard as we are all aware that the consumer

of today is rightfully far more conscious, not only of

the impact of their purchases on the environment, but

also the impact their purchases have on the people

producing the goods.

The Responsible Mohair Standard is all-inclusive and is very

specific as to its requirements in respect of the environment

and welfare of the animals and all individuals employed in the

production of mohair products.

There is no doubt that having Samil’s manufacturing operations

certified under the Responsible Mohair Standard has opened new

opportunities for trade throughout the world.

However, the dynamic team at Samil feels compelled to ensure

that not just the Samil manufacturing operations but all mohair

operations owned or run in partnership with Samil, must also be

RMS certified. Samil therefore embarked on a concerted drive to

have all the Angora goat farms which are either owned or run in

partnership with Samil Farming were also certified as RMS.

This was no mean task as there are more than 30 farming

operations in the Samil Farming portfolio in and around the Karoo

region. However, the Samil Farming Manager, Andries Coetsee, and

his very able assistant, Nienke Scholtz, embraced the challenge and

Samil is proud to announce that, as of the end of August 2021, all

Samil mohair operations are proudly RMS certified.

Through the determined efforts of Mohair South Africa, in

conjunction with The Textile Exchange, in ensuring the development

of the Responsible Mohair Standard, the mohair industry has been

able to regain the trust, not only of the big fashion brands, but also

of the world.

This can clearly be seen in the record mohair prices currently being

achieved as brands the world over are scrambling to reintroduce RMScertified

mohair articles into their product ranges.

The knock-on effect is that jobs that had previously been in jeopardy

are now secured and, due to the new-found appetite for mohair, more

jobs have been created.

The benefits of RMS certification

After the PETA exposé in 2018, the South African mohair industry

became a pariah and many of the top fashion brands vowed to no

longer use mohair in their products. This put nearly 30 000 people

at risk of being unable to earn a living and feed their families.

68 SOUTH | www.opportunityonline.co.za

AFRICAN BUSINESS 2023

44

yarns@samil.co.za | sales@samil.co.za | www.samil.co.za

OVERVIEW

Mining

Platinum’s role in green hydrogen is a boon for miners.

SECTOR INSIGHT

An Australian company has

listed on the JSE.

Platinum prices have buoyed the South African economy

through tough times. Credit: Implats

Australia has one of the world’s most dynamic mining sectors so

it was good news for South African mining and the JSE when

Southern Palladium listed in Johannesburg in June 2022.

With a primary listing on the ASE, Southern Palladium has

a majority share in Miracle Upon Miracle Investments Propriety Limited

(MUM), a local company which has prospecting rights south of Modikwa

mine in Limpopo, a joint venture run by Anglo American and African

Rainbow Minerals. The balance of equity in MUM is owned by a company

owned by the Bengwenyama-you-Maswazi community.

The new-age minerals that miners are increasingly paying attention

to are copper, bauxite and magnesium.

Sibanye-Stilwater is increasing its exposure to minerals and

technology that will be needed in the greener future. Two of the South

African firm’s board have joined the board of Finnish lithium company

Keliber and Sibanye’s stake in the company was raised to 80% in October

2022. The Keliber project is expected to supply about 15 000 tons a year

of lithium hydroxide, the product which is used in the manufacture of

lithium-ion batteries for electric vehicles.

As the world tries to decouple

from the carbon economy,

miners and energy planners are

increasingly turning to green

hydrogen to solve mankind’s

biggest problem. Green

hydrogen is hydrogen created

using renewable resources, and

the Northern Cape has those in

abundance. The Northern Cape

Green Hydrogen strategy was

announced in 2021 at COP 26. A

Northern Cape Green Hydrogen

Symposium was held in 2022

and Sasol is in the process of

conducting a pre-feasibility study

on hydrogen for the province. Any

developments in that sphere will

be linked with, and give a boost to,

the Boegoebaai Harbour project.

The National Department of

Mineral Resources and Energy, in

collaboration with the Northern

Cape Provincial Government,

hosted the Northern Cape

Mining and Minerals Investment

Conference in 2022. The

department’s stated goal is that

all South Africans should derive

sustainable benefit from the

country’s resources. The province’s

considerable mineral wealth was

outlined to potential investors

and plans for infrastructure

development (such as industrial

parks and Special Economic

Zones) were highlighted.

Another province to take

advantage of the green hydrogen


46

OVERVIEW

economy is Limpopo. In May 2022, Anglo American unveiled a prototype

of the world’s largest hydrogen-powered mine haul truck designed to

operate in everyday mining conditions at its Mogalakwena PGMs mine

in South Africa. Anglo American intends using green hydrogen which it

will produce at the mine to feed into its green-hydrogen system, which

includes production, fuelling and a haulage system. The 2MW hydrogenbattery

hybrid truck generates more power than its diesel predecessor

and can carry a 290-ton payload. Forty Anglo trucks will be retrofitted,

starting in 2024, and the whole fleet should be green by 2030.

Both Special Economic Zones (SEZs) in Limpopo are showing interest

in green hydrogen. The operating company of the Musina-Makhado

Special Economic Zone (MMSEZ) has signed a partnership agreement

for green hydrogen electricity generation with Australian company

African Resources Development Energy (ARD Energy). The Fetakgomo-

Tubatse Special Economic Zone (FTSEZ), on the other hand, has plans

to turn that area’s platinum group metals to good effect in the energy

field. Platinum and iridium are important catalysts in the process which

creates hydrogen, so that has become one of the big selling points of

the FTSEZ. In July 2022, a delegation from the FTSEZ participated in the

UK-RSA partnership mission on Hydrogen Economy Roadmap.

Anglo Platinum’s 75MW solar plant under construction at

Mogalakwena could well become the 320MW plant that the company

wants it to be, as President Ramaphosa has announced the lifting of

restrictions on the scale of private generation.

With ample wind and sun, a long coastline and 75% of the world’s

platinum group metals (PGMs), South Africa is well placed to be a leader

in the production of green hydrogen.

Rhodium palladium, platinum and gold collectively rose in price by

more than 50% at one stage during 2021. Increased demand for PGMs

has been a trend for some years, driven by the vital role played by PGMs

in reducing pollution in the automotive sector. This was boosted more

recently by applications for renewable energy and by supply constraints

brought about by Covid-19 with production volumes down and

shipping made more difficult throughout 2020 and into 2021.

For FY2022, Impala Platinum (Implats) announced cash dividends of

R14.8-billion paid to shareholders, R12.8-billion taxes and royalties paid

to government and procurement of R3.2-billion spent on community

businesses. Implats intends expanding production at its Two Rivers PGM

mine by 180 000oz. The project will take four years and cost R5.7-billion.

In the 2021/22 financial year, mining contributed R127-billion in tax

out of a total corporate tax tally of R318-billion. Minerals made up 60%

of exports and royalties came in at R28-billion. High commodity prices

ONLINE RESOURCES

Council for Geoscience: www.geoscience.org.za

Minerals Council South Africa: www.mineralscouncil.org.za

Minerals Education Trust Fund: www.metf.co.za

National Department of Mineral Resources and Energy: www.dmr.gov.za

The conversion project to underground

mining will extend the life of

De Beers’ Venetia diamond mine in

northern Limpopo. Credit: De Beers

ensured a R180-million higher

tax bounty for the South African

Revenue Services, amounting

in the end to R1.55-trillion.

This allowed government to

continue with some Covid-relief

programmes for longer than had

been anticipated.

Training

The Minerals Education Trust

Fund (METF) contributes

towards the employment costs

of 254 academic staff at nine

tertiary institutions in scarceskills

subjects such as mine

ventilation, rocks mechanics and

extractive metallurgy.

The 29 members of METF

are among the country’s

biggest mining companies.

Grants are made to institutions

for the purchase of equipment

but the main point of funding is

to support 4 471 undergraduate

students, 76% of whom are

black African and 39% of whom

are female. ■

47


INTERVIEW

New mapping shows that

South African mining could

have a strong future

Mosa Mabusa, CEO of the Council for Geoscience, strongly believes

that geoscience should not be seen as a cost centre, but rather as an

investment in the country’s future.

Mosa Mabuza, CEO

BIOGRAPHY

After qualifying as a geologist from

Wits University, Mosa held various

positions at De Beers and Anglo

American and worked in jurisdictions

as varied as West Africa and

Canada. From his appointment as

the Director of Mineral Economics

in the former Department of Minerals

and Energy, he was promoted to

Deputy Director-General of Mineral

Policies and (Investment) Promotion

in 2012. He has been CEO of CGS

since 2017.

What are the short- and medium-term goals of the Council

for Geoscience?

We are accelerating the organisation’s strategic reorientation. None

of us could have expected the extent of the disasters in KwaZulu-

Natal and the Eastern Cape so we are looking at how far we can

reallocate resources so that we can contribute to that response. In

the main, we continue to map at the scale of 1:50 000.

We are building from a foundation that our forebears have

constructed. We are standing on their shoulders.

We are focused on identifying and confirming the presence of

critical minerals in economic concentrations, to support emerging

industries and the Just Energy Transition Programme.

We have a focus on infrastructure and land-use work

and supporting Eskom with the probabilistic seismic-hazardassessment

study for the application of the extension of Koeberg.

We are working on groundwater and modelling so that we

gain a greater understanding of groundwater as an asset.

There is a national goal of reimagining mineral exploration in

South Africa with a target of achieving a share of 5% of the global

expenditure by 2025. To get there, we have to quadruple our

efforts. Our geology confirms that notwithstanding 150 years of

mining history, we have not begun to mine in South Africa.

What is the significance of the new mapping?

Higher-intensity mapping provides greater clarity of information

so that the exploration community can make decisions to invest.

We have always known of pegmatite rock in the Northern

Cape. It is a lithium-bearing rock and there are other possible rare

earth elements. With mapping at this scale, we can confirm an

extension of this pegmatite rock by a further 67%.

We published a map in March and we are saying to the

investment community that these critical minerals are a new

centre of focus for investment. This is a test case to demonstrate

that money that goes into geoscience is not a cost centre – it is

an investment.


48

Please give an update on the carbon capture

storage project.

We are implementing it in partnership with the

World Bank and it is progressing exceptionally well.

Govan Mbeki Local Municipality in Mpumalanga

has been supportive of this research and they have

ceded the land. They are saying to us please do this

research to help us to make appropriate choices.

We are taking a comprehensive stakeholderled

approach. Our message is that in our world of

science we don’t know what we don’t know. Allow

us to do the science so that we can establish the

facts, then we can guide you.

We have already concluded the geophysics

high-resolution survey and geological mapping.

We are excited that basalt is proving to be one

of the sources of environmentally-appropriate

sequestration materials for carbon.

We are finding that once the emissions are

captured, there are numerous applications that,

depending on the volume, could catalyse a range

of economic activities. I have come across the most

interesting technology that suggests that coal could

actually be a reliable source of green hydrogen. This

is something I want to test. Now imagine if this

hypothesis is proven to be correct. Then I can argue

that, through science, we have indeed greened

our coal. Science should not have any ideological

predisposition. The greatest risk is when choices

are made without the scientific interpretation. That

makes me nervous, not only about our country but

about humanity at large.

I am hopeful that this research can prove that

indeed coal can be the most reliable source of

hydrogen. I call it the new gold of renewable energy.

And then coal becomes that which renewable

energy depends on.

What are the main objectives of the CGS Summit?

The key objective is to bring to the fore and

celebrate the contribution of geoscience to South

Africa’s development.

