Limpopo Business 2016-17 edition

SPECIAL FEATURE South

SPECIAL FEATURE South Africa’s mangoes and tomatoes; papayas (65%); tea (36%); citrus, bananas and litchis (25%) and 60% of the country’s avocadoes. The best-performing subsector of South African exports over the last five years is fruit and nuts according to worldstopexports.com. In 2015 South African exports of these items were valued at .9-billion, 3.6% of the country’s total. This represents a 27% increase since 2011, and here Limpopo has a great record: avocadoes, mangoes and macadamia nuts from the province’s eastern regions are hugely popular in international markets and Limpopo’s commercial farmers are extremely efficient. Limpopo is also a water-scarce province, however, and there are many subsistence farmers in the province. Under the system of apartheid, so-called homelands were created and three of these were located within the boundaries of what is today Limpopo Province: the legacy of poverty that was part of the homeland plan still exists. The Premier of Limpopo, Chupu Stanley Mathabatha, referred directly to one of the indicators of poverty in his State of the Nation address in 2015: “We have also reduced the dependency index from eight in 2006 to six in 2014. This means that in our province, for every one person employed, there are, on average, six people who depend on the income of that person.” While welcoming the improvement, the Premier pledged to work to reduce it still further. Mining is the other big sector – with agriculture – in Limpopo. Limpopo has huge reserves of coal, platinum, chromium, uranium clay, nickel, cobalt, vanadium, limestone and tin. Within Limpopo, approximately 400 prospecting and mining licences have been granted for a wide range of minerals. These include the largest diamond mine in South Africa, the biggest copper mine in South Africa, the biggest open-pit platinum mine in the country and the biggest vermiculite mine in the world. The province has 41% of South Africa’s platinum group metals (PGMs), 90% of South Africa’s red-granite resources and approximately 50% of the country’s coal reserves. Antimony, a highly strategic mineral found in large quantities in China, is another of Limpopo’s major assets. The provincial government of Limpopo is determined to leverage the mineral sector to create more industry in the province. To this end, five interventions are planned for the medium- and long-term: • A provincial supplier development programme • A mining community development programme • A post-mining-era skills development programme • A provincial industrialisation programme • A procurement programme that ensures that mines buy 20% of their supplies from local small, medium and micro enterprises (SMMEs) and co-operatives Another aim is to develop the manufacturing capacity of the province. The goal is to create value within the borders of Limpopo, and in this way to create employment. Manufacturing in the province is centred around mining areas (smelters and refineries), agricultural estates (juices and concentrates) and in Polokwane it is strong on food and beverages). Agri-processing is strong, with Pioneer Foods, McCain, Granor Passi, Kanhym, Westfalia and Enterprise Foods prominent, but this sector still has enormous potential to grow. Strategic location The Great North Road passes through Limpopo from the south to the border town of Musina and on to Zimbabwe and its neighbours in the Southern African Development Community. The province’s location lends itself to logistical operations and most of South Africa’s operators have a presence in the provincial capital city of Polokwane. Freight logistics hubs have been established at Polokwane and Musina. Large national logistics company Value Group has only four major regional depots outside Gauteng: the fact that one of these is in Polokwane shows the importance of Limpopo in the logistics chain in South Africa. Logistics giant Imperial Logistics Southern Africa has 70 companies in its group structure, including Kobus Minaar Transport, a concern that began in Tzaneen transporting fruit and vegetables. Much of the agricultural produce of the province has to be delivered to ports in a hurry because of the delicate nature of the fruit. Avocadoes are particularly easy to bruise and so companies such as Freezerlines, Fast ‘n LIMPOPO BUSINESS 2016/17 16

SPECIAL FEATURE Fresh and Cold Chain have developed specialist techniques in getting these fruits to port and to market undamaged. Grindrod has a perishable cargo division that specialises in transporting cargo by air. Limpopo’s thriving mining industry is the other major driver of the transport and logistics sector. Polokwane has an international airport and there are a further two regional airports at Hoedspruit and Phalaborwa. The rail network is mostly devoted to getting the products of the province’s many mines to the coast. Limpopo’s position as a regional hub also brings its own set of challenges, with vast numbers of vehicles passing through the province and using its facilities in the course of delivering goods to all parts of Southern Africa. New mining operations in the Waterberg and at Burgersfort and the new power station at Lephalale have put additional pressure on existing road infrastructure. Projects Two of the largest engineering projects in the history of South Africa have been undertaken in Limpopo over the last few years. Both the Medupi power station (at Lephalale in the far west) and the De Hoop Dam (in the south-east) have the potential to give the region’s economy a massive boost. The power station at Medupi will eventually add 4 764 megawatts to the national grid and has already given the local economy of Lephalale a massive boost with thousands of workers and engineers needing housing and supplies. There have, however, been long delays and only one of the facility’s six units had come online by the end of quarter one 2016. The huge De Hoop Dam, which forms part of the Olifants River Water Resources Development Project (ORWRDP), is vital to the province’s future. Access to water is one of the key elements in any discussion of economic growth in Limpopo Province, especially as the mining and agricultural sectors are so important. In terms of the ORWRDP, some 23 platinum mines stand to benefit. The dam was officially opened in 2014. Another project that could have a big spinoff is the South African Energy Metallurgical Base NAMIBIA Project, which is being developed in the Musina Special Economic Zone. The value of this investment has been given by the provincial government as R38.8-billion, and a memorandum of understanding has been signed with Hong Kong Mining Exchange Company Limited, Hoi Mor. Companies in the mineral and mineral-beneficiation sectors are expected to take up sites within the complex. Plans for another Special Economic Zone (SEZ) at Tubatse have received a positive result from the feasibility study. Tourism Northern Cape Western Cape BOTSWANA North West Free State Eastern Cape Limpopo ZIMBABWE Mpumalanga Gauteng SWAZI- LAND LESOTHO LIMPOPO KwaZulu- Natal The combined land area of Limpopo’s national, provincial and private game and nature reserves is 3.6-million hectares. According to the Premier’s office, the tourism sector employs about 22 414 people. Although most of the province’s resorts and lodges are in private hands, three national parks are located in Limpopo and the provincial government runs 54 nature reserves. The Kruger National Park is one of the world’s most famous conservation areas, and a major attraction for the region. The northern part of Kruger National Park falls within the province. Several other public and private game reserves also exist, as well as other leisure activities and attractions such as adventure touring and eco- and cultural-tourism sites. Hunting is another big activity in Limpopo which attracts domestic and foreign visitors. MOZAMBIQUE 17 LIMPOPO BUSINESS 2016/17