Inspire sa issue 9 by Inspire South Africa

inspire TRADE • INVESTMENT • TOURISM

SUMMER 2016

SOUTH AFRICA

PAY-DIRT

PACK IT SELL IT

CREATIVE MINING VENTURES

UNIQUE AGRO-PROCESSING PROJECTS

IN THE ZONE

INDUSTRIALISATION TO GROW LIMPOPO

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SOUTH AFRICA HOLDS ITS OWN AS TOP INVESTMENT DESTINATION IN AFRICA South Africa’s economy received a boost recently, reaping the benefits of a weaker rand and overtaking Nigeria as the largest economy in Africa. Whilst the long-term prospects remain cautious, South Africans were cheered with the news that the GDP grew by 3.3 per cent q/q saa in the second quarter, after a 1.2 per cent q/q saa contraction in the first quarter. The largest contributor to GDP growth was manufacturing, which jumped by 8.1 per cent q/q saa, reaching the highest quarterly growth rate in three years. The current challenging global economic climate, and the need for BRICS countries to stimulate their economies, develop trade markets, and grow job opportunities for their citizens, see South Africa and the other member countries having a shared commitment towards deepening cooperation. South Africa is definitely open for business, with its globally competitive expertise and products in a range of value-adding sectors such as renewable energy, infrastructure development, agriculture, transport infrastructure, mining, defence, and tourism. This presents opportunities to strengthen multi-lateral trade and economic relations and the potential for stronger investment relations between South Africa and its BRICS partners.

South Africa is also uniquely positioned to champion Africa’s cause, promoting regional integration, including developing continental north-south rail and road links, expanding ports, energy capacity and skills development.

This, and a passion for South Africa, a country that is inspiring new ways.

South Africa is the only African country among the Top 40 of the 100 most valuable Nation Brands in the world, with a net value of $225 million - according The implementation of Africa’s Tripartite Free Trade to the Brand Finance Index. Brand South Africa and Area - an agreement between the Heads of State their counterparts in government, business and civil of 26 African countries - will create a common society are justifiably proud of this achievement. market of 600 million consumers and a combined GDP of US$1trillion by 2035, and offers enormous • The only African country among the Top 50 in the World Economic Forum’s Global opportunities for business. Competitiveness Index • Top Investment Destination in Africa Brand South Africa – the country’s official according to Ernst and Young’s Africa reputation management and marketing agency Attractiveness Survey – is flying the country’s flag. With a mandate to • Among the Top Two Largest Economies in Africa build South Africa’s brand reputation to improve • Among the Top Five Investors on the its global competitiveness, Brand South Africa African Continent markets South Africa to domestic and international audiences as a competitive investment destination. info@brandsouthafrica.com It also aims to build pride and patriotism among www.brandsouthafrica.info South Africans, to contribute to social cohesion @ BrandSouthAfrica and active citizenship. @Brand_SA Brand South Africa

Authenticity, honesty, reliability and credibility. These are the building blocks of a successful brand according to Brand South Africa CEO, Dr. Kingsley Makhubela. This is what drives Brand South Africa.

contents

LIMPOPO PROVINCE

Agriculture and tourism hotspot

15 TOURISM

Power to improve the economy

20 WATER We are custodians of our water 27 TRANSPORT AND ROADS

Driving transport infrastructure developments

36 MINING

SMALL BUSINESS

Smme’s create future growth

46 AGRICULTURE

Processing opens doors….

55 ENERGY

Eskom positive about future

SPECIAL ECONOMIC ZONES The saving grace of the economy

Compressing dust to pellets EDITOR Mandy Young

inspire communications

PUBLISHER: Inspire Communications (Pty) Ltd Directors: Mark Poonan, Graeme Mather 63 Boundary Rd, Robindale Johannesburg Tel: 081 566 3558

CONTRIBUTORS Chantel Venter, Cathy Dipppnall, Raycliff Sampson, Nathaniel Kiewiet, Bongani Quoma.

ART DIRECTOR Stacey Storbeck Nel indiodesign@mweb.co.za

ADVERTISING SALES: Bruce Nimmerhoudt

PHOTOGRAPHY Shutterstock, 123RF, pexels.co.za, Indio Design

DISCLAIMER: INSPIRE SOUTH AFRICA is published by INSPIRE COMMUNICATIONS. All work published herein is protected by copyright. No part, editorial or images may be reproduced or adapted in whatever format without the express permission of the publishers and / or their contributors. Information and opinions expressed and published in INSPIRE SOUTH AFRICA, do not necessarily express opinions of this magazine. The magazine, publisher or editor cannot be held liable for damages of any nature, directly or indirectly from any facts or information that has been provided or omitted in these pages. The same applies to any statements made or withheld by this magazine.

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Pioneering PUBLIC TRANSPORT

THROUGH INNOVATION gautrain.co.za

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foreword

INSPIRE LIMPOPO INTERNATIONAL TOURISM, TRADE AND INVESTMENT CONFERENCE

e bring you fraternal and friendly greetings from The Limpopo Economic Development Agency (LEDA) who is proud to partner with Inspire Communications to host the auspicious event “Inspire Limpopo International Tourism, Trade and Investment Conference”. Mr. Chen, upon his visit to Limpopo through The Kruger National park at the Ba-Phalaborwa Gate noted the historical significance of humanity’s artefacts in the Mapungubwe Hills and was mystified by the majestic Baobab Trees; he tasted the Mopani worms and downed some Marula Juice. He was overwhelmed at this magnificent once in a life-time experience. A few years later he decided that he wanted to come and invest in the processing of Mopani worms as a delicacy. He started a bottling plant to make Marula juice, and found that our Macadamia nuts, which are a great delicacy in Japan, are the best in the world. When visiting Limpopo, and experiencing the peace, hospitality and cuisine, one is always delighted to partner with Limpopo Economic Development Agency, your development partner of choice. . LEDA works with a wide spectrum of stakeholder groupings and strategic partners on an ongoing basis and, value Meetings, Incentives, Conferencing and Exhibitions (MICE) are important platforms for a meeting of minds and collaborative planning and investment promotion. We are delighted at the attendance of Inspire Limpopo Tourism Trade and Investment Conference, to share with us the strategic advantages of the youthful, inspired people, spatial location in the North-South Corridor, the natural endowment in strategic resources, which

should benefit all our stakeholders and the people of the African Union, the diaspora, the progressive forces in BRICS, African Unit and its Tripartite Regions, ASEAN, the E.U and NAFTA, and all our future partners. We recognize that the exchange of information and planning are not an end in themselves, and we wish to urge delegates to actively seek and secure partnerships and commercial deals from opportunities presented by a fast evolving Limpopo economic landscape. Worth flagging are the Musina Makhado and Tubatse Special Economic Zones, which look set to unlock vast business opportunities in various economic sectors including; investment and commitment to projects in tourism development; mining and mining beneficiation; manufacturing, agriculture and agro processing; transportation, freight and logistics; information and communication technologies, as well as infrastructure development including our strategic role in the 3rd Industrial revolution. I, therefore, look forward to rigorous engagements and reflections on how to best industrialise Limpopo with a view of fast tracking regional integration as a contribution renewal of the wider African continent. This event provides a space for you to engage and unlock the available opportunities presented at this conference. I hope this conference will leave a lasting legacy and provide the necessary growth and job opportunities.