But we also want to examine the renewables

debate. People talk about renewables very loosely,

but to sustain the current demands of energy (not

including future demands), the existing global

reserves of copper would only cater to 35% of that

– and that is only for renewable energy.

Mapping to the scale of 1:50 000 is revealing new

things about South Africa’s mineral resources.

We need to be looking at where are we going.

What are the next sources of copper and other

minerals that will support our strategic choices?

Geoscience plays the key role as a pathfinder to

those types of minerals. Increasingly our role will

become even more important to society as we

advance in line with the choices that we are making.

There are certain things that we need to do

today and in the next five to 10 years that will lay

the new foundation for the next 110 years. This

summit will consider these things.

We will be celebrating the crème de la crème,

the professors of our country who have been

guardians and who have played a critical role in

advancing the body of knowledge of geoscience.

We should never take that for granted.

Is there international participation?

The summit is in a hybrid format to enable physical

and virtual participation. We have a global footprint

of interest that spans all the continents. What makes

us even more excited is that some of our very

distant partners are already packing their bags as

all roads lead to eThekwini to celebrate geoscience.

We have chosen eThekwini because of the

disaster that happened there. Parallel sessions

will focus on the applications of geoscience

such as geo-hazards, infrastructure and optimal

land use. We can begin to demonstrate that

some things can be averted with the preapplication

of geoscience. ■


FOCUS

Building a cleaner, greener world

Implats aims to deliver superior value to all its stakeholders.

Sophisticated refinery complex in Springs, Gauteng.

Impala Platinum Holding Limited (Implats)

is a leading producer of platinum group

metals (PGMs), structured around six mining

operations and a toll refining business, Impala

Refining Services. The Group’s mining operations

span the Bushveld Complex in South Africa, the

Great Dyke in Zimbabwe and the Canadian Shield

and include Impala Rustenburg, Zimplats, Marula,

Impala Canada, Mimosa and Two Rivers. The

Group maintains a primary listing on the JSE in

South Africa, a secondary listing on South Africa’s

A2X and a level one American Depositary Receipt

programme in the USA.

Implats contributes approximately 20% to

annual global primary PGM production and

employs more than 55 000 employees (including

contactors) across its operations – which

presents a complex labour dynamic, specifically

with respect to safeguarding the safety, health

and wellness of employees and sustaining

constructive industrial relations. Our people are

the heartbeat of our Company and though our

values – to respect, care and deliver – we foster

a culture of teamwork and accountability.

The Company’s vision is to be the world’s

best PGM producer, sustainably delivering

superior value to all its stakeholders. Implats

is committed to a value-focused strategy

and places a strong emphasis on developing

a portfolio of long-life, low-cost, shallow,

mechanised or mechanisable mining assets

to sustainably deliver improved returns for all

its stakeholders.

Implats has total attributable resources

of 269-million ounces of PGMs. Our markets

are in South Africa, Japan, China, the US and

Europe. The metals we produce are the key

to making many essential industrial, medical

and electronic items and they contribute to a

cleaner, greener world. ■


50

Creating a better future

through the way we do business

Developing and caring for

our host communities

Caring for and

supporting our

environment

Providing meaningful

employment

Creating value for

all our stakeholders

Coolead 18903

OVERVIEW

Energy

Infrastructure for carrying newly-generated power is a priority.

Showing two phases proposed for the development of Renewable Energy Development Zones (REDZs) and

electricity grid infrastructure corridors where investment in transmission infrastructure is planned. Credit: CSIR

The second phase of the Strategic Environmental Assessment

(SEA) for wind and solar photovoltaic (PV) energy in

South Africa proposes three additional Renewable Energy

Development Zones (REDZs) for wind and solar photovoltaic

energy projects, taking the total number to 11 (see map).

The REDZs support the implementation of the Integrated Resource

Plan (IRP 2019). Renewable energy projects that might be developed in

these new REDZs have the potential to make significant contributions to

mine rehabilitation and, by creating jobs, support a just energy transition

in the specified areas including areas where coal power stations are

planned to be decommissioned by 2030.

A most important aspect for South Africa as it brings more and

more renewable energy projects on line are the so-called “transmission

corridors”. These have to be beefed up to be able to carry extra capacity

if energy plants are built where transmission infrastructure is close to (or

at) full capacity. This adds to the attractiveness of using existing power

plant sites for new generation.

SECTOR INSIGHT

Komati power station is

become a site for making

mini-grid components.

Part of the equation

for agreeing to new power

generation in the current context

is whether or not there is sufficient

carrying capacity to link the new

solar or wind plant to the grid.

Large investments are needed

to beef up the Northern Cape’s

capacity, but the problem is also

leading planners to find different

solutions, for example, to start


52

OVERVIEW

exploring more carefully whether other provinces (with under-utilised

infrastructure) might not be sensible locations for new renewable-energy

plants. National utility Eskom has signalled that it wants to move into

the new era, partly through a process whereby the entity will be broken

into three more competitive units, but more immediately through the

announcement in July 2022 of 18 winnings bids from independent power

producers (IPPs) for renewable projects on Eskom land, 4 000ha of which

the utility has made available for this first phase.

Eskom owns 36 000ha in Mpumalanga alone. A total of 1 800MW

will become available to the grid and it will be cheaper to transmit

because the solar or wind plants will be right next to the existing Eskom

transmission lines.

Eskom is undertaking studies to assess the potential impact on

local communities of power plant closures. Options to get these

plants producing energy again include gas, biomass and hydrogen

but it is possible they might be used for something quite different. The

workshops of Komati power station are to be converted into a factory for

the manufacture of components for containerised mini-grids.

Eskom wants to be a net-zero company by 2050

Sasol has announced plans to start producing 1 200MW of renewable

energy by 2030. Sasol is an integrated oil, gas and chemicals company

with more than 30 000 employees and operations in 31 countries.

Products manufactured by Sasol include synthetic fuel, petroleum,

paraffin, jet fuel, creosote, bitumen, diesel and lubricants. The primary

feedstock for synthetic-fuel production is coal.

The National Cleaner Production Centre (NCPC) is expending

considerable energy (renewable, mostly in the form of brain power)

to help commercial operations use less energy. A programme of the

Department of Trade, Industry and Competition (dtic) housed within

the Council For Scientific and Industrial Research (CSIR), the NCPC also

spent some money in rolling out an aspect of the Industrial Energy

Efficiency Programme to large poultry company Daybreak Farms.

Through improved energy management, the replacement of office

lights with LED, the reduction of idling and heat loads in cold rooms

and training, an overall energy consumption of 0.98% was achieved

and energy savings of 916.85GJ were made.

South Africa’s acclaimed Renewable Energy Independent Power

Producer Procurement Programme (REIPPPP) attracted about R200-

billion in committed investments, mostly in solar and wind power, in just

ONLINE RESOURCES

National Cleaner Production Centre: www.industrialefficiency.co.za

National Energy Regulator of South Africa: www.nersa.org.za

South African Independent Power Producers Association: www.saippa.org.za

South African Wind Energy Association: www.sawea.org.za

five years. The first bidding window

of the REIPPPP was announced in

December 2011. By October 2021,

the programme could boast of 5

423MW of renewable electricity

capacity from 83 IPP projects,

accounting for 7% of the country’s

energy demand. The latest bidding

rounds of South Africa’s independent

power producers programme

have revealed astonishing low

costs: in round five the lowest solar

generation bid came in at 37.5c/

kWh while one of the wind power

offerings was priced at 34.4c/kWh.

In June 2021 President Cyril

Ramaphosa announced that

private entities could go ahead

and produce electricity without

a licence, raising the threshold

from 1MW to 100MW at a stroke.

Intensive energy users such as

mining houses had been arguing for

this policy initiative for a long time,

as had manufacturers in the sugar

and timber milling industries, which

produce vast amounts of biomass

which can be turned into energy.

The presidential announcement

was almost universally welcomed

by interested parties, including the

CEO of national utility Eskom, which

is struggling to keep South Africa

supplied with sufficient power.

Mining companies such as Sibanye-

Stillwater and Gold Fields want to

marshal renewable energy resources

to power their own operations.

Another big game-changer in the

South African energy landscape

will be the unbundling of Eskom,

referenced above.

An Independent Transmission

System and Market Operator was

set to be established. Companies

such as Earth & Wire are preparing

to become independent utilities in a

more flexible energy environment. ■

53


FOCUS

South Africa is on the path to

green hydrogen exports

Thomas Roos, Principal Research Engineer at the Council for Scientific and

Industrial Research (CSIR), reports on cooperation with three German ministries.

Thomas Roos, Principal Research Engineer, CSIR

Under the Just Energy Transition Partnership

announced at COP26 in Glasgow, the governments

of UK, France, Germany, the USA

and the EU have agreed to provide $8.5-billion

in financing in the form of grants and soft loans,

to assist South Africa to decarbonise the electricity

sector by early retirement of coal-fired power plants

and expansion of renewables, to accelerate the introduction

of electric vehicles and to facilitate the adoption

of green hydrogen. In February, the Department

of Science and Innovation released the Hydrogen

Society Roadmap. In November at the South African

Green Hydrogen Summit, President Ramaphosa announced

that the Just Energy Transition Investment

Plan, recently released for public comment, has identified

green hydrogen as one of the four “big frontiers”

of a just energy transition, indicating that it has huge

growth and investment potential.

CSIR research is showing ways that South Africa

can become a significant exporter of green hydrogen

and the body is already involved in projects with

several German ministries.

It may therefore legitimately be asked: “What

is green hydrogen, and why is it important?” While

the term green hydrogen is often used to describe

hydrogen produced from any non-fossil-fuel-based

source (such as biogenic or nuclear), in this context

it is more strictly defined as hydrogen produced by

splitting water by electrolysis into hydrogen and

oxygen, using electricity from renewable sources.

Green hydrogen may therefore be regarded as

renewable electricity stored in chemical form.

Green hydrogen is important for the

decarbonisation required by the Paris Agreement

(signed and ratified by 193 countries) and the

European Green Deal (which commits the EU to

be carbon-free by 2050). The most efficient and

generally lowest-cost decarbonisation approach

is to convert current fossil-driven processes

to instead be directly driven by renewable

electricity. There are two scenarios, however,

where this direct renewable electrification is not

always possible or feasible.

Geography dictates

The first scenario involves geographic locations

where energy demand exceeds feasible renewableelectricity

supply. This is the case for Japan, the

world’s third-largest economy and a signatory to

both the Kyoto Protocol and the Paris Agreement. It

is also in the top four importers globally of the three

major chemical energy vectors (coal, oil and natural

gas). Its decarbonisation options are constrained: it

has very limited natural energy resources and the

Fukushima disaster significantly dampened public

appetite for nuclear power. As a result, Japan plans

to move its economy towards hydrogen – mobility

by fuel cell electric vehicles, homes powered by

fuel cells (with the waste heat produced providing

domestic water heating) and central power

generation from combined-cycle power stations,


54

FOCUS

Credit: Shutterstock

fired by green ammonia. To allow this, from 2030

Japan will import about 300 000 tons of hydrogen

per year (at a target price of $3 per kilogram), rising

to between five-million and 10-million tons of

hydrogen per year by 2050.

This presents an opportunity for South Africa:

CSIR modelling has shown that the combination

of South Africa’s excellent solar and wind resources

and the expected cost reductions over time in solar

PV, wind and electrolyser equipment allow green

ammonia produced in South Africa to be delivered

to Japan in 2030, meeting the Japanese cost target.

Difficult sectors

The second scenario involves two broad categories

of hard-to-abate economic sectors. The first category

is heavy-duty, long-range transport where the use

of batteries is ruled out by range, power density or

charging time limitations, such as commercial aviation,

maritime shipping and long-distance trucking.

