Africa
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Black Economic Empowerment
Botswana
China
Cyril Ramaphosa
Limpopo province
Mozambique
Musina-Makhado SEZ
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Ramaphosa
Reuters
Richard Zitha
Rob Davies
SEZ
South Africa
The Musina-Makhado SEZ
Xi
Xi Jinping
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Zitha

Chinese firms plan Sh100b complex in SA

Chinese investors signed agreements to build a Sh 100 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 Sh147 billion in the South African economy.

Neither leader mentioned the Sh100 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 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, said memoranda on the complex were signed before Xi and Ramaphosa gave a news conference last week.

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

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Richard Zitha, a project executive at the Musina-Makhado SEZ where the complex will be based, said the project was led by Chinese state-firms, 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.

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“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 three million tonnes per annum of stainless steel, three million tonnes 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

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