M.B. Mphahlele Managing Director Limpopo Economic Development Agency

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limpopo province

THE LIMPOPO PROVINCE:

A BRIGHT FUTURE ON THE HORIZON 8

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limpopo province

The Limpopo Province has taken a massive knock due to the devastating drought. However, it still remains an agriculture and tourism hotspot with multiple opportunities for small businesses. ChantĂŠl Venter highlights some of the programmes and investments that will see the province bounce back and rise to meet food and job security over the coming year.

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limpopo province

he country’s declining economy coupled with a weak Rand, poor employment statistics and the on-going drought are placing excessive strain on provinces around SA. The Limpopo Province – often referred to as South Africa’s garden – have perhaps felt the blow slightly harder than the others, especially considering that 78,9% of its population lives below the national poverty line. Luckily, due to the proactive approach of Government and Provincial Government, various programmes, relief tactics and investment strategies have the potential to develop Limpopo’s economy and fight poverty.

R75-million investment into Polokwane’s tourism industry The unique diversity of the scenic landscapes and wildlife in Limpopo is unmatched by any other, which is why it is one of SA’s top tourist attractions. According to the Independent Online, the tourism industry in South Africa aims to contribute 9% (up from the current 3%) to SA’s gross domestic product (GDP) over the next five years. The weaker Rand could potentially send many a Brit to the bushveld over the next several months but the onus is on each province to

make their cities and towns more appealing for local and foreign travellers. Sun International’s R75-million investment into Polokwane’s Sun Meropa is a major step in the right direction for Limpopo. The development is set to create local jobs during the construction phase and boost tourism in the city. Thabo Mosololi, Director of Operations elaborated on the project saying: “We will be able to extend our offering to include a high standard of accommodation and service to our guests visiting from other provinces, and with the largest, contemporary casino floor in Polokwane, a selection of dining and entertainment options and a quality hotel, Sun Meropa is poised to become the premier entertainment, business and leisure destination in the region.”

Agriculture: the driving force behind Limpopo’s economy The agriculture industry of Limpopo contributes to a majority of SA’s mango, papaya, avocado and tomato production. It also produces 36% of the country’s tea, 25% of its citrus, bananas and litchis as well as 285,000 tones of potatoes. The climate in Limpopo also makes it

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• create • opportunity • investments • support • create • opportunity • investments • support • create •

GTEDA is established by Greater Tzaneen Municipality as

The Mayor of Greater Tzaneen Municipality, His Worship Cllr Maripe Mangena

a Municipal Entity to drive economic development and attract investments.

OUR VISION: To be a self-financing Agency that leads in

OUR STRATEGIC OBJECTIVES

developing an inclusive, thriving and sustainable economy for the people of Greater Tzaneen.

1. Support entrepreneurs in accessing investment capital;

OUR MISSION: We strive to attract investments into

2. To provide information, advice and support to businesses

Greater Tzaneen, facilitate through innovative and efficient ways, development of an economy that is inclusive, sustainable and resilient. We believe in the potential of our people to drive their own development.

OUR STRATEGIC FOCUS AREAS

1 2 3 4 5

Agriculture and Agribusiness

to ensure growth and sustainability;

3. Promote a conducive investment climate in Greater Tzaneen and attract suitable investors;

4. To develop effective partnerships with economic development role-players;

5. To acquire and manage assets and other facilities; 6. To promote entrepreneurship as a career of choice among the youth;

Manufacturing

7. To cultivate Tourism and Heritage Conservation

entrepreneurship in the broader community;

8. Develop economic research and analytical capacity of GTEDA; and

Property Development

9. To improve organisational skills, systems and processes. Green Energy

Greater Tzaneen Community Radio Station (GTFM 104.8 MHz)

Please contact us for any business ideas in line with our focus areas.

GTEDA established Greater Tzaneen Community Radio Station to assist in driving economic development. GTFM 104.8 “your tropical station” connects the community of Greater Tzaneen through current affairs, local news and entertainment.

Chief Executive Officer, Mr. KJ. Maphoto

Board Chairperson, Mr. MZ. Mawasha

Gteda is proudly funded by:

• create • opportunity • investments • support • create • opportunity • investments • support • create •

limpopo province

ideal for coffee, nuts, guavas, tobacco, timber and a Small Business opportunities in the province number of other crops. The Department of Small Business Development recently During the agriculture budget vote speech in April, announced a R4.8-million upgrade to the Tshakhuma the late MME Joy Matshoge stated that agriculture in Fruit Market. The market, which has been in operation Limpopo would become the engine driving the economy. for over 40-years, offers a livelihood to 400 traders, and “It is envisaged,” Matshoge said “that by 2030 the through the development of the market, these jobs will agriculture and agro-processing sector should create be secured. 1 million jobs nationally, and 100 000 jobs provincially, As the garden of South Africa, and as the province with as contribution to the national target.” the highest poverty level in the country, it is only natural Due to the drought, agricultural production has seen a that small business opportunities for smallholder farmers dramatic decline. However, a number of programmes are should become a focal point for Limpopo. in the process of providing the necessary sustainable Projects like the Southern Africa Food Lab(SAFL), resources management, which trains smallholder education and training, farmers on an agroecological farmer support and approach to farming, not development, veterinary only promotes small scale services, and research and farming but also enhances technology development it, bizcommunity reports. which the farming SAFL Project Manager, Dr. “It is envisaged,” Matshoge said community in the province Anri Manderson, elaborated is so desperate for. saying: “We believe that the “that by 2030 the agriculture Apart from the millions smallholder sector is a key and agro-processing sector that have been allocated to point of entry to bring about farmers who are worst hit by more sustainable food should create 1 million jobs the drought, R1.783-billion systems in South Africa, nationally, and 100 000 jobs have been allocated both because these farmers (R339-million of which support the most vulnerable provincially, as contribution are conditional grants) to populations through the Limpopo Department informal markets, and to the national target.” of Agriculture and Rural because they have farming Development for the period operations most suitable of 2016/2017. These funds for the development of have been assigned to sustainable, agroecological, various programmes like the and local food systems.” Revitalization of Smallholder One of the most profound Irrigation Schemes (RESIS), Land Care, Greening, developments for Limpopo in recent months has been the Conservation Agriculture and Agroforestry, inclusion of Musina-Makhado as a Special Economic Zone Comprehensive Agricultural Programme (CASP), the (SEZ). This decision has already attracted R40-billion Extensive Recovery Plan, the Fetsa Tlala programme from a Chinese consortium interested in creating an and the Nwanedi AgriPark Development for Vegetables energy and metallurgical industrial park in the zone. Project, to name but a few. Although an SEZ in Limpopo will benefit the greater An announcement earlier this year that American and Limpopo, it will also result in various opportunities for Chinese companies are looking to invest R940-million in small businesses surrounding the SEZ. renewable energy and ethanol profits in Limpopo, is great With all the multiple initiatives and the flood of foreign news for local sweet sorghum farmers. Sorghum farming investment pouring into the Limpopo Province, it is could turn unproductive land around, as its rainfall definately shaping up to be the province to watch closely requirements are suitable to that of the province. over the next year.