The second category is a subset of carbonintensive

industrial processes, such as iron and

steelmaking, cement manufacture, ammonia

production and the manufacture of plastics.

Green hydrogen, together with its derivatives

such as green ammonia, green methanol and

sustainable aviation fuel, provides a pathway to

decarbonise these sectors.

For Germany to meet its decarbonisation

targets, the National Hydrogen Strategy of

the German Government states that between

2.7-million and 3.3-million tons per year (90-110

TWh/year) of green hydrogen will be required by

2030, but that only a maximum of 420 000 tons per

year (14 TWh/year) can be generated in-country

(14% of this amount). By far the bulk of the green

hydrogen will have to be imported, some from

elsewhere in the EU such as Portugal, Spain and

the Ukraine; and the remainder from renewablerich

countries in a development relationship with

Germany, such as South Africa.

Three separate German federal ministries are

funding projects to develop the green hydrogen

economy in South Africa: BMWK (Ministry for

Economic Affairs and Climate Action), BMZ

(Economic Cooperation and Development) and

BMBF (Research and Education), and CSIR is

involved in each of these. In a project funded

by BMWK, CSIR and Meridian Economics were

contracted by KfW Development Bank to solicit,

evaluate and rank applications from hydrogen

developers for 200-million euros in concessional

financing to fund green hydrogen projects in

South Africa. From 55 initial applications, a longlist

of 20 projects passed the initial filtration

process, leading to a shortlist of between seven

and 12 projects, depending on the breakdown

of grant versus concessional-loan financing.

The oversubscription of the funding shows

significant market appetite.

CSIR is well positioned to support the energy

transition in this way, as the development and

implementation of green hydrogen will draw on

many of CSIR’s capabilities. ■


OVERVIEW

Oil and gas

The Central Energy Fund has become a shareholder in a Free State gas project.

Renergen’s Virginia Gas Project has passed several significant milestones. Credit: Renergen

South Africa’s reserves of shale gas and coal-bed methane

are set to be exploited and in 2022, the Department of

Forestry, Fisheries and the Environment signed off on

the map (see Energy Overview) of where nine strategic

pipelines will go.

The pipelines are consistent with planning for future gas exploration

projects and coincide to some degree with planned Renewable Energy

Development Zones (REDZs) but have caused some consternation

among environmentalists.

Air Liquide Large Industries South Africa Air is to start operating 16 air

separation units (ASUs) as a result of an R8-billion purchase of a plant in

Mpumalanga from Sasol. The company’s fleet now comprises 17 ASUs in

Secunda, with the units having the capacity to produce 42 000 tons per

day of oxygen.

Sasol announced in 2021 that it was to sell a 30% stake in the

Romco natural gas pipeline that links Mozambique and South Africa.

As part of a global sell-off of assets to reduce debt, Sasol expects to

SECTOR INSIGHT

Routes for nine major

pipelines have been

gazetted.

earn more than R5-billion from

the transaction. The company

will continue to be the pipeline’s

operator and maintains a 20%

stake in the venture.

The Romco pipeline could

carry far more gas in the future

as there have been big finds

of new gas off the coast off

Mozambique which could be

shipped as liquefied natural gas


56

OVERVIEW

(LNG) to Maputo and continue from there to the Sasol plant at Secunda.

The Liquefied Natural Gas Independent Power Producer Procurement

Programme (LNG IPPPP) is part of the broader programme of the

National Department of Mineral Resources and Energy which encourages

private investment in renewable energy, namely the Renewable Energy

Independent Power Producer Procurement Programme (REIPPPP). The

total allocated to gas-to-power in the national power plan is 3 726MW, of

which 3 000MW is for LNG.

Three natural gas exploration permits have been awarded to Tosaco

Energy for the sandstone-rich area between Amersfoort and Balfour in

the western part of Mpumalanga by Petroleum Agency South Africa

(PASA). Tosaco Holdings has a 25% stake in Total SA. Two methane-gas

exploration rights have been granted to Highland Exploration in the

Evander area. PASA regulates exploration and production activities,

and acts as the custodian of the national petroleum exploration

and production database.

Gas is expanding

What to do with redundant power stations is a question testing the

best minds in the country. Eskom has decided that some of its sites

can become locations for renewable energy plants, given that they are

already connected to the grid.

And in 2022 came news that Majuba Power Station is the site of a

successful bid to drill for gas. Australian company Kinetiko Energy aims to

supply Majuba’s 20MW gas generator with fuel. Majuba is one of Eskom’s

many coal-fired power stations which are facing closure in the province

of Mpumalanga and one of several that might be switched to gas.

Kinetiko has a further two sites where it will do exploratory

drilling: one near Sasol’s Secunda synthetic fuel plant and one to

the south of that. A major milestone was achieved in July 2022 for the

Virginia Gas Project, owned by Renergen subsidiary Tetra4. That was

when “natural gas to plant” was achieved. This test allows for the system

to be comprehensively tested, with the inlet line from the gas-gathering

system opened to the process plant and then on to the natural gas

filtration and pre-compression system.

In September, commercial operations of the company’s liquified

natural gas (LNG) plant began. Helium production will follow.

Whereas it took nine years to find the R1.2-billion needed to fund the

first phase of Virginia Project, investors are now looking very keenly at its

prospects. An amount of R3.6-billion has been invested by Ivanhoe Mines

ONLINE RESOURCES

Council for Geoscience: www.geoscience.org.za

Petroleum Agency South Africa: www.petroleumagencysa.com

South African Oil and Gas Alliance: www.saoga.org.za

South African Petroleum Industry Association: www.sapia.co.za

to secure some offtake rights and the

Central Energy Fund has purchased a

10% stake in Tetra4 for R1-billion.

Sproule, a resources accreditation

agency, has given an updated report

on the helium and methane reserves

in the Virginia gas field. The results

were even more positive than

previous estimates, with helium

reserves up by 620% and methane

reserves by 427%. The field covers

187 000ha in the region of Virginia,

Theunissen and Welkom.

The SpaceX rocket that

launched in 2021 used 11 tons

of helium to propel itself off the

ground. Every computer microchip

in the world is produced in the

presence of helium and the world

uses 85 tons of it every day. Exciting

offshore gas discoveries have also

been made in recent years. Total

and its partners first announced

success at a site called Brulpadda

off the coast of Mossel Bay. The

nearby Luiperd prospect in Block

11B/12B delivered more exciting

news when gas condensate was

also found there.

The block, in the Outeniqua

Basin 175km off the southern coast,

covers an area of about 19 000km² in

water depths of 200m-1 800m.

The two finds raise the odds

of Total investing in what it calls

a “world-class” offshore gas site.

The drilling campaign employed

195 South Africans with specialist

skills but the potential spinoff is

enormous for the Western Cape

and South Africa, if the find leads to

drilling and commercialisation.

PASA has noted the significance

of international oil companies

committing to exploration

off South Africa’s coast. More

exploration will guarantee that

interest is maintained. ■

57


FOCUS

South Africa’s oil and gas

sector is open for business

The application by TotalEnergies for the right to

produce signals an exciting new phase.

TotalEnergies has submitted an application to

Petroleum Agency South Africa (PASA) to convert

its exploration right into a production right.

The TotalEnergies-led consortium, after

making world-class discoveries off South Africa’s

southern coast off Mossel Bay in the Outeniqua Basin,

has now made the decision to proceed to the next

phase, which could have enormous implications for

the local, regional and national economy. The next

phase, a gas-market development period, is not the

same as an immediate decision to start building

pipelines and decks, but it is a step along the way. The

Luiperd and Brulpadda discoveries were made in the

Block 11B/12B areas.

The joint venture has decided to give up a

northern portion of its right, reducing the proposed

area to be worked to 12 000km², whereas the

exploration right extended to more than 18 000km².

TotalEnergies’ joint venture partners in Block 11B/12B

include QatarEnergy and Canadian Natural Resources.

A massive rig travelled from Norway to explore

off South Africa’s south coast.

If the process moves further along to the point

where TotalEnergies obtains all the environmental

permits it needs and starts to develop the resource,

some estimates suggest that gas could begin to

flow by 2026.

Petroleum Agency SA plays an important

role in developing South Africa’s gas market by

attracting qualified and competent companies

to explore for gas, as in the case of TotalEnergies

and its partners. Another major focus is increasing

the inclusion of historically-disadvantaged South

Africans in the upstream industry.

Currently, natural gas supplies just 3% of South

Africa’s primary energy. A significant challenge

facing the development of a major gas market

is the dominance of coal. Opportunities for gas

lie in the realisation of South Africa’s National

Development Plan (NDP) and the Integrated

Resource Plan (IRP).

West coast developments

While the newspaper headlines focussed mainly

on the discoveries off the south-western coast

of South Africa, progress was being made off the

west coast too.

Eco Atlantic Oil & Gas and its partners have

hired a rig to start exploring Block 2B, an area which

has been of interest to the oil and gas industries for

many years. Eco Atlantic Oil & Gas is the operator

of Block 2B while Africa Energy, Panoro Energy ASA

and Crown Energy AB are other major investors.

Block 2B is located in the Orange Basin (see

map) where both Total and Shell announced

significant oil and gas discoveries offshore Namibia

in early 2022. The block covers an area of 3 062km²

with water depths from 50 to 200 metres.

South Africa shares a geological sedimentary

basin with its western neighbour so the

announcement by Shell that it had made significant


58

oil and gas discoveries in the southernmost sector

was welcome news indeed. The discoveries were

made at the Graff-1 well.

Scientifically, the big takeaway from Shell’s

discovery is related to where the finds were made.

Previously, it was believed that only gas would

be found in one layer of the shelf, known as the

Cretaceous sector; Shell found a working petroleum

system with oil as a component in the Cretaceous

sector. The geological sedimentary basin extends to

offshore Cape Town and out to sea, stretching over

160 000km². The rights to the South African southern

section of the basin are held by Shell and its partners

TotalEnergies and PetroSA.

TotalEnergies have themselves had promising

early signs of possible oil and gas finds near the Shell

find off Namibia, and in the block adjacent to the

South African maritime border. This is the Venus-1.

The deepwater sector of the South African Orange

Basin is unexplored, but similar geology extends

south of Namibia into the South African sector.

Geological features similar to the Namibian

reservoirs have been identified on seismic data

in the South African part of the basin, also in the

Cretaceous, but these remain to be tested through

drilling. New seismic data acquired by the survey

planned by the company, Searcher, will assist in

reducing exploration risk and help in identifying

and quantifying possible oil and gas deposits off

South Africa’s west coast.

Onshore prospects

The Department of Forestry, Fisheries and the

Environment (DFFE) in 2022 issued draft regulations

to govern the process of hydraulic fracking because

Renergen’s Virginia Gas Project is

barrelling ahead.

the underground resources of the Karoo are again

in the spotlight.

Various environmental studies are being done,

including groundwater and geological studies.

The geo-environmental baseline study for gas

in Beaufort West undertaken by the Council for

Geoscience has been completed and showed

significant resources of shale gas. The study did not

encompass any economic modelling.

PASA will be responsible for the granting of any

licences once the draft regulations are finalised.

The massive resources of natural gas that

Renergen has been working on for the last few

years reached commercial production in October

2022 in the northern Free State. Renergen, through

its subsidiary Tetra4, is the only holder of an

onshore petroleum production licence issued by

the Department of Mineral Resources and Energy

through the PASA.

The production right area covers 187 000

hectares around the towns of Welkom, Virginia

and Theunissen.

