Chinese investors plan $10bn metallurgical complex for SA

JOHANNESBURG, July 27 (Reuters) – Chinese investors signed agreements to build a $10 billion metallurgical complex in South Africa during President Xi Jinping’s state visit this week and hope to start construction next year, an executive involved in the project and a provincial official told Reuters.

South Africa’s President Cyril Ramaphosa said at a joint news conference with Xi on Tuesday that China had committed to invest $14.7 billion in the South African economy, but neither leader mentioned the $10 billion complex.

Ramaphosa is on a mission to kick-start economic growth after a decade of stagnation and is targeting $100 billion in new investment over five years.

The complex, which is still in the planning stage and envisages building a stainless steel plant, a ferrochrome plant and a silicomanganese plant, is a much-needed vote of confidence in the sputtering South African economy.

Trade and Industry Minister Rob Davies said on Tuesday that China was considering a metallurgical project in a special economic zone (SEZ), but he did not reveal the scale of the project or timeframe.

The executive involved in the project, who did not wish to be named because he was not authorised to speak to the media, said memoranda on the complex were signed before Xi and Ramaphosa gave news conference on Tuesday.

“The investors for the SEZ project were in the room when Ramaphosa and Xi spoke to the press,” the executive said.

Richard Zitha, a project executive at the Musina-Makhado SEZ where the complex will be based, said the project was being led by Chinese state-owned companies, but he declined to name them.

He said the Chinese investors would look for Black Economic Empowerment partners to comply with South African rules designed to address racial disparities more than two decades after the end of apartheid.

The investors were open to investors from other countries joining at a later stage, he said.

“The investors have been in South Africa for around a week and have visited mines to look for inputs for the project,” Zitha said.

The Musina-Makhado SEZ is in Limpopo province close to South Africa’s borders with Mozambique, Zimbabwe and Botswana.

The SEZ plans to house plants with a capacity of 3 million tonnes per annum of stainless steel, 3 million tonnes per annum of ferrochrome and 500,000 tonnes per annum of silicomanganese. Those capacity targets are subject to change and will be finalised by the end of the year, the executive said.

A coal-fired power plant, coking plant and coal washery will be built alongside the metallurgical plants, a presentation prepared for investors showed.

Some of the steel output for the complex has been earmarked for export to China, while other products would be sold to countries in southern Africa, the executive said.

South Africa is already a major exporter of metal alloys to China.

Investors are hoping to receive the necessary environmental approvals by the end of March and would then start construction, Zitha said.

Editing by James Macharia and Jason Neely

Related Content

Chamber launches business clinics to support women-led businesses

Rwanda’s women entrepreneurs arm under the private sector federation body has launched a series of business clinics with the aim of supporting women-led businesses affected by the Covid-19 pandemic. CNBC Africa spoke to Agnes Samputu, Executive Director of the Rwanda Chamber of Women Entrepreneurs for more.

Rwanda leverages on technology in the fight against COVID-19

Rwanda Biomedical Centre has established a new Covid-19 testing laboratory in Rubavu district with capacity of running 400 Covid-19 samples per day to help contain the pandemic in the area. This is the second testing lab established in Western Province after Rusizi District with capacity of running 500 samples per day. CNBC Africa's Fiona Muthoni had a conversation with Dr. Nsanzimana Sabin, Director General of RBC.

ARC rolls out disaster insurance for Zimbabwe & Madagascar

Lesley Ndlovu, CEO of the ARC joins CNBC Africa for more.

West African consumer sentiment drops sharply as COVID-19 crisis deepens

Global data analytics company; Nielsen, says the COVID-19 pandemic has led to a sharp drop in consumer sentiment in West Africa in the second quarter of the year. Ged Nooy, Managing Director at Nielsen Nigeria joins CNBC Africa for more.

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

More from CNBC Africa

Up to 50,000 South Africans could die this year of COVID-19

President Ramaphosa also admitted that there was a shortfall of 12000 healthcare workers. Despite this there were 28000 hospital beds as well as 37000 private quarantine beds for those unable to isolate at home, along with 1700 ventilators.

Sudan’s 37 dry years are over for its non-Muslims

Non-Muslims will no longer be criminalised for drinking alcohol in private, Justice Minister Nasredeen Abdulbari told state television. For Muslims, the ban will remain. Offenders are typically flogged under Islamic law.

One of the influential fathers of power in Africa dies aged 90

There is no doubt that his integrity, credibility, drive, inherent humility and care for people, also profoundly helped to motivate Eskom staff during many difficult times.

Building Africa’s Prosperity EP7: Addressing infrastructure challenges in SA’s municipalities

Building Africa's Prosperity places the spotlight on economic growth and filling the infrastructure gap on the African continent. In this episode, CNBC Africa's Chris Bishop and his guests talk about Infrastructure Challenges in Municipalities....

Partner Content

Uber launches its largest region-wide initiative in partnership with Mastercard

Uber, in partnership with Mastercard to provide 120,000 free trips to frontline workers in MEA, including South Africa, Nigeria, Kenya, Ivory Coast...

Maktech’s Godwin Makyao: Now Is A Time of Entrepreneurial Opportunity in East Africa

As an executive decision-maker in both the telecommunications and tourism industries, Godwin Makyao could not have experienced a more diverse set of...

Trending Now

COMMENT: AfCFTA is economic medicine Africa needs to recover from the covid-19 pandemic

he vast market created by AfCFTA will provide an immediate boon to nascent plans being guided by the African CDC, NEPAD and others to produce various critical healthcare items such as pharmaceutical compounds, PPE and ventilators in countries such as Nigeria, South Africa and Kenya.

More than 70 workers test positive for COVID-19 on an English farm

The number of new confirmed COVID-19 cases across Britain each day has been falling from a peak of more than 6,000 in April to 650 in the latest figures released on Sunday, despite wider availability of testing.

African born tycoon Elon Musk Tesla slashes prices as pandemic weighs heavily

The company headed by Elon Musk this month posted a smaller-than-expected fall in car deliveries in the second quarter, resilient results despite the pandemic that hit the global auto industry.

COVID-19: No more booze for now says Ramaphosa

"We have to make sure there are sufficient beds in hospital and they are not occupied by people who have been taking alcohol,"says Ramaphosa.
- Advertisement -