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vocational training

WHO IS

CAPRICORN COLLEGE FOR TVET?

Capricorn College for TVET is a product of a merger of three Colleges with very distinct and diverse historical backgrounds.

he Colleges are the former Pietersburg Technical College (PTC), Bochum College of Education and the former Northern Province Community College (NPCC). Capricorn College for TVET has four (4) campuses namely: Polokwane Campus, Seshego Campus, Senwabarwana Campus, Ramokgopa Campus and a satellite campus at Bokoni Platinum Mine.

WHAT DO WE OFFER AS CAPRICORN COLLEGE FOR TVET?

VISION: To be the leading Technical, Vocational Education and Training Institution of Excellence

MISSION: Capricorn College for Technical, Vocational Education and Training is to achieve its vision by offering responsive, flexible and quality programmes that are accessible to all learners through formal learning, skills development and learnerships. This is achieved by forming partnerships with relevant stakeholders, making use of committed human capital and employing appropriate physical and fiscal resources.

LOGO: Our logo symbolizes academic and technological success and contains the motto: â&#x20AC;&#x153;Achieving Excellence Togetherâ&#x20AC;?

We have four main departments namely: Business Studies, Engineering and General Utility Studies for specialisation and fundamentals which is offered additionally in all faculties. We offer National Certificate Vocational (NCV) Programmes. The national certificate vocational subjects are offered at Levels 2, 3 and 4 of the National Qualification Framework (NQF). All NCV programmes consist of a fundamental learning component and a vocational component and comprise 130 credits on each level. We also offer Nated/Report 191 programmes.

WHAT SETS CAPRICORN COLLEGE FOR TVET APART FROM OTHER TVET COLLEGES? Capricorn College for TVET offers the best engineering and IT programmes, which attract a lot of young female students who add to the number of females in the engineering industry. We pride ourselves in our students and staff members.

Mr K.R Madzhie CEO and Principal of Capricorn College for TVET

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tourism

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tourism

THE BEST IS YET TO COME Tourism in South Africa has the power to improve the countryâ&#x20AC;&#x2122;s weakened economy. ChantĂŠl Venter looks at what is happening in tourism and what kind of transformation is needed to grow foreign and domestic travel with 6% by 2021.

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tourism

t appears as if the South African tourism industry Investing in SA’s beaches is booming at the moment. After a disappointing Until now, South Africa has remained a top tourist 2015, international arrivals increased by more attraction due to the diverse experiences the country than 20% during the first seven months of 2016, offers, amongst many a pristine coastline. and the car rental market also grew by 20%. To Recently, the Department of Environmental Affairs crown it all, SA has been rated the fourth best awarded the Kouga Municipality with R12.3-million for country to visit in the world (after Greece, the USA and upgrades in Jeffrey’s Bay. The money will go towards Italy) in the 2016 annual edition of Conde Nast Readers’ advancements and a new lifeguard tower at Dolphin Travel Awards. The country’s Beach, a boardwalk and new tourism industry has the ablution facilities at Pellsrus power to grow the struggling Beach as well as a coastal economy, and the best way to clean up stretching over 15 do this is by making South km. The project is set to African travel even more create around 70 jobs in the hanekom asked the tourism favourable to foreigners and process and enhance tourists’ industry to adapt their domestic tourists alike. experience this summer. Nelson Mandela Bay also facilities accordingly, saying: has reason to expect an influx Growing the economy “We believe that promoting of tourists over the next few through tourism years after three beaches were The economic impact tourism universal accessibility, awarded Blue Flag status has on a country stretches far recently. In addition to this wider than just hospitality coupled with our marketing, the city was chosen to host and transport. According to destination enhancement the Half Ironman (Ironman Tourism Minister Dereck 70.3) World Championships in Hanekom, visitor spending and skills development 2018. According to the Port grows the economy by programmes, will help us Elizabeth Express, the event, creating jobs and business which normally attracts 6000 opportunities, which is to attract another 5 million top athletes from all over the especially prevalent in tourists to South Africa world, trumped cities like Nice developing countries. “Travel and Budapest for this and tourism is now the by 2021.” achievement. “We have always world’s largest and fastest strived to offer a world-class growing industry,” he added. event in the city and it is a Statistics from the World great compliment to do it,” Travel & Tourism Council Keith Bowler, Ironman SA MD indicate a direct gross told the publication. domestic product (GDP) contribution “It shows that what we are doing here is globally for SA’s travel and tourism at R103-billion and recognised. Port Elizabeth itself has already repeatedly R113.4-billion for 2014. proven to be a city where events of international calibre After a discouraging 2015, which saw a revenue drop can be offered,” he added. of 7.3%, the expectations for the tourism industry going forward has tripled. South African Tourism CEO Sisa Ntshona, requires the industry to contribute to 9% Closing the tourism growth gap (currently 3%) The recent increase in international tourists has been of the country’s gross domestic product (GDP) over the accredited to the favourable exchange rate, marketing next five years, the Independent Online reported. efforts and the end of the ebola threat. With a 6% growth Ntshona said that the organisation aims to bring in more gap to fill, it begs the question whether these three than 5-million international tourists but in order to influencers will have the long-term appeal the attract these travellers, everyone in the tourism industry economy needs. should work together to ensure that they are providing Luckily, during a speech delivered at the World the best product. Tourism Event held in Parys, Minister Hanekom

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tourism

highlighted issues that government would be addressing. “We are establishing a bidding fund for events, which will consolidate our position as the leading business events destination on the continent. We are also removing barriers to growth by addressing Immigration Regulations and licencing for tourism operations, and working with municipalities to harmonise bylaws that have an impact on tourism,” Hanekom said. Hanekom also addressed domestic tourism saying that after a study, SA Tourism found that domestic tourists enjoy beach and bush holidays but that they are also looking for new experiences. Affordability, however, remains the biggest reason why South Africans aren’t exploring their own country. “Tourism businesses that create affordable access for the domestic market will be rewarded with additional customers. As more of our people explore our diversity, they will understand each other better, and the bonds that tie us together as one nation will be strengthened,” he added. SA Tourism has also allocated a budget of R100-million per year over the next few years to enhance domestic travel in the country.

Tourism for all The theme behind this year’s World Tourism Day was Accessible Tourism, which encourages facilities that cater for all people, including people with disabilities, injuries, families with small children and the elderly. Hanekom asked the tourism industry to adapt their facilities accordingly, saying: “We believe that promoting universal accessibility, coupled with our marketing, destination enhancement and skills development programmes, will help us to attract another 5 million tourists to South Africa by 2021.”