Liquid natural gas for the domestic market

and helium for export from this project will

create an entirely new stream of energy options

for South Africa. ■

59


FOCUS

Driving socio-economic

growth

Petroleum Agency South Africa assigns exploration and

production rights to bolster the country’s economy.

South Africa is a net importer of fuel and

the country’s refining capacity has been

reduced in recent years.

To counter this trend, exploration

has been on an upward trajectory. Partly this is

explained by growing certainty in the regulatory

environment and by the good work done by

Petroleum Agency South Africa (PASA), the agency

which evaluates, promotes and regulates oil

and gas production in the country. This has seen

increased interest in South Africa’s potential as a

destination for investment dollars.

Underpinning PASA’s strategy is the need to

ensure that all prospecting and mining leases are

for the long-term economic benefit of South Africa.

This applies to every kind of licence issued by the

agency, be it in old technologies or new.

Just Energy Transition

PASA also has to deal with the global desire to

move away from fossil fuels and to start using

cleaner, renewable energy.

The Mossgas facility at Mossel Bay could be revitalised

if new finds are turned into gas production.

Is it possible to grow the economy by

exploiting the country’s natural resources and start

moving to a greener future? PASA CEO Dr Phindile

Masangane not only thinks it’s possible, she insists

that it’s something South Africa must do.

Dr Masangane points out that with South

Africa’s excellent solar resources it makes

sense to localise the solar value chain to boost

manufacturing but the country should not ignore

what it has. “At the same time, we know that the

gas value chain is well established in the country,

so let’s also capitalise on that.”

The multiple uses of gas could play a major role

in helping South Africa transition away from fossil

fuels while at the same time boosting economic

growth. “We need gas not just in electricity and

transport,” noted Dr Masangane, “but importantly

for South Africa, which is in desperate need of an

economic turnaround, is for us to use this gas for

our manufacturing industry.”

Referencing a section on gas in a report on

energy in Africa by the International Energy

Agency, Dr Masangane says, “Most of what Africa

produces is actually exported out of the continent.”

The report notes that Africa accounts for less than

3% of the world’s energy-related carbon dioxide

emissions. Says Dr Masangane, “This report calls

for us as Africa to extract the gas and produce it

and use it not just to power the continent but to

reindustrialise the continent and industrialise for

the first time some countries on the continent.”

Potential impact

The gas discoveries that have been made off the

coast of South Africa (near Mossel Bay), when linked

with the massive finds off the coast of Mozambique

and the enormous potential that exists in fields off

the west coast, amount to what could become

a massive change in the regional economy.

TotalEnergies and its partners have deployed the


60

FOCUS

Deepsea Stavanger offshore drilling rig and they

have achieved significant successes. The two fields

where finds have been made are called Luiperd

(where 2.1-trillion feet of contingent gas resources

has been found, enough to power a medium-sized

city for five years) and Brulpadda (1.3 Tef ), which are

part of Block 11B/12B.

If this gas were to be piped to the existing

gas-to-liquid plant at Mossel Bay, Mossgas,

then instead of spending about R12-billion on

decommissioning the plant, the facility could

instead start generating R22-billion in taxes and

royalties and save South African taxpayers R26.5-

billion through not having to import oil and

refined products.

PASA estimates that the gas found in these

blocks could produce 560-million cubic feet per

day of gas for more than 15 years. TotalEnergies’

expenditure on stream phase one could amount

to $3-billion in 2027 and create 1 500 direct jobs, 5

000 indirect jobs and increase the country’s gross

domestic production by R22-billion.

The plan is to run the gas via a pipeline to a

new fixed steel platform, and from there to use

the existing pipeline to get the gas to Mossgas.

Up to 18 000 barrels per day of condensate

and 210-million cubic feet per day (MMcfd)

are expected to be pumped to the facility. Gas

condensate is a hydrocarbon liquid stream

separated from natural gas and is used for making

petrol, diesel and heating oil. ■

DATABASE MANAGEMENT

The continental shelf of the Republic of South

Africa covers some 200 000km² and the country

has a coastline approximately 3 000km in length.

Petroleum Agency SA is responsible for

the archive and management of the national

hydrocarbon exploration database on behalf of

the State. It has digitised, indexed and archived all

of the data and reports resulting from the drilling

of more than 300 offshore and some 200 onshore

boreholes. The exploration database also includes

seismic field and processed data for more than 300

000km of 2D and 40 000km² of 3D seismic data

that was acquired offshore and some 9 800km of

seismic processed data that was acquired during

the late 1960s in the Karoo, Algoa and Zululand

onshore basins.

Being the custodian of the National Petroleum

Exploration and Production Database of South

Africa, the Agency relies on a sustainable and

effective Information Management Infrastructure

in order to comply with its mandate to:

• archive and maintain a database on petroleum

exploration and production data

• provide access to existing data,

cores, well samples, information

and literature on request

• add value and incorporate

new as well as interpreted

data into the database

• maintain records of all

hydrocarbon exploration

and production

activities.

PASA CEO Dr Phindile Masangane

OVERVIEW

Water

South Africa is investigating how best to use its groundwater.

A mural depicting the water goddess Camissa by local artist Nadia Nardstar has been unveiled at

the V&A Waterfront Cruise Terminal. Credit: John Young

Managed aquifer recharge (MAR) might be one of the

answers to the Cape metropole’s enduring water

shortage. The idea of putting excess water into the

Cape Flats aquifer during times of plenty – and then

drawing on that water when drought hits – is the subject of a study

by UCT’s Department of Environmental and Geographical Science.

It’s not a new idea; the smaller Atlantis aquifer has been playing that

role for decades.

A country that is expert at using its groundwater resources has

signed up to cooperate with South Africa in investigating how the

much drier African country might exploit groundwater. Denmark

gets nearly all of its water from groundwater and the latest intergovernmental

agreement signed by South Africa and Denmark

is a strategic green cooperation. Previous memorandums of

understanding have dealt with energy, resilient cities – and water.

Two huge and colourful murals have been created at the V&A

Waterfront Cruise Terminal to publicise the groundwater partnership,

one by a Danish artist and the other by a local artist. Nadia Nardstar

took 15 days, with the help of an assistant, to create a depiction of the

water goddess Camissa. The mural project is a collaboration between

the Danish Embassy, the City of Cape Town, the Table Mountain

Water Source Partnership, WWF and Maersk.

The National Cleaner Production Centre South Africa (NCPC) is the

technical partner for the water use part of Phase 2 of the Strategic Water

SECTOR INSIGHT

Councils owe water boards

more than R10-billion.

Sector Cooperation between

the governments of Denmark

and South Africa. The NCPC,

which runs the Industrial Water

Efficiency project, has found that

more efficient use of energy (a

key focus area of its work) has also

led to less water being used in

production processes.

Supplying water to

households and businesses

has often been a task beyond

the capabilities of some of

South Africa’s municipalities.

As of June 2021, South African

municipalities owed more than

R10-billion to water boards.

Leaking pipes account for a

large portion of the water lost


62

OVERVIEW

to South African municipalities in trying to serve their households

and businesses. The simple expedient of reducing water pressure,

which the City of Cape Town introduced during the period of

severe water shortage that raised the spectre of “Day Zero”, reduced

water use by 40%.

The concept of non-revenue water (NRW) is a vital aspect in the

sustainability of any operation or agency in the water sector. NRW

can result from faulty metering and leaky pipes but in South Africa,

non-payment is a big contributor to terrible NRW percentages. In

some municipalities it is as high as 70% whereas Denmark’s NRW is

routinely at or below 7%.

The Municipal Infrastructure Support Agency (MISA) falls under

the National Department for Cooperative Governance and Traditional

Affairs and will assist municipalities to plan for, provide and maintain

infrastructure. The first action of MISA was to commission 81

engineers and town planners to get to work in areas that need the

most help.

Improving dams

Water loss in a water-scarce country is a serious business. The National

Department of Water and Sanitation (DWS) has appointed the Water

Research Commission (WRC) to develop and manage the National

Siltation Management Strategy for Large Dams. More than 90% of

the country’s total storage capacity is carried by 321 large state dams,

most of which are subject to serious sedimentation, which greatly

reduces their carrying capacity.

Expectations are that South Africa will have a 17% water deficit by

2030 and so the matter is urgent. Three government water schemes

are the target of the pilot plan: Hazelmere Dam in KwaZulu-Natal;

Darlington Dam in the Eastern Cape; and Welbedacht Dam in the

Free State. Key deliverables include creating models for sustainable

dredging and decision-making. The programme is intended to

be complete by 2023. In the North West, the revitalisation of the

Vaalharts-Taung Water Irrigation Scheme will double the land

available to emerging farmers, create more than 10 000 jobs during

its implementation, resolve water shortages in local municipalities

and provide certainty for producers of fresh produce.

ONLINE RESOURCES

National Cleaner Production Centre South Africa: www.ncpc.co.za

National Department of Water and Sanitation: www.dws.gov.za

South African Water Research Commission: www.wrc.org.za

Water Institute of South Africa: www.wisa.org.za

The project was gazetted as

one of the Strategic Integrated

Projects (SIPs) in 2020 and

falls under the Presidential

Infrastructure Coordinating

Commission (PICC). The

existing Vaalharts Irrigation

Scheme is one of the largest

irrigation schemes in the

world, covering 39 000ha under

irrigation, and extending it to

Taung in the North West will

give it even greater reach. The

scheme currently has 1 000km

of concrete-lined canals and

more than 300km of concrete

drainage. The DWS has released

a master plan in response

to the severe droughts that

have affected the country in

recent years. It calls for annual

investment for a decade of

R3.3-billion in infrastructure

to achieve water security. This

is a figure that can only be

achieved with the help of the

private sector.

In an attempt to reduce the

amount of water sucked up by

alien plants, Coca-Cola aims to

recover nearly three-billion litres

of water through the removal of

invasive plants.

Another response to

the municipal problem is a

new national strategy which

gives a bigger role to wellresourced

water boards

such as Umgeni Water and

Sedibeng Water. In terms of

the National Water Resource

Strategy, catchment area

management agencies have

been established to oversee

water resource management

on a regional basis. ■

63


OVERVIEW

Engineering

A huge bridge in the Eastern Cape is an engineering challenge.

One of the most exciting engineering projects in South

Africa – and fraught in more ways than one – is the

Msikaba Bridge project that forms part of the new N2 toll

road between Port Edward in KwaZulu-Natal and Umtata

in the Eastern Cape.

The CME JV (Concor – MECSA Construction Joint Venture) is the

main contractor and it has had to stop work more than once because of

protests of various sorts. Environmentalists don’t like the idea of this part

of the Wild Coast becoming more accessible to miners and tourists and

local residents have protested more than once about what they claim

are unfulfilled promises of jobs on the building project.

The project will see the construction of two mega-bridges on the

Msikaba (pictured) and Mtentu Rivers, seven other river bridges and

several interchange bridges, as well as a new intersection, interchanges,

pedestrian walkways and under- and overpasses for the use of farmers

and for their stock.

In addition, sophisticated techniques are required to ensure that the

580m cable-stayed structure, which will span the 198m-deep Msikaba

Gorge, is stable. The deck will be supported by 34 cable tendons

connected to two 128m-high pylons. Winds have been known to blow

at 100km/h at the site.

SECTOR INSIGHT

A call has been made for

consulting engineers to unite.

The CEO of Consulting

Engineers South Africa (CESA) has

called for a united front to help

the sector fight its corner. Chris

Campbell has noted that the

country has “countless industry

bodies” including, but not limited

to, ECSA, SAICE, SABTACO, NSBE

and SAIEE. Campbell referenced

an earlier overarching body,

the South African Forum for

Engineering (SAFE) as a model.