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LIMPOPO TOURISM SEEN AN IMPRESSIVE GROWTH OVER THE YEARS Tourism is one of the good news sectors with regard to economic growth in Limpopo. The province’s tourism sector has seen an impressive growth recently. Concessions at provincial facilities are being offered to private operators to run the Kruger National Park which covers 20 000 square kilometres and the Limpopo Wildlife Resorts brand has been launched. Domestic tourism to Limpopo created a net inflow of revenue in 2015 of R652-million, up from R468-million in 2014. The tourism sector employs about 23 000 people. Although most of the province’s lodges are in private hands, the province has three national parks and the provincial government runs 54 nature reserves of different types. The combined land area of Limpopo’s national, provincial and private game and nature reserves is 3.6 million hectares. The Limpopo Wildlife Resorts brand was launched by the Provincial Government, aiming to provide attractive resorts that will generate revenue and create employment. Fourteen of the province’s resorts have been targeted for refurbishment with 400 temporary and 130 permanent jobs created. Annual revenue of R10-million is expected to be gained from these revamped resorts. The Sanrock Resort and Conference Centre in Modimolle, a Gooderson Leisure Corporation property, has recently received an extensive renovation. A casino licence was offered to Tubatse area in Burgersfort bringing to three the number of Casinos operating in the province The Meropa Casino and Entertainment World in Polokwane and Peermont’s Khoroni Casino in Thohoyandou are the others. Vukani Gaming operates slot machines in various locations. Tourism routes and clusters The Bush to Beach Tourism Route covers sites and sights between Phalaborwa and Mozambique, an example of Limpopo’s successful partnership with a neighbouring country. From game reserves in Limpopo to the beaches of Xai-Xai in Mozambique, the route has been supported by private operators and investors and therefore is able to offer excellent products and service to compliment the natural scenery. • The Bush to Beach Tourism Route is one of several such routes in the province, including; • Kruger to Canyon, Linking Phalaborwa to the Blyde River Canyon through the Kruger National Park • Seraki Blouberg in the Blouberg mountain range, including two nature reserves and encompassing the land of the 170 000 people living in 117 traditional settlements • Land of the legends, in northern Limpopo in the land of VhaVenda. Thohoyandou is the hub for exploring the area around the Soutpansberg mountain range which contains more than

500 species of trees. Features include the sacred sites of Lake Fundudzi, the Thathe Vondo Forest and the Phiphidi Waterfalls. • A 3 000-year baobab three with a circumference of 43 metres is found near Sagola Spa. Other tourism routes in the province include; • The African Ivory Route • The Golf Route • The Limpopo Valley Route • The Mapungubwe Route • The Ribolla Open Africa Route • The Soutpansberg-Limpopo Birding Route • The Valley of the Olifant Route • The Waterberg Biosphere Experience The Kruger National Park covers nearly 20 000 square kilometres and attracts more than a million visitors annually. It has six ecosystems, 1 982 species of plants, 517 species of birds and 147 species of mammals – including each of the so-called Big Five; lion, leopard, elephant, buffalo and rhinoceros. The area adjacent to the National Kruger Park is particularly rich in private game reserves, some of which are regarded as among the finest luxury tourist offerings in the world. The Marakele National Park is situated on the Waterberg escarpment in the south-west of the province, relatively near Gauteng. The Skerkstroom River runs through it and it is home to elephant, rhino and rare vultures. Limpopo Province is wild and enigmatic. It boasts long stretches of untamed wilderness with thorn and baobab trees, magical mountain ranges and is also home to the Big Five as mentioned. The province contains a wealth of historical and cultural treasures and is named after the great Limpopo River that flows along its northern border. It has many geological sites, some which are caves containing ancient rock art. It also has an abundance of game reserves, which offer awesome hiking trails through this exquisite land. Limpopo province offers some of the most spectacular wilderness hiking trails in the world. The Blouberg and Wolkberg region are wild and practically untouched. Hikers are given the opportunity to explore these mountain regions and deep, sometimes unchartered caves. The Waterberg Mountains stretch along more than 5 000km square of spectacular landscapes and scenic valleys. The Magoebaskloof area boasts magnificent mountain scenery with tumbling waterfalls, isolated rock pools and lush indigenous forests The Magoebaskloof Hiking Trail is situated on the escarpment close to the town of Tzaneen. The diversity of the Limpopo Province, both culturally and naturally, makes this destination the preferred ecotourism place. The province aims to attract more visitors in the next 10 years.

water

WATER

â&#x20AC;&#x153;Water is life, sanitation is dignity, we want our country and its people as custodians of our water and sanitation resources - and committed partners in our drive for sustainability.â&#x20AC;? Department of Water and Sanitation (DWS). By Cathy Dippnall

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water

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water

says South Africa has about 10 million cubic metres of outh Africa has been in the grip of one of the renewable groundwater. “In an ordinary drought, this level worst droughts the country has experienced drops to seven million, but this crippling drought dropped in over 30 years. Six provinces; North West water reserves to such low levels that no one is sure just Province, Mpumalanga, Limpopo, KwaZulu how much groundwater is left.” Despite this challenge the Natal, Free State and Western Cape have been DWS is committed to building more boreholes and declared drought areas. infrastructure to these communities. But the drought is not entirely to blame for the water shortage. There have been warnings of a looming water crisis since 2013, which have since been exacerbated Water stewardship a priority in preserving by the drought. groundwater-dependent ecosystems Since 1994, access to potable water has risen Groundwater concerns are a real challenge as global significantly to 95.2 percent of the population, from temperatures soar to highest levels recorded. 59 percent. Senior manager of the But in 2013, the DWS WWF-SA Freshwater reported that 37 percent of Programme, Christine potable drinking water was Colvin explains that it is lost through leaking pipes essential to stop pollution and dripping taps. By then and drying-up of the water water demand had overtaken table, as this is a major “The land that provides supply by 60 percent in contributor to drought 50 percent of our water water infrastructure conditions and climate management areas, while change. should also be protected over 30 percent of South “Most relevant for many from mining activities that Africa’s waste water communities in South treatment plants were in Africa is the deepening results in acid mine dire straits. water crisis, aggravated by drainage. Healthy catchments The DWS stated that the drought conditions. R293 billion was needed We are not sufficiently need to be urgently on water infrastructure prepared to deal with management for the climate change and the prioritised and supported following five years. The transition to a low-water by the new Catchment water crisis was blamed economy. A droughton technical problems and resilient and sustainable Management Agencies.” electrical cable theft. future will rely on But, by the beginning of government giving high this year, the water crisis level attention to the reached a critical level that cornerstones of our water saw thousands of citizens sector, namely; skills; and businesses campaigning infrastructure and new through drives such as job opportunities. Operation Hydrate to provide millions of litres of drinking “We are a water-scarce country with a 50 percent water to farmers and distressed communities affected by return on water from only eight percent of the land, the drought. which is mainly from the high Northern Cape fold and The campaign was given a major boost after Water escarpment.” Colvin says that it is important to secure Affairs and Sanitation Minister, Nomvula Mokonyane that eight percent of water, particularly from poor pledged a National Lottery donation of R50-million, to agricultural practices from communities and businesses supply bottled water and provide infrastructure and in rural areas, which leads to erosion and pollution boreholes in the most affected areas. downstream. According to the DWS there are currently about 300 “The land that provides 50 percent of our water should communities that rely entirely on groundwater from also be protected from mining activities that results in springs and boreholes. acid mine drainage. Healthy catchments need to be Dr Shafick Adams of the Water Research Commission urgently prioritised and supported by the new Catchment