Such a body would be able to

take an industry-wide position

on issues such as the contentious

issue of Cuban engineers working


64

OVERVIEW

on South Africa’s water system. The Engineering Council of South Africa

(ECSA) regulates the industry through professional registration and the

standardisation of tertiary qualifications. South Africa is the only African

member of the International Engineering Alliance (IEA).

An Investment and Infrastructure Office has been created in the

Presidency. It is headed by the former Gauteng MEC for Economic

Development, Dr Kgosientso Ramokgopa. In 2020, 51 infrastructure

projects with a total investment value of more than R340-billion

were gazetted and hopes are high that this initiative will provide a

boost for engineering firms. A study carried out by KMPG found that

spending on infrastructure resulted in additional economic activity

worth R26-billion and created 92 000 direct jobs.

The Renewable Energy Independent Power Producer Procurement

Programme (REIPPPP) has created an entirely new industry in less than

seven years, with investment of about R200-billion in solar parks and

wind farms. This has created many opportunities for engineers.

Marine repair and engineering form a significant sector in the Western

Cape and KwaZulu-Natal, with established companies such as EBH

South Africa offering comprehensive services. Both KwaZulu-Natal ports

are expanding and will continue to attract engineers.Dormac, which is

ONLINE RESOURCES

Consulting Engineers South Africa: www.cesa.co.za

Engineering Council of South Africa: www.ecsa.co.za

South African Consulting Engineering Firms: www.consultsa.co.za

Southern African Institution of Civil Engineering: www.civils.org.za

headquartered in the Bayhead

area of the Port of Durban, is best

known for its marine engineering

but it offers specialised services to

the sugar industry and provides

machinery for industrial giants like

Toyota and Defy.

The Engineering Council of

South Africa has a programme

where trainees can earn

certificates in specific disciplines

from a range of institutions. The

qualifications are in line with the

council’s Exit Level outcomes. Six of

South Africa’s biggest construction

companies have established a

R1.25-billion skills fund. Several

partnerships between the public

and private sectors are trying

to address the skills deficit. The

Skills Development Amendment

Act is intended to improve the

situation. Universities, universities

of technology and companies

are increasing their focus on the

training of engineers. ■

SUPPLYING INDUSTRIAL AND

SPECIALTY GAS PRODUCTS TO THE

SOUTHERN AFRICAN REGION

www.airproducts.co.za

OVERVIEW

Manufacturing

Innovation and expansion are happening in textiles.

SECTOR INSIGHT

Government master

plans aim to bolster local

production.

Special jeans for a special occasion. Designer Tshepo Mohlala, who

created bespoke Tshepo Jeans for the inauguration of Sappi’s expansion

project made from imported denim containing Sappi’s Verve Lyocell

blend pulp, shakes hands with Ebrahim Patel, Minister of Trade, Industry

and Competition. Looking on are Alex Thiel, CEO of Sappi Southern

Africa, the Premier of KwaZulu-Natal, Nomusa Dube-Ncube, and

President Cyril Ramaphosa. Credit: Sappi

Sappi has spent R7.7-billion on expanding its dissolving

pulp plant in KwaZulu-Natal. The project aims to boost

the annual production capacity of dissolving pulp (DP)

at Saiccor Mill by an additional 110 000 tons annually,

taking production to 890 000 tons a year and reinforcing the

company’s position as the world leader in the manufacture of

Lyocell, a cutting-edge material of the future.

Lyocell is a form of rayon consisting of cellulose fibres made from

dissolving pulp that is reconstituted by dry jet-wet spinning. The fully

biodegradable and compostable fibre is used to make textiles.

TFG is ramping up production of clothing and expects to increase

staff from just over 3 000 to more than 5 000 going in to 2023. TFG,

which counts Foschini, TotalSports and Markhams among its brands,

has been buying up clothing factories for nearly a decade and is now

in a position to respond more quickly to fashion trends than when it

was more dependent on imports.

Among TFG’s acquisitions

were Prestige Clothing Maitland

and Prestige Clothing Caledon.

The group then spent R75-

million on expanding the

factory in Caledon.

TFG plans to significantly

increase the percentage of

locally-made clothing items

from the current level of 35% to

55%. In 2020, the group made

12-million garments and is

aiming for 30-million by 2025/26.

The Manufacturing and

Competitiveness Enhancement

Programme (MCEP) of the

Department of Trade, Industry

and Competition (the dtic)

has disbursed grants which

have resulted in 230 000 jobs

being “sustained”. Because

of the Clothing and Textile

Competitiveness Programme,

that sector currently now

employs around 95 000

workers, contributing 8% to

manufacturing GDP and 2.9%

to overall GDP. In the leather

sector 22 new factories have

been opened, supporting 2 200

jobs. In the Western Cape, this

revival is reflected in member

companies of the Cape Clothing

and Textile Cluster hiring 35%

more staff in four years. About

23 600 people are employed in

the province and exports from

the Cape are on the increase.


66

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OVERVIEW

The Aspen Pharmacare facility in Gqeberha

readied itself to make hundreds of millions of

doses of the Johnson & Johnson Covid-19 vaccine

for South Africa and Africa but the orders didn’t

come. As of April 2022, no orders had been

received and there was a danger that the facility

would close down that section. The Africa Centres

for Disease Control and Prevention was concerned

about that possibility, and urged African states to

order vaccines, partly to keep the capacity to make

large volumes of vaccines in a state of readiness. It

was anticipated that as many as 500-million doses

would be made annually.

A consortium of development finance

organisations, including the World Bank’s

International Finance Corporation, made

€600-million in financing available to the South

African company to assist it in ramping up

production of the vaccines.

In Johannesburg, global pharmaceutical

company Mylan has purchased a manufacturing

site, previously used by Ascendis Health, to make

antiretrovirals to cater to the seven-million South

Africans living with HIV. The Isando factory will

produce effervescent tablets, semi-solid and hard

capsules and pills.

A new tender for a national supplementary

HIV/Aids drug tender, which was previously

awarded to foreign companies, is to be issued,

opening up opportunities for local manufacturers

such as Cipla Medpro. The three-year tender is

worth R18.3-billion.

Pirates off the west coast of Africa are

driving an increase in boatbuilding in South

Africa. Companies like Paramount Marine which

specialise in security boats are receiving many

orders. In 2021, the company announced that

its Cape Town facility was making 26 boats for a

contract price of more than R850-million.

PG Bison, a subsidiary of KAP Industrial

Holdings, is investing more than R2-billion

at its plant in Mkhondo in Mpumalanga. With

operations in four provinces ranging from

forestry to the manufacture of medium-density

fibreboard (MDP), particleboard and valueadded

products, PG Bison is also building a new

MDP plant in Mpumalanga to complement its

existing Gauteng facility.

Sectoral master plans

The South African government believes that

the existing Proudly South African campaign

– which encourages the purchase of locallymade

goods – is something to be supported

and expanded.

Government has identified 27 sectors in

which government departments will aim to

procure from local suppliers. Speaking at the

Proudly South African Summit and Expo 2021,

President Ramaphosa said: “There is an express

undertaking to increase local procurement

over the next five years. Apart from its own

commitments, government will also work to

lower the barriers to entry, thereby making

it easier to establish and grow a business in

South Africa.”

Government is in the process of rolling out

master plans for various sectors. Some (including

furniture and plastics) are still in the works but

others have been delivered.

Goals include:

Automotive: to double the number of jobs by

increasing local content percentages

Clothing, textile, footwear and leather:

R500-million from the state for expansion of

manufacturing sites

Poultry: more than a million extra chickens

every week for retail

Sugar: soft drink manufacturers to procure 80%

from local growers. ■

ONLINE RESOURCES

Chemical and Allied Industries’ Association: www.caia.co.za

Manufacturing Circle: www.manufacturingcircle.co.za

South African Textile Federation: www.texfed.co.za


68

Construction and property

The renewable energy sector has opened up new workstreams.

The uptick experienced by the building and home

improvement sector during Covid-19 came to an end in

2022 as customers were no longer forced to spend time

at home.

However, Afrimat’s Construction Index showed in the second

half of 2022 that a number of other indicators were trending

upwards: plans passed, buildings completed, wholesale trade

and building materials. Also, a Financial Mail interview with

Raubex CEO Rudolf Fourie in late 2021 produced an upbeat

assessment of the construction industry in South Africa.

In response to Giulietta Talevi’s question about “future

prospects”, Fourie said that tender activity was “buoyant” and

that the company’s order book stretching beyond two years was

something they had not seen in three decades.

Raubex is active in infrastructure, roads and earthworks

and materials. Like many South African companies, Raubex is

now also present in the burgeoning renewable energy market,

offering civil works and electrical installations at projects such as

the Redstone CSP project and Copperton wind farm (pictured) in

the Northern Cape.

For the year ending 28 February 2022, Raubex reported an

increase of 30.9% to R11.58-billion and an increase in operating

profit to R945.3-million.

Covid-19 provided a sharp shock for many business sectors,

but with the move towards working from home accelerated by

the pandemic, none is going to have to look harder at its models

for sustainability than the office rental sector.

Logistics, often taken for granted in normal times, became an

even more important component of the supply chain during the

global lockdown and in the months that followed, with the second

ONLINE RESOURCES

Afrimat Construction Index: www.afrimat.co.za

Construction Industry Development Board: www.cidb.org.za

SA Reit Association: www.sareit.co.za

South African Property Owners Association: www.sapoa.org.za

SECTOR INSIGHT

Home improvers are not at

home as much as they were

under lockdown.

half of 2021 characterised by

blockages and delays. In that

context, the news that Fortress

REIT had successfully let more

than 100 000m² of logistics

space in KwaZulu-Natal, was

significant. FNB, which publishes

a regular property barometer,

has done an in-depth analysis

of previous crises to help

understand what may occur

in the post-Covid property

market. According to John Loos,

a property strategist at FNB

Commercial Property Finance,

the most vulnerable sector

is likely to be Retail Property.

Smaller neighbourhood centres,

with more essential items and

greater convenience, will be

less vulnerable. Statistics SA has

found that the percentage of

South Africans living in flats

has risen markedly. Whereas 26

out of 100 approved plans in

2013 were for flats, this figure

reached 59 in 2016. Although

the total number of people

living in flats is still relatively

small (5.4%), this figure will rise

as urbanisation increases. ■


OVERVIEW

Transport and logistics

The value of goods transported along the N3 continues to grow.

SECTOR INSIGHT

Private investors are

sought to improve roads,

railways and ports.

Defy’s new warehousing and distribution centre in Danskraal,

Ladysmith (pictured), is more evidence of the importance

of the N3 Corridor that carries enormous amounts of cargo

between Johannesburg and Durban.

The new facility represents a R170-million investment into the

area and will create more than 130 jobs. The warehouse can process

the loading and unloading of more than 200 trucks per day and has

a storage capacity of 100 000m³ of product. The strategic location

of the distribution centre creates the opportunity to move product

by rail from the Ezakheni manufacturing facility to the Durban port

250km away. Since 2012, Defy has invested approximately R642-

million into the Ladysmith economy.

Studies have shown that up to 45 000 vehicles use the N3

highway on a normal day, and that figure can rise to 130 000 in busy

times. More than 75-million tons worth of freight is carried annually

along the route.

The Harrismith Logistics Hub at the Maluti-A-Phofung SEZ on the

N3 is an inland port that can handle cargo containers and shift cargo

from road to rail, reducing congestion and costs.