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education

WORK-BASED EXPOSURE YIELDS

GOOD RESULTS

More than 270 Waterberg TVET College’s level 4 students participated in work-based learning during the winter recess. This is to afford the students an opportunity to practice what they are learning in class and also to expose them to the real workplace environment.

tudents who were engaged in work-based learning are enrolled in Marketing, Hospitality, Finance Economics & Accounting, Office Administration, Primary Health, Engineering & Related Design, Civil Engineering & Building Construction as well as Electrical Infrastructure Construction. Host employers included Coach House Hotel, Fusion Boutique Hotel, Thandeka Lodge, Entabeni Lodge, Lalapanzi Lodge, OASIS Hotel, The Park Hotel, Vodacom, Studio 88, Mokopane Hospital, Mokerong Magistrate, Mahwelereng Clinic, Belo & Kies Construction Company, Autofix, MVA Laboratory Laboratoy for Civil Materials and Letaba Laboratoy for Civil Materials. The Technical Vocational Education and Training (TVET) Colleges curriculum requires the integration of theory and practice. The practical component may be

offered in the workshop or simulated environment and/or in the real workplace. The relevance of content knowledge and skills and the quality of the graduates that colleges produce, depends on the level of practical training and work-based exposure that the students receive over their years of training. The Minister of Higher Education and Training, Dr Blade Nzimande, has called upon TVET Colleges to build strong links with business and industry in order to achieve the goal of offering quality technical vocational education and training. “We are happy to have worked with the students of Waterberg TVET College who showed a great deal of professionalism and determination towards their work” said Mr Nicholus Belo from Belo and Kies Construction. He further committed to working with the College’s Civil Engineering and Building Construction Students in the future. Mr Tshepo Magoro, Work-Placement Officer, commended all host employers for their commitment to empowering our students. He said “work-based learning provided our students with the actual experience of different work roles that they are likely to encounter once they have completed their studies”. The dedicated College Lecturers make a concerted effort to find workplaces to place students. They also encourage the students to look for employment opportunities on their own closer to their residential areas. The aim of the College is to have all level 4 students engage in work-based training during April, July, September and December recess periods. More host employers are encouraged to join in empowerment of the students in order to remain competitive in an increasingly knowledge-based economy.

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water

Management Agencies.” Colvin explains that water stewardship is the second key element after sustaining the water catchment areas as everyone uses water and has an impact on water supply. “We need to look at our water infrastructure more inclusively, and this should start with the next phase of the National Development Plan and includes the engineered components, as well as healthy catchment areas and living landscapes – particularly in our water source areas, which are the foundation of water delivery to the economy.”

Innovation and green technologies need to be fast-tracked Dr Diego J. Rodriguez of the Word Bank, reporting back on the progress of its Thirsty Energy Initiative, says that it is working in South Africa to integrate water restrictions into the energy sector and better address water and energy challenges, to ensure the sustainable development of energy resources. “Our work required incorporating water restrictions into an existing energy model and examined the tradeoffs with other water users.” He adds that many interesting results were revealed. “For example, once the true costs of water supply are incorporated into the energy model, the model chooses dry cooling for most coal power plants. Therefore, dry cooling makes

economic sense in South Africa, even if it decreases the efficiency of the power plant.”

Short and long-term projects will increase water capacity In 2015, the DWS rolled-out phase one of the Mokolo and Crocodile Water Augmentation Project (MCWAP) in Lephalale, Limpopo and it now has the capacity to provide 30 million cubic metres of water per annum to Eskom’s Medupi power station. The two-phase construction also includes several large pump stations, 170 km of pipeline and an abstraction works, which all require supplementary infrastructure. Also, undergoing a major upgrade, to relieve the critical water shortages experienced by the Cederberg and Matsuyama local municipalities in the Western Cape, is the raising of the Clanwilliam Dam wall by 13 metres, which will give an additional 70 million cubic metres of water a year to farmers downstream. Another project the DWS has embarked on is the War on Leaks training programme that will see trained plumbers, artisans and water agents visiting communities to investigate water leaks and teach people to save water. “Every citizen in South Africa needs to become much more aware of the fact that ours is a water scarce country and act accordingly by conserving water,” explains Mokonyane.

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transport

HERE TO THERE South Africa boasts one of the largest regional transport networks in sub-Saharan Africa By Cathy Dippnall

outh Africa is developing one of the largest regional transport infrastructure initiatives, which will link the port of Durban to the DRC and Zambia, with connections to the port of Dar es Salaam, Tanzania, and Malawi through the building of the NorthSouth Corridor. The World Bank reports that South Africaâ&#x20AC;&#x2122;s ports beat all other ports in East and Southern African and have a major role to play in international trade for the region. Coupled with 750 000 kilometres of road network, the development of Trade Ports and Industrial Development Zones (IDZ) South Africa is unquestionably the gateway into sub-Saharan Africa. A report compiled by Dianna Games, CEO of Africa at Work consultancy, for the South African Institute for International Affairs (SAIIA) economic diplomacy policy, states that for many years South Africa has been the preferred transport and logistics hub for Southern Africa, because of its superior infrastructure. â&#x20AC;&#x153;Even though it is far from regional markets, Durban is still the port of choice for goods from as far afield as the DRC, more than 2 000 kilometres away, while OR Tambo

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transport

Airport has maintained its industrial activities and will position as the best airport in become a catalyst for global Africa. South Africa is also business and trade. China has dedicated about strategically located between In Gauteng, the R260 million Asia and Latin America, which OR Tambo Trade Port and IDZ $1-trillion through the makes it well positioned for development taking place is construction of pipelines, airlines, shipping and logistics. part of a plan to re-industrialise The port of Durban is still and chart a new course for the rail, road and port the biggest and busiest shipping province’s economy. infrastructure, to open terminal in Africa and is central Economic Development to major international shipping Minister Ebrahim Patel says trade corridors throughout routes. It is the main cargo and that R1 billion is invested in container port facility in South South African infrastructure sub-Saharan Africa. Africa, handling up to 31.4 every day. “Job creation million tons of cargo annually,” should be in key areas such as says Games. infrastructure development, Therefore, it is critical for industrialisation, innovation, South Africa to grow all its inclusion of workers and transport networks including trade ports that incorporate small businesses and the integration into the rest of the airports and sea ports in its free trade zones. For example, African economy.” the multi-billion Dube Trade Port in Durban incorporates With its vast road network, it is essential to keep King Shaka Airport and the port of Durban. building and maintaining South Africa’s arterial system, The Dube Trade Zone is a dedicated freight-orientated which is the responsibility of the South African National export environment and multi-modal logistics platform, Road Agency (Sanral), together with provincial and local which is set to become home to trade and logistics government road departments. warehousing, cargo and other airport-related light Because of the shift of freight traffic from rail to road

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transport

over the past 20 years, the impact to the country’s roads from heavy freight vehicles has been considerable, and with the increase of passenger vehicles, the cost of maintenance and repair has increased intensely. However, road freight operators are struggling as they are faced with increased tariffs, permits and licence fees, as well as e-tolls which have reduced their bottom line.