State-owned Transnet is expanding its programme to get the

private sector involved in the country’s railways, ports and terminals.

Because of the dynamics of

South African politics, this

can never be referred to as

“privatisation” in any shape or

form, but the trend towards

having private companies

involved in some way is

increasing.

To run two of biggest

container terminals (in Durban

and at Ngqura), the plan is to

create a special purpose vehicle

that includes new subsidiary

of Transnet National Ports

Authority (TNPA), Transnet

employees and a private

operator. This SPV would run the

terminals on a 25-year contract.

A R100-billion master plan

is intended to underpin the

upgrade of the Port of Durban on

the back of private investments

linked to contracts. South Africa

has 8 000km of rail line that is

defined as a “branch line”. These

are typically smaller lines serving

a particular farming or mining

area and transporting a single

commodity, such as wheat.

Transnet Freight Rail

announced in April 2022 that

16 slots would be available for

private operators, including six

between Johannesburg and

Durban and eight between

Springfontein in the Free State

and East London. However, the

suggested contract period – two


70

FOCUS

years – almost guarantees that no investor will touch

the project. The cost of investment would be too

high against the short period in which returns might

be made.

Despite uncertainties such as this, the private

sector seems quite bullish, with trade in shares

of logistics companies (Zeder Investments sold

its share of The Logistics Group to Old Mutual

Infrastructure for R1.6-billion) and interest being

shown in Imperial Logistics by foreign buyers such

as Dubai-based DP World.

Transnet Freight Rail’s operations represent

about 80% of Africa’s rail infrastructure. With

25 000 employees TFR has specialist divisions

for hauling coal and iron ore together with

a general freight division which transports

everything from grain to chemicals.

While there is concern about the performance

of South Africa’s ports in getting goods in and

out in the best possible time, a record was set in

2020 by Transnet Freight Rail in transporting 66

train lots and 3 662 FEU reefer containers from

Limpopo and Gauteng to the Port of Durban.

The Citrus Growers Association was very happy

about this, which represented a 20% increase on

the previous year’s volumes and was some way

towards the target of 15 000 reefer containers.

A mandatory automated truck booking

system has been introduced at Durban Container

Terminal Pier 1 and Pier 2, while the Grindrod, FPT

and Bulk Terminal depots have also piloted their

own booking systems.

The building of the Musina-Makhado Special

Economic Zone (SEZ) will boost Limpopo’s role

as a transport and logistics hub. The Musina

Intermodal Terminal is 15km from the busy Beit

Bridge border crossing. It will boost efforts to

move cargo from road to rail.

The Maputo Development Corridor is Africa’s

most advanced spatial development initiative. Run

by the Maputo Development Corridor Logistics

Initiative (MCLI), the corridor runs from near

Pretoria in Gauteng toMaputo in Mozambique.

South Africa’s logistics and courier market is

worth R10-billion.

Transport systems

Large amounts of money are to be spent on

various forms of public transport in the short term.

Investments in rapid transit systems in the big

metropolitan areas of Johannesburg and Cape

Town are now being followed by other South

African cities such as Polokwane and Rustenburg,

the Gautrain is looking to expand its routes, and a

taxi infrastructure programme is in place.

In Limpopo’s provincial capital of Polokwane,

operations of the Leeto La Polokwane public

transport system were launched in 2021. In the

North West, the Rustenburg Rapid Transport

Project (Yarona) aims to integrate busses, taxis and

improved pedestrian access throughout the city.

The South African Department of Transport

has several agencies and businesses reporting

to it: Air Traffic and Navigation Services

Company, Airports Company South Africa

(ACSA), National Transport Information System,

Road Accident Fund, South African Civil

Aviation Authority, South African Maritime

Safety Authority (SAMSA), South African

National Roads Agency Limited (Sanral) and

Passenger Rail Agency of SA (PRASA).

Several airports are possible future regional

freight nodes: Wonderboom Airport in Pretoria,

Polokwane International Airport in Limpopo

and Mafikeng.

South Africa has 22 000km of railway lines and

747 000km of roads, 325 019 heavy-load vehicles

and the road freight industry employs 65 000 drivers.

There are 135 licensed airports in the country, 10 of

which have international status. ■

ONLINE RESOURCES

African Rail Infrastructure Association (ARIA): www.aria.org.za

Airlines Association of Southern Africa: www.aasa.za.net

South African Heavy Haul Association: www.saheavyhaul.co.za


OVERVIEW

Tourism

Swiss investment may underpin expansion.

SECTOR INSIGHT

Marriott International has

sold more properties.

The International Hotel School (HIS), which has campuses

in six South African cities, is now part of the Swiss group,

Sommet Education, following the acquisition by the

European company of Invictus Education Group. Invictus

also runs the SAE Institute in Cape Town and Johannesburg, where

the focus is animation, audio and film. The Sommet Education

connection, which includes the Gilon Institute of Higher Education

among its brands, will allow for more rapid expansion in other parts

of Africa for the IHS and SAE brands.

Three Gauteng hotels have changed ownership from Marriott

International to Anew Hotels & Resorts. Writing in the Sunday Times,

Arthur Goldstuck ascribed this success for the South African family

group to “the very fact that it has a local base and focus has given it

an edge”. The three hotels were the Parktonian (Johannesburg), Hotel

Roodepoort and what is now called the Anew Centurion. Anew now has

11 properties in its portfolio.

Earlier, when the Marriott International hotel group closed three

of its South African hotels during the Covid-19 lockdown, Tsogo Sun

Hotels, which owns a controlling stake in all three hotels, stepped up

its commitment by agreeing to bring them into its portfolio, keep them

open and run them.

Hospitality Property Fund Limited delisted from the JSE in 2021

and became a wholly-owned subsidiary of Tsogo Sun Hotels Limited,

ONLINE RESOURCES

African Business Travel Association: www.abta.co.za

South African National Parks: www.sanparks.co.za

South African Tourism: www.southafrica.net

giving Hospitality shareholders

shares in a more liquid stock and

the hotel group an expanded

property portfolio. Most of

Hospitality’s 54 properties

(with about 9 000 rooms) were

operated by Tsogo Sun.

South African National Parks

(SANParks), which runs nearly 70%

of South Africa’s 509 state and

protected areas, has a number

of public-private partnerships

and held an investment summit

in 2022 to showcased a further

100 opportunities in 12 national

parks. There are currently 60 PPPs

in operation in South Africa.

Sun City announced in

October 2022 that it would spend

about R1.1-billion on projects at

its Sun City Resort.

The R295-million Lefika Villas

development will see 58 three

and four-bedroom villas added

to the resort’s accommodation

options for members of Sun

International’s Sun Vacation Club.

The Palace (pictured) will gain a

spa and a gymnasium and 320

bedrooms are to be refurbished.

There are 711 745 people

employed in the tourism industry

nationally, with road transport

(29%), food and beverages (20%)

and accommodation (19%)

absorbing the largest numbers.

The sector contributes 9% to

South Africa’s gross domestic

product (GDP). ■


72

OVERVIEW

ICT

Government’s latest mobile contract is shared by four companies.

As of 2021, National Treasury has appointed four companies

as service providers to government, through its new mobile

communication services contract, known as RT15-2021. The

contract covers all entities of the state and is expected to

allow for significant cost saving through better controls.

The contract, which was previously held by Vodacom, is

now shared between Cell C, MTN, Telkom and Vodacom. The

transversal contract is for uncapped data for different categories

of employees and includes mobile devices for packages from

all service providers. Nearly 450 organs of state participated in

the previous contract. This included 38 national departments, 99

provincial departments, 106 local government departments and

207 other state institutions.

South Africa has not only been home to many pioneering

banking apps on mobile phones, but the country’s operators

continue to offer unprecedented innovation and levels of

service. Arthur Goldstuck noted these trends in September 2022,

further pointing out that the Reserve Bank will also speed up

EFTs between banks with the introduction of a Rapid Payments

Programme. Bank Zero not only uses biometric authentication

for logging in, but offers zero-cost banking. Both MTN and

Vodacom are offering much more sophisticated apps than when

they first ventured into fintech: MTN MoMo has diverse offerings

and VodaPay encompasses payment, lending, insurance and

cash for emergencies.

Invicta Holdings, an investment holdings and management

company, has expanded into the fibre field at a time when working

from home has massively increased the demand for data. Invicta

acquired Dartcom Group for R500-million, giving it a presence in the

ONLINE RESOURCES

Business Process Enabling SA: www.bpesa.org.za

Independent Communications Authority: www.icasa.org.za

Technology Innovation Agency: www.tia.org.za

Credit: Caspir Camille

Ruben on Unsplash

SECTOR INSIGHT

South African banking

apps are world class.

distribution of communication

and renewable technologies

and the manufacture of fibre

optic cables (under licence

from Japan). As South Africa

joins the global trend towards

online shopping and with the

first networks rolling out 5G in

2020, data centres are going up

all over the country. The latest

to join the trend is software

company Oracle which has

chosen Johannesburg as the

headquarters of its African cloud

region. All of the company’s

cloud regions worldwide will be

100% powered by renewable

energy by 2025.

Teraco stores data in

Johannesburg, Durban and

Cape Town. A second 30MW

site is under construction in

Brackenfell to complement the

existing facility in Rondebosch.

Africa Data Centre (ADC), part of

the Liquid Telecom Group, has

purchased a Tier IV data centre

in Johannesburg, previously

used by Standard Bank.

The Council for Scientific

and Industrial Research (CSIR)

in Pretoria will host a new

body aimed at preparing South

Africa for the Fourth Industrial

Revolution (4IR), the South

African Affiliate Centre of the

World Economic Forum. ■


74

Banking and financial services

African Bank is on the acquisition trail.

OVERVIEW

Banking and financ

African Bank has signalled that it is ready to grow, with SECTOR INSIGHT

an agreement to buy Grindrod Bank and an R80-

Advisory companies that

million deal to purchase lender Ubank.

enabled state capture are

After going into administration in 2014, Mutual African banks facing have sanctions. been granted licences.

Bank took some time to recover and is still half-owned by the

Reserve Bank but it has materially added to its retail client

base and the addition of more than 4.5-million clients with

the purchase of the troubled Ubank, which had as its base

mine workers, will further strengthen its position. The R1.5-

billion purchase of Grindrod Bank gives African Bank a stronger

position in business lending.

Consulting company Bain & Company has been excluded

from British government contracts for three years because of

the role the company played in the evisceration of the South

African Revenue Service in the time of state capture. Although

the Zondo Commission on state capture found that KPMG and

McKinsey also enabled state capture, no such strictures have yet

been applied by the South African government.

Discovery Bank reported in June 2022 that it was signing up 750

new clients every day which puts it on course to achieve more than

600 000 customers by 2024. The bank, which launched in Ubank, 2019, has and with renewable a history energy, of catering a fast-tgrowing by the sector South with African enormous Reserve Bank

minew

already opened more than one-million accounts. Early in 2022, long-founterm insurer and asset manager Liberty delisted from the JSE and was unacceptable potential. Naspers Foundry is

integrated into the Standard Bank Group.

one of several capital investment adequacy funds

ratio in May 20

consequently placed under curatorship.