China is spending $1-trillion on infrastructure on the sub-continent China has dedicated about $1-trillion through the construction of pipelines, rail, road and port infrastructure, to open trade corridors throughout sub-Saharan Africa. Two initiatives have been set up by China because of its Africa investment plans, the $50bn Asian Infrastructure Investment Bank and the $40bn Silk Road Fund. South Africa will receive a total of R94 billion worth of trade agreements after President Jacob Zuma and President Xi Jinping of the People’s Republic of China signed 26 agreements in December 2015. Transnet has secured $2.5bn from the China Development Bank and will use this 15-year guaranteed loan to fund its infrastructure projects. Transnet will use the guarantee to finance the purchase of mechanical and electrical products and equipment from Chinese corporations, as well as funding for the operation‚ maintenance and other services from Chinese companies that are in South Africa. “The guarantee will enable Transnet to raise funds in the markets for the financing of its infrastructure investment programme. This includes the acquisition and maintenance of its locomotive fleet, but importantly‚ it will guarantee Transnet favourable repayment terms‚ including longer tenure and competitive interest rates,” says Public Enterprises Minister, Lynne Brown. The loan is the second large funding agreement signed by Transnet, having raised a R12 billion loan through local financial institutions, including Absa and Nedbank. China North Rail and China South Rail won the bid last

year to purchase 1 064 locomotives from Transnet’s R50 billion procurement programme, with over half of them coming from Chinese manufacturers.

Bus rapid transport system a major boost to commuters With the introduction of the bus rapid transport system (BRT) in most of the country’s major cities commuters no longer have to rely solely on trains or taxi services. Gauteng’s three largest metros - Johannesburg, Ekurhuleni and Tshwane invested heavily in providing new and reliable BRT systems. Due to its over-riding success, additional routes have been introduced to areas such as Soweto where the BRT has transformed people’s lives. Lisa Seftel from the City of Johannesburg Transport Department says the Metropol is focusing on transforming its public transport system. “Our biggest initiative to date is the revived BRT and we are doubling the number of buses in our system by increasing the distances that we travel and the number of passengers that we carry.” The BRT has a long way to go before it can accommodate the millions of commuters that still use taxis. The South African National Taxi Council reports that up to 70 percent of South Africa’s commuters still use taxis every day. Taxis and private bus services are still the only form of transport available in rural areas.

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A road construction partnership

Roads Agency Limpopo (SOC) Ltd is a state owned company listed in schedule 3C of the PFMA, that is under 100% control and ownership of the Limpopo Provincial Government. The MEC responsible for Limpopo Department of Public Works Roads and Infrustructure (LDPWRI) is its shareholder on behalf of the provincial government. It was established in 1999, through the promulgamation of its founding statute, the Limpopo Province Roads Agency Propriety Limited and Provincial Act 7 of 1998 as amended. RAL is registered in terms of the Companies Act 71 of 2008, as a state - owned company.

impopo roads might not be paved in gold, in fact long stretches of them are not paved at all, but that is slowly changing, thanks to innovative partnerships that Roads Agency Limpopo is entering into private sector. The province’s road infrastructure delivery parastatal has raised over R250m through partnerships with large companies that have diverse operations in the province. The initiative is of a number of exciting road construction projects and upgrades that are targeted at economically strategic roads. In July 2015, RAL and Exxaro Coal Limited put pen to paper for the design and construction of a road connecting Ga Seleka villages to the Lephalale commercial centre. The company contributed R71.2m for the project and RAL put in R211.8m of the R283m required. This will see communities living in the area, who struggle to get to the centre of Lephalale for work, and other economic activities; having a smoother access to the town. For residents of Mashabela, GaSelepe and

GaMakgopa villiages, it will now be easier to move between Polokwane and Burgersfort via the R37 route. This is thanks to a R200m project funded by RAL and Anglo American’s Rustenburg Platinum Mines to construct a road that connects them to the two key areas. The mine has committed just over R40m and the Roads Agency will fund the remainder. A unique intergovernmental partnership that also involves a private sector player was entered into in December 2015 to upgrade the road from Dwalboom that passes through Northam and connects to Koedoskop. The R266m project is a partnership between the Limpopo and North West provincial governments as well as cement company PPC. The company contributed R67.2m while government put up R198.8 for the strategic road construction project. RAL and Ledjadja Coal Mining, part of the Boikarabelo Coal Mining Project, are upgrading the road from Lephalale commercial centre to Steenbokpan, including roads that connect to the mining areas in between. The company’s contribution is R71m while RAL has availed R163m of the required R234m to tar the roads.

RAL CEO Maselaganye Matji said the idea of partnerships with the private sector was brought about by the realisation that the agency would need R160bn to address the backlog of 14 500km of roads in Limpopo that either require tarring or rehabilitation. “There is no way that the fiscus could be sufficient to address the backlog. Secondly, there was a need for appropriate skills to support infrastructure planning and support. It is within this context that we have adopted a strategy to partner with the private sector. Limpopo Province has five districts, out of which two have significant mining activities,” he said. The Agency has so far managed to raise R289 million through Public Private Partnerships and discussions are underway to secure other deals of a similar nature. Matji said that the future PPPs could be entered into with corporate giants such as Venetia De Beers, Vodacom SA, Broadband Infraco, and Dark Fibre Africa. “These PPPs will focus on different strategic priorities that can add value to the Limpopo infrastructure delivery,” he said.

WE CARE ABOUT THE COMMUNITIES WHERE WE MINE

ining companies operating in Limpopo have shown enthusiasm in partnering with government to build tarred roads in far flung communities where these mines have operations. Exxaro Coal has entered into a PPPs with Roads Agency Limpopo to construct a tarred road connecting Ga Seleka villages to Lephalale commercial centre. Martin Ramaboea, project manager at the coal mining company, said this was their way of leaving a lasting legacy in an area where they have significant mining operations. “We are a caring mine and we work with the community, we want to leave a lasting legacy for our communities, and also, most of employees reside in these areas that will benefit,” he said. Ramaboea said the project attracted them because it also had the potential to alleviate high unemployment in the area. “We have seen that unemployment is rife there and so over and above creating road infrastructure, we also wanted to create employment.” He said this was the first such partnership the mines had entered into with the public sector and praised the RAL technical team and the CEO, saying it had been a pleasure to be involved in a project of this magnitude with them.“The technical team was excellent, the support from the CEO was good. It was a pleasure working with RAL,” Ramaboea said.