The New Development Bank, established to fund infrastructure Teba Trust looking Fund, which for opportunities owns Ubank, in was activ

projects in BRICS countries, had approved loans of $5.1-billion a strategic to investor the financial when sector. the curatorship Insurance was anno

be spent in South Africa by July 2022. This included renewable administrators technology of the fund is are of the particular National Union of M

energy projects and the Port of Durban upgrades. (NUM) and Minerals interest, Council together SA. One with of the credit banks being

The launch by Sanlam Investments of a Sustainable Infrastructure the South African services arm and of Nigeria’s payment Access systems. Bank Group a

Fund is a sign of the times. The South African state has promised Council SA remains Capital positive Appreciation, about the future which of the ban

a huge infrastructure drive but in the context of climate change Despite the is collapse part-owned of VBS by Mutual the Public Bank in 2018, the

caused by the use of fossil fuels, the investment community mutual banks is is Investment strong, given the Corporation, nature of the is South African

increasingly putting emphasis on sustainability. Sanlam Group Young will Women already in Business invested Network in a (YWBN) software has been gran

invest R6-billion in the fund and aims to attract a further R5-billion bank licence and developer, Bank Zero also a intends credit to use card the mutual m

from institutional investors. Investments will be made in housing, Tyme Digital payment went from terminal acquiring provider a licence and to runnin

transport, health, water, waste, communication, conventional with energy services has available R500-million in more than available 500 Pick for n Pay and

in less than two further years. investments. African

ONLINE RESOURCES

Second to Rainbow market among Capital the has country’s a stake new in banks w

the investment company and is

Financial Sector Conduct Authority: www.fsca.co.za Bank, which officially launched in 2019 and is experie

Insurance Institute of South Africa: www.iisa.co.za growth in retail the deposits. owner of Discovery TymeBank, Bank which is applying the

South African Institute of Chartered Accountants: www.saica.co.za model it uses received in its health a banking business licence to in reward goo

behaviour. The 2017 Discovery and expanding group is already rapidly. ■a giant on t

ONLINE RESOURCES


Financial Sector Conduct Authority: www.fsca.co.za

Public Investment Corporation: www.pic.gov.za

South African Reserve Bank: www.resbank.co.za

OVERVIEW

Development finance and

SMME support

Expanding small business has become big business.

SECTOR INSIGHT

More than 30 small businesses

supply services to a mine in

northern Limpopo.

The number and scope of the Business Day Supplier

Development Awards gives an indication of how developed

this aspect of support for small enterprise has become in the

South African business community. The process of helping

small businesses become bigger businesses has sparked creativity

across sectors such as retail and mining and collaboration with other

companies has become the norm in promoting supplier development.

A fairly new initiative, the HandPicked programme of the Mr Price

Foundation, has no fewer than five partners in African Grower, CHEP,

Fresh Life Produce, Veldskoen and Catalyx. These partners cover urban

or vertical farming, logistics, developers and implementers of a growing

system for urban areas, shoe manufacturing and training. Young people

interested in agriculture are trained in innovative farming techniques

and business skills with the goals of tackling food security, eliminating

poverty and hunger and promoting good health and well-being.

The list of winners from 2021 points to how important and varied

supplier development has become in the SMME environment.

2021 Winners

Credit: Dipuno Fund

Overall Winner – award sponsored by Absa: Tiger Brands.

Agri supply-chain development includes agri-procurement access,

import replacement, funding support, land-access support and agrarian

technical support using an aggregator model with strategic partners that

enable small farmers to benefit while developing black mega farmers.

Tiger Brands launched the Dipuno Enterprise and Supplier Development

Fund in 2019, committing R100-

million in investment by 2025 to

black-owned and black womenowned

small enterprises and

smallholder farmers. Initiatives

are underpinned by strong

collaborative partnerships with

government, colleges, mining

houses and their pipeline partners.

There is a focus on technology

investment.

Localisation Award: The Empact

Group, which collaborates with

local agricultural departments

to bring opportunities to local

farmers, straight into their local

and Gauteng supply chain outlets.

Outstanding Growth in a

Small Supplier Award: Exxaro.

In 2019, in response to the

pandemic, Exxaro invested and

allocated R200-million to ESD

transformation. MBR was one of

the companies that benefitted as

Exxaro provided MBR with a zerointerest

loan of R25-million to

acquire mining operations assets.

Newcomer Award: Uyandiswa

Innovation Award: V&A

Waterfront

Youth Focus Award: Anglo

American Zimele

Women Focus Award: sponsored

by Cold Press Media: The Empact

Group

SOUTH AFRICAN BUSINESS 2023 76

OVERVIEW

Rural and Township Focus Award: the SPAR Rural Hub model

Emerging Technology Award: Exxaro Resources

Collaboration Award – sponsored by Fetola: Tiger Brands

The Covid-19 Recovery Award: Distell

Small Supplier Award – sponsored by IDC: Distell, in partnership

with supplier Stellar Wines.

Most big companies in South Africa have two main programmes

to support SMMES: enterprise development (ED) and local supplier

development (or procurement). Venetia Mine in northern Limpopo,

a De Beers Group mine, has more than 50 SMMEs enrolled in

incubation programmes and 34 locally-owned companies are doing

business with the mine.

Covid scheme

An amount of R15-billion was made available by national government

for businesses adversely affected by Covid-19 and the unrest and

floods that hit KwaZulu-Natal in 2021, but Treasury announced in

August 2022 that only R77-million of this “bounce back” scheme had

been disbursed out of a total of R140-million in loans approved. Any

small business is eligible for the loans, irrespective of whether or not

it was directly harmed by one of the bad events, but a combination

of other events such as loadshedding and higher interest rates had

discouraged uptake.

A R200-billion loan guarantee scheme (LGS) was made available

for firms with a turnover of less than R300-million per year. This

scheme received very few applications and so the criteria were relaxed

although money can still only be used for operations. Treasury will also

now take responsibility for the first 20.5% of default losses, in contrast

to the first iteration whereby banks had to take that loss. While the

“bounce back” scheme allows businesses to change the terms of the

loan (by extending it, for example), the LGS is a fixed-term loan.

National programmes

The National Department of Small Business Development (DSBD) has

several programmes to assist SMMEs and co-operatives.

ONLINE RESOURCES

Business Day Supplier Development Awards: www.sdawards.co.za

National Department of Small Business Development: www.dsbd.gov.za

Small Business Institute: www.smallbusinessinstitute.co.za

Small Enterprise Development Agency: www.seda.co.za

The Small Enterprise Development

Agency (Seda), a subsidiary of the

DSBD, has 42 incubation centres

under its Seda Technology Programme

(STP). In Mpumalanga, Seda supports

several incubators: Furntech, furniture

manufacturing, White River; Mobile

Agro-Skills Development & Training,

agricultural training, Nelspruit;

Mpumalanga Stainless Initiative (MSI),

stainless-steel processing, Middelburg

(with Columbus Stainless); Timbali

floriculture, Nelspruit; Ehlanzeni TVET

College Rapid Incubator Renewable

Technologies, Nelspruit.

In the North West, the Provincial

Government is investing in digital

infrastructure. SMMEs will be able to

use the newly-established Mafikeng

Digital Innovation Hub as a co-working

environment and to get support in

using digital tools. The South African

National Roads Agency Limited

(SANRAL) actively supports small

businesses wherever it works in South

Africa. Subcontracts are routinely

awarded for maintenance such as the

patching of potholes, fencing and the

cutting of grass verges.

Part of the rationale behind a

national programme to revive industrial

parks is to benefit SMMEs. The National

Department of Trade, Industry and

Competition (the dtic) has invested R40-

million in the Nkowankowa Industrial

Park in Limpopo, an initiative which has

helped to create 174 direct jobs. In the

northern reaches of the province, more

than 300 jobs have been created with

the revitalisation of the Thohoyandou

Industrial Park, which has achieved a

91% occupancy rate.

The dtic is trying to stimulate

township and rural economies through

programmes such as the Enterprise

Investment Programme (EIP). ■

77


OVERVIEW

Education and skills training

Private education companies are growing

JSE-listed companies are doing well in the education

sector. ADvTech reported a 22% increase in operating profit

in the year to December 2021 and Curro Holdings’ revenue

increased by 15.5% to R2.06-billion for the six

months to the end of June 2022.

With brands such as Crawford, Trinity House,

Crawford House, Abbotts College, Varsity College and

Vega in its stable, ADvTech made that operating profit

of R1.1-billion on increased revenues of R5.9-billion.

Enrolments in South African schools run by the

company rose by 8% (to 29 599) and by just over

7 000 in other African countries, or 10%. The group

intends increasing its focus on the rest of Africa in

the years ahead.

Curro Holdings, which runs 181 schools, increased

pupil numbers by 66 167 for the six months to June 2022.

This despite an increase in tuition fees of 13.3%. Curro

has been expanding steadily since its establishment in

1998, and the same trend is evident in the trajectory of its

tertiary offshoot, Stadio Holdings.

Stadio Holdings listed separately for the first

time in 2017 and now has more than 41 000 students registered

across three institutions. Milpark Education is the online offering,

AFDA offers accredited degrees and higher certificates in film,

performance, entertainment, business and technology while Stadio

Higher Education Institution is the result of the merger of Southern

Business School, Embury Institute for Higher Education, LISOF and

Prestige Academy.

Interim results published by Stadio Holdings in August 2022 reported

that profit after tax rose by 23.5%, to R105-million. A R200-million Stadio

campus was opened in Centurion in Gauteng early in 2022.

Skills

In November 2023, the Decade of the Artisan Programme will have

run its course. The Department of Higher Education and Training set

targets for skilled graduates and established Centres of Specialisation

at Technical Vocational Education and Training (TVET) colleges around

the country.

For example, False Bay TVET College was appointed as the

Centre of Specialisation in Rigging and Mechanical Fitting, both

skills highly relevant to the maritime industry. The Eastern Cape

SECTOR INSIGHT

The Decade of the Artisan

is drawing to a close.

Stadio’s new campus in Centurion.

Midlands TVET College

specialises in welding and the

Gert Sibande TVET College in

Mpumalanga is the institution

that focusses on the skills of a

millwright.

Centres of Specialisation aim

to produce:

• A skilled and capable workforce

• Increased availability of intermediate-level

technical skills

• Increased delivery of qualified

artisans in 13 priority trades

Speaking at the opening

ceremony of the WorldSkills

South Africa (WSZA) National

Competition in KwaZulu-Natal

in June 2022, Higher Education

and Training Minister Dr Blade

Nzimande called on principals


78

OVERVIEW

of TVET colleges to prioritise work placements

for students. He said, “We have now incorporated

into our plans that all college principals must have

the issue of work placement and partnership with

industry in their performance agreements. Any

college principal who does not promote work

placement has no place in our TVET college system.”

Venetia Diamond Mine in the far north

of Limpopo is in the process of transitioning

from surface to underground mining and that

requires a new set of skills from employees and

contractors. Six simulators are being installed

at a new training centre for the mine, covering

aspects such as drills and bolters while virtual

reality will be deployed for a virtual blast wall.

More than 300 training modules will be available.

Universities

There are three types of public universities in

South Africa: traditional universities, which are

academic in focus and award degrees; universities

of technology (previously “technikons”), which have

a vocational emphasis and can award diplomas and

certificates; and comprehensive universities which

offer a combination of both types of qualification

and can confer degrees and diplomas.

The addition of two universities in the

provinces of Mpumalanga and the Northern Cape

means that every South African province now has

a university.