(From Left): Mr Phil van Zyl of ZZ2 Farming, Mr Maselaganye Matji of RAL and Mr Johan Grobler of ZZ2 Farming during signing of RAL-ZZ2 Farming Memorandum of Understanding (MOU).

A UNIQUE, THREE-WAY PARTNERSHIP BREAKS NEW GROUND IN ROAD CONSTRUCTION

ement producer PPC entered into a road construction partnership with RAL, not to benefit the company but to make life easier for communities that live in the affected villages. This is according to PPC Cement Stakeholder Relations Manager, Constance Netshifhefhe. RAL, the North West Provincial Government and the PPC are upgrading the road joining Dwalboom that passes through Northam and ends in Koedoskop. “The company has always wanted to achieve a goal for communities around which we operate to make sure we look after them and contribute to their upliftment,” Netshifhefhe said. She said the PPC still prefer using the already tarred road that runs through Thabazimbi and Northam to get to PPC operations near the affected villages. But because PPC was concerned about the difficulties faced by those communities to access nearby towns and other centres, they felt the need to play a part. “The most important element in our business is the need to travel on safe roads for communities. Access to working environment and shopping centres should be easy, that is why there is a need to create proper roads,” said Netshifhefhe. RAL CEO Maselaganye Matji said because the PPC factory is situated at the border between Limpopo and the North West, its workers are from both Provinces, hence the three-way partnership. “Upgrading the road from gravel to tar will benefit both Limpopo and North West Provinces, including PPC, as it connects both Provinces to the factory,” he said.

Acting Head of Limpopo Department of Public Works and Infrustracture Ms Kate Machaba, RAL CEO Mr Maselaganye Matji and Excutive Head of Corporate Affairs of Anglo American Seara MacheliMkhabela, during sigining of RAL-Anglo American MOU.

AN EFFECTIVE PARTNERSHIP WITH THE LARGEST TOMATO PRODUCER IN THE REGION

ot many people know that most of the tomatoes consumed in Southern Africa are farmed in Limpopo. That is part of the reason why a partnership between Roads Agency Limpopo and the farming enterprise the biggest producer of tomatoes in the southern hemisphere ZZ2 – is important. This partnership will result in the upgrading and maintenance of key roads that are shared between RAL and ZZ2. The affected roads include the Houtsbosdorp, Malaladrift, Smitsrust and Grootbosch. “This partnership could not have come at the right time, when the Province is strengthening its efforts to address the road infrastructure backlog” said RAL CEO, Mr Maselaganye Matji. In terms of the Memorandum of Agreement signed, affected farmers in these areas are at liberty to contribute to the maintenance of the road infrastructure in their area of operation. An elated Phile van Zyl, a director at ZZ2, said: “This is a commercially effective partnership which will greatly assist in enhancing our business. We use these roads to transport our raw material and products. Tarring and maintaining them will shorten the transporting and delivery time spent on the road and further increase road infrastructure lifespan.”

Exxaro’s Group Manager of Community Development Mr Ramesh Changan, Lephalele Mayor Mr Jack Maeko, RAL CEO Mr Maselaganye Matji and MEC for Public Works and Infrastructure, Honourable Jeremiah Ndou, during signing of Exxaro-RAL MOU.

RAL CEO, Mr Maselaganye Matji, Mrs Nolwandle Mantashe of PPC and Ms Tryphosa Ramono of PPC during the signing of RAL-PPC MOU.

LIMPOPO PROVINCE’S VALUE OFFER (VALUE PROPOSITION) AS INVESTMENT DESTINATION  The vision of the Province remains to fulfil the potential for prosperity in a socially cohesive, sustainable and peaceful manner. The vision will be attained by way of a mission statement that emphasizes participatory leadership aimed at promoting excellence and an entrepreneurial spirit, improved service delivery, facilitation of decent job creation and systematic poverty reduction.  Limpopo Province is to address the industrial and sectoral diversification and intensification of technology development, to improve the comparative and competitive advantages of the economy, as well as to promote overall growth and development of the industrial sector through promotion of, and investment in high-value production and value-added technologies and activities.  By 2030, Limpopo must have a basic education system with high-quality, universal early childhood education and quality school education, with globally competitive literacy and numeracy standards. Education is seen as an important instrument in equalizing individuals’ life chances, preparing next generations to be economically mobile and successful and critical to poverty reduction

 Limpopo as a youthful province is further endowed with the human capital and the demographic dividend which will complement the Natural resource endowment in agricultural land, agricultural produce, mineral wealth and excellent solar intensity. These endowments coupled with sound policies, government capacity to plan, private sector partnership and strong relations with the social partners presents Limpopo as the ideal investment destination. The vision of Limpopo as a future bastion of development-led industrialization and core to the - Make in Africa for Africa and the World - will lead to investment and sustainable growth.  The key industrialization drivers i.e. metals value chain, regional energy security services sector growth, sustainable development, Limpopo geographic/spatial location as gateway to rest of Africa and a key industrialization hub in the North-South Corridor. Government is currently investigating the possibility of unlocking South Africa’s coal and platinum-rich northern mineral belt through transport, water and energy interventions. The northern mineral belt project was one of 17 strategic integrated projects, or Strategic Integrat-

municipalities contains the largest PGM mineral reserves in the world. The possibilities to locally beneficiate these minerals currently exist and form the basis of the proposed SEZ. The SEZ is based on the current partnership between the Limpopo provincial government and Anglo-Platinum and buy-in of other role players. The SEZ will be based on the establishment and development of hydrogen fuel cell industry in Limpopo. Anglo Platinum has shown private sector interest through the development of fuel cells in Tubatse.

ed Projects SIPS, prioritised for development by Presidential Infrastructure Co-ordination Commission PICC. Investment in rail, water pipelines, energy generation and transmission infrastructure will catalyse unlocking of rich mineral resources in Limpopo resulting in thousands of direct jobs across the areas covered. Urban development in the Waterberg will be the first major post-apartheid new urban centre and will be a “green” development project. Mining includes coal, platinum and other minerals for local use and export, hence the rail capacity is being extended to Mpumalanga power stations and for export principally via Richards Bay and in future Maputo (via Swaziland link). The additional rail capacity will shift coal from road to rail in Mpumalanga with positive environmental and social benefits.  Infrastructure investment and development of two SEZ’s presents investment opportunities in the next 10 years in excess of R20 Bn. The SEZ in Musina is based on the strategic geographical location as the gateway to Africa. The N1 from Gauteng through Beitbridge to the rest of North Africa will strategically link Limpopo Province with the Matebeleland Province of Zimbabwe. Musina Local Municipality also possesses strategic minerals like diamond and coal that can be beneficiated in the area. The SEZ is based on the current buyin of private sector. The SEZ will host the first eco-industrial park in South Africa. The SEZ will also be supported by the Phalaborwa Magnetite and enormous coal reserves in the Vhembe area. The Musina SEZ will focus on the logistics sector. The aim of the SEZ will be to improve the connection between the Limpopo province and SADC. Musina will become a designated area in which all logistics-related activities are brought together to promote seamless supply chains, i.e. a one-stop logistics shop. Businesses tend to gravitate to these areas, thus, reducing travel costs and congestion.  The Tubatse SEZ should focus on the PGM (Platinum Group Metals) cluster. The primary production of PGMs is a substantial industry in the country as a whole, with the Limpopo region enjoying a good share. The Greater Tubatse and Mokopane local