In Mbombela, the phase of using old

buildings has come to an end for the University

of Mpumalanga. Now a striking new architectural

addition has been added to the cityscape on a

hill north of the Crocodile River: a complex of

department headquarters and residence buildings

ONLINE RESOURCES

Centres of Specialisation: www.dhet.gov.za

National Department of Science and Innovation:

www.dst.gov.za

Sol Plaatje University: www.spu.ac.za

TVET colleges: www.tvetcolleges.co.za

University of Mpumalanga: www.ump.ac.za

is taking shape as a new home to the province’s

first university. By building on existing institutions

such as teacher training colleges, the university has

progressively offered more courses and taken on

more students over the last few years. The official

launch was in October 2013, with the first cohort of

169 students registered in just three programmes

in 2014. By 2020, the university was offering 26

qualifications to 4 200 students.The university

currently offers 48 programmes in three faculties:

Education; Agriculture and Natural Sciences; and

Economics and Business Sciences. There are plans

to add new programmes at both undergraduate

and postgraduate levels and to establish the faculty

of Humanities and Social Sciences and the School of

Law. By 2024, the plan is to offer approximately 70

qualifications to over 8 000 students.

University of Mpumalanga students have

distinguished themselves in competitions run

by ENACTUS, an international organisation

that works with leaders in business and higher

education to mobilise university students to

make a difference in their communities while

developing the skills to become sociallyresponsible

business leaders

The first intake of students at the Kimberley

campus of Sol Plaatje University in 2014 was 124.

At the 2019 graduation ceremony, 319 students

were congratulated and when classes began for

the 2020 academic year, just over 700 first-time

students enrolled. In 2022, the SPU expects to

have in the region of 3 479 students, of which

339 will be new postgraduate students.

The academic programme is housed in four

schools: Education; Humanities; Natural and

Applied Sciences; Economic and Management

Sciences. Bachelor’s degrees are offered in

education, science, science in data, ICT, heritage

studies, commerce and arts. A diploma in retail

business management (three years) and a

one-year higher certificate in heritage studies

completes the prospectus.

In 2022 the university tweaked its brand, with

an internal logo falling away and the colour black

being replaced by navy blue, joining red, orange

and beige as the corporate colours. ■

79


A STUDENT RECRUITMENT INITIATIVE TO ATTRACT

ACADEMICALLY TALENTED RURAL STUDENTS TO

REGISTER AT SOL PLAATJE UNIVERSITY

SINCE ITS INCEPTION IN 2013, SOL PLAATJE UNIVERSITY (SPU)

HAS MADE SIGNIFICANT PROGRESS AND HAS GROWN TO BECOME

A PERMANENT PRESENCE IN KIMBERLEY, THE NORTHERN CAPE,

AND THE SOUTH AFRICAN HIGHER EDUCATION SECTOR.

Sol Plaatje University is still developing as a

university, and faces significant challenges in

meeting the steep student growth targets that

the institution agreed to with the government.

The demographics of both the student body and its graduates

suggest that SPU attracts students from all nine provinces, with

the main concentrations being from the major towns in the

Northern Cape and the North-West Provinces. There is however

a challenge in attracting students from rural areas.

The Northern Cape and North West Province are two of the

largest and most sparsely populated provinces in South Africa.

The economic drivers in these provinces are mainly mining and

agriculture, but new economies around the Square Kilometre

Array project and alternative energies are emerging.

Many rural learners are caught in the poverty trap after

finishing their high school education because they cannot find

opportunities within these major or emerging economies.

Therefore, a lot of talent is lost because these learners,

although talented, are precluded from going to University.

In the absence of any sort of stimulus plan for education that

will level the playing field for rural learners regarding access

to higher education, Sol Plaatje University wants to create a

pipeline of academically talented learners from rural areas and

see them register for a tertiary qualification at the University.

RESEARCH HAS SHOWN THAT A SINGLE GRADUATE

FROM A UNIVERSITY, HAS AN IMMEDIATE IMPACT ON

THE LIVES OF TEN OTHERS WHEN THEY RETURN TO

THEIR COMMUNITY.

ONE GRADUATE FROM A RURAL COMMUNITY

CAN BE A CATALYST FOR ECONOMIC GROWTH!

TALENT PIPELINE

PROGRAMME

The Talent Pipeline Programme (TPP) at Sol

Plaatje University is a pre-university enrichment

programme aimed at increasing the academic,

social, and psychosocial preparation of learners

to enter higher education.

We will identify the top ten performing learners in

grades 10, 11 and 12 from a broad range of underresourced

schools in the Northern Cape Province.

The learners will be accommodated at the University

during their school holidays (one week in March,

two weeks in June and one week in September) and

participate in a programme that focuses on a psychosocial,

educational enrichment curriculum of deep immersion in

ten subject areas: Mathematics, Scientific Thinking,

Science, Molecular Literacy, Computer Science,

Language, Economics and Law, Diversity Studies and

International Relations. The academic instruction will be

accompanied by a personal skills development curriculum

(life skills, sport, art and music) focusing on coping and

success mechanisms.

Programmes such as the TPP which are run elsewhere have

been highly successful in creating a pipeline of excellent

learners from under-resourced schools that enter University

and have already produced several medical doctors, nurses,

actuaries, accountants, economists, and engineers who

have positively impacted their communities.

EDUCATORS

ENHANCEMENT

PROGRAMME

We take pride in SPU being located within

the Northern Cape Province; thus, we must

play a part in dealing with some of the

general issues in our space.

A priority is to contribute towards improving the quality

of schooling in our province to enable young people

from these parts of the country to access post-secondary

education. We will therefore run an Educators

Enhancement Programme as part of the TPP for

Mathematics and Science Educators from the

participant schools.

This programme will ensure that the learners have

the necessary support in their studies, receive the

appropriate academic interventions at school, and that

their teachers encourage their commitment to success.

Through this enhancement programme, we will assist

educators in teaching and assessing in ways that make

the transition from high school to University smoother,

thereby facilitating access. We also endeavour to ensure

that educators have the appropriate technology, access to

data and connectivity, and gain experience using online

resources for teaching and collaboration. The Educator

Enhancement Programme will be a residential workshop

which runs over two weeks in June on the SPU premises.

FAMILY WORKSHOPS

One of the most critical assets of any education system

is the solidarity between parents and teachers.

We want to promote the involvement of families and communities in

the education process of the learner. We will host workshops through

which we will explain the role of the family in the success of the

learner in the TPP; and establish sustainable partnership practices

across schools, families, and communities.

ONLINE TUTORING

For the time in-between the residential sessions at

the University, the TPP learners will be supported by

online tutoring.

This support will be conducted by their teachers who have been

taken through the Educator Enhancement Programme, and we will

assign online tutors that the learners can access at learning centres

that the University will establish across the Northern Cape Province.

“As I embark upon my second five-year

term as the Chancellor of Sol Plaatje

University, I am committed to the SPU

Talent Pipeline Programme’s success

because it speaks to my belief that

academically excellent students who come

from modest means must be given a fair

chance to succeed in higher education.

Sol Plaatje University has a vision of

enhancing democratic practice and

social justice in society. This programme

puts it on a path to achieving that

vision and to making a positive impact

on uplifting rural communities in the

Northern Cape Province.

I hope you will consider supporting this

ambitious but necessary programme at

our University.”

CHANCELLOR, JUDGE STEVEN MAJIEDT

For more information, send an email

to specialprojects@spu.ac.za.

You can also visit our website at

www.spu.ac.za.

• Light

from Africa

-

for Humanity

• Lesedi

Lig uit Afrika – vir die Mensdom

la Afrika - go Batho •

Sol Plaatje University offers the following

undergraduate and postgraduate qualifications:

UNDERGRADUATE

SCHOOL OF ECONOMIC & MANAGEMENT SCIENCES

Diploma in Retail Business Management

Advanced Diploma in Management

Bachelor of Commerce in Accounting

Bachelor of Commerce in Economics

ENQUIRIES: charmell.cardoso@spu.ac.za

SCHOOL OF HUMANITIES

Higher Certificate in Court Interpreting

Higher Certificate in Heritage Studies

Bachelor of Arts (Specialisations: Archaeology, Heritage Studies,

Languages and Social Sciences)

ENQUIRIES: humanities@spu.ac.za

SCHOOL OF EDUCATION

Bachelor of Education (Foundation Phase)

Bachelor of Education (Intermediate Phase)

Bachelor of Education (Senior & FET Phase)

ENQUIRIES: jeffrey.thomas@spu.ac.za

SCHOOL OF NATURAL & APPLIED SCIENCES

Diploma in ICT (Applications Development)

Advanced Diploma in ICT (Applications Development)

Bachelor of Science in Data Science

Bachelor of Science (Specialisations: Mathematical and

Computer Sciences, Biological Sciences and Physical Sciences)

ENQUIRIES: nobulali.mathimba@spu.ac.za

+27 53 491 0000 | information@spu.ac.za | PRIVATE BAG X5008, KIMBERLEY 8300

SolPlaatjeUniv @MySPU sol-plaatje-university Sol Plaatje University

www.spu.ac.za

POSTGRADUATE

SCHOOL OF ECONOMIC & MANAGEMENT SCIENCES

Postgraduate Diploma in Entrepreneurship

Postgraduate Diploma in Public Management

ENQUIRIES: postgrad.ems@spu.ac.za

SCHOOL OF HUMANITIES

Bachelor of Arts Honours in Languages (Specialisations: English

and Afrikaans)

Bachelor of Social Science Honours (Specialisations: Archaeology,

Anthropology, History, Sociology and Heritage Studies)

Master of Arts (Specialisations: Anthropology, History, Sociology

and Heritage Studies)

ENQUIRIES: postgrad.hum@spu.ac.za

SCHOOL OF EDUCATION

Bachelor of Education (Honours) in Curriculum Studies

Postgraduate Diploma in Mathematics Education

Postgraduate Certificate in Education (Senior Phase and FET)

Master of Education

ENQUIRIES: postgrad.edu@spu.ac.za

SCHOOL OF NATURAL & APPLIED SCIENCES

Bachelor of Science (Honours) in Biological Sciences (Specialisations:

Botany and Zoology)

Bachelor of Science (Honours) in Computer Science

Bachelor of Science (Honours) in Data Science

Bachelor of Science (Honours) in Mathematical Sciences

(Specialisations: Applied Mathematics, Mathematics and Statistics)

Bachelor of Science (Honours) in Physical Sciences (Specialisations:

Chemistry, Geography and Physics)

Master of Science (e-Science) by coursework

ENQUIRIES: postgrad.nas@spu.ac.za

INDEX

INDEX

Air Products............................................................................................................................................................................... 65

Brand South Africa.................................................................................................................................................................. 6

Council for Geoscience (CGS) ..............................................................................................................................48-49

Council for Scientific and Industrial Research (CSIR).................................................................................... 54

Durban International Convention Centre (Durban ICC)............................................................................... 3

Free State Development Corporation (FDC)..............................................................................................32-33

Impala Platinum (Implats) .......................................................................................................................................50-51

Indaba Hotel, Spa and Conference Centre.......................................................................................................... 73

Invest Durban.........................................................................................................................................................................IFC

Momentum Financial Planning ................................................................................................................................IBC

Mpumalanga Tourism and Parks Agency (MTPA)........................................................................................... 11

Musina-Makhado Special Economic Zone (MMSEZ)............................................................................22-27

National Cleaner Production Centre South Africa.....................................................................................OBC

Newlyn Group .................................................................................................................................................................36-39

Northern Cape Economic Development, Trade and

Investment Promotion Agency (NCEDA) .....................................................................................................34-35

Petroleum Agency South Africa .........................................................................................................16-17, 58-61

Sol Plaatje University ..................................................................................................................................................80-83

South African Bureau of Standards (SABS).......................................................................................................... 67

South African Mohair Industries Limited (SAMIL)....................................................................................44-45

Standard Bank ........................................................................................................................................................................ 21

Vaal Special Economic Zone .................................................................................................................................28-31

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