 The investment value-proposition si driven by manufacturing value chains and key catalytic projects. There are world class competitive based incentives schemes which further enhances the Limpopo comparative and competitive advantage in number of high impact catalytic grow in: • Lephalale Coal to Energy Complex • Phalaborwa – Magnetite semi-metal downstream activities and solar energy • Burgersfort – Platinum / Hydrogen Economy • Musina primary steel complex and metallurgical value chain to higher value-added steel products. “Make in Musina, Limpopo South Africa for Africa and SouthSouth Trade”’  Limpopo is Centrally located for the Regional Integration to the 221 Million people in SADC and the 883 Million people in Sub-Saharan Africa  Effective integrated planning through strong institutional alignment with the labour, social partners, business and government in the PEGAC and PICC feeding into MinMEC and National Government. There is very Strong coordination between the 3 spheres of government and a provincial agency Limpopo Economic Development Agency that champions Limpopo as an ideal investor destination.

mining

MOVING THE DIRT I stand on top of a hill overlooking the Atlantic Ocean, drinking in its entire splendor. Robben Island wades in the waves as an unusually warm August sun strokes its shore. The harbour is a hive of activity as the super tankers and cargo ships play a waiting game in the bay. An Idyllic Cape Town stares across the vast blue mass. In a way that makes northerners say, â&#x20AC;&#x153;Yes this is slaap stadâ&#x20AC;?. By Raycliff Sampson

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mining

would readily have agreed with that northern summation however, in my foreground I see a very different picture. Two Volvo EC300 excavators are loading quarry material into A30 dumpers. The dumpers are feeding a static Metso crusher, while on the other end two L150 loaders manage the stockpile. Surely this cannot be Cape Town. This type of operation has always been at home in the north of the country. However at present the mining environment is primed for entrepreneurs who are willing to, (forgive the over used term), think out of the box and Cape Town is not even in the box when thinking of a location to start up a mine. I wanted to look at this industry development from a different perspective. So I chose to look at it from the coalface. I wanted to know which companies were active and what they have done to become sustainable. Upon analysing CONMESA, (Construction and Mining

Equipment Suppliers Association), data, it is clear that the South African mining and construction markets have been declining steadily. I am not convinced that this is a bad thing though. I believe the business model has changed and the smart guys are running with it. I spoke to a colleague of mine, Chris Atwell who travels up the West Coast and his description of development along the R27 corridor was a breath of fresh air. The old idea of what mining is and how a mine is supposed to run, surely cannot still be relevant. The questions that arose in the aftermath of Marikana must have prompted the birth of new ideas. According to Chris, the definition of â&#x20AC;&#x153;profitableâ&#x20AC;? must evolve in order to make the industry sustainable. He explained to me just how new mining operations in this area are starting to think this way. Companies like West Coast Resources have picked up where the multi-nationals have left off. Large mining houses have a profit thresh hold

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mining

which their mines must meet to make operations worth their while. WCR and many others are much smaller and have created opportunities for themselves and others in ancillary roles, which have made the West Coast a very attractive option for investors. Even though the industry is shrinking, the new age mining joint ventures have found new ways to make mining profitable.

Moving the dirt In the past the mining house would manage all the operational aspects of the project. Post the economic melt down, we can find an operational maturity perhaps largely absent previously. Contractors now move the pay dirt on behalf of the mining concerns. In some cases the profit is split on a percentage basis or the contractor might opt for a more stable, Rand per ton option. Chris Atwell explained the option of R8.00 per ton. I didn’t think that made economic sense. Especially after my initial calculation of 27 tons per truck. That is until I looked deeper. X 6 trucks X 20 hours X 20 days X 12 months Now that makes a lot more sense even after maintenance and wages. The outsourcing of these services allows the mining process to sustain itself. Machine maintenance costs are removed from the mining company. They don’t even have their own machines. They also concentrate on the extraction of fewer carats. They can do this because they have divorced themselves from some of their greater expenses. I went to listen to a sales presentation by the agent for a well-known Swedish OEM. The speaker was extremely excited because of the enquiries coming forward. Not so much the amount of enquiries but rather the type of

enquiries that they are dealing with. The speaker, (who declined to be named) explained that, in the past the Cape region was a 20 ton machine market. He showed me sales data that confirmed that in rare cases, larger machines would be sold. However over the past 18 months sales and enquiries support the theory that something bigger is happening in the West. His data showed that they had grown the business by 20% in an industry environment that had shrunk by 20%. The expansion by companies that would support mining operations in the same period shows exponential growth patterns. Cranes and large ADT sales, (even in the used arena), have sales executives very excited. I have come to the conclusion that just as climate events in the North or South Poles herald a shift in weather patterns so too can one track the developments in particular industries by the buying patterns. That evening I watched a financial news bulletin and it spoke of the impending doom that would befall us if we did not address the issues in the industry relating to the distribution of wealth and labour practices. I needed more alternative information that would give credence to Chris’ theory of a West Coast boom. Speaking to a former military colleague who had recently started working for a West Coast mining company, the average yield requirement for the new age minng operation is a carat per 100 tons of dirt moved. You can hardly sneeze at 12,000 USD a carat. Although all auctions are done via the Internet to maintain security control, at some point the precious metals and stones must be moved. Enter my former colleague. I met him in Vredenburg for coffee. His shoes were dirty and he looked like he was operating equipment. “The days of guarding stones are gone”, explains Thomas Elwood. “Our primary concern now is to maintain the integrity of the pay dirt”. Thomas says trucks filled with earth are left in their charge and in the last 8 months more than fifty specialists have

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Hear from the most influential executives active in investing and developing mining projects on the African continent: ANNOUNCING SOME OF THE LATEST SPEAKERS TO BE ADDED TO THE AGENDA

RICK RULE President and CEO Sprott U.S. Holdings Inc.

MARK CUTIFANI Chief Executive Officer Anglo American

ALAN DAVIES Chief Executive Officer Energy & Minerals Rio Tinto

ROBERT FRIEDLAND Executive Chairman and founder Ivanhoe Mines

6-9 FEB 2017 CAPE TOWN | SOUTH AFRICA

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#miningindaba | www.miningindaba.com

DR. DAMBISA MOYO Macroeconomist

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mining

joined his team. I asked him about his business specifically. I wanted to know if it was lucrative and sustainable. He said that he and his guys would still be there for the next thirty years. Is it a long time in the life of a mine? It certainly is very acceptable for a small mine. He explains that one company does not only mine for stones, they also mine for gas and oil as well as other raw materials used in the manufacture of products we use every day in our homes. He says the West Coast has become a lucrative environment, because the mining concerns have learnt what most Northern companies have been allergic to; they have learnt to diversify. They have shifted the risk of certain parts of their operation to other people and they have also given those people a chance to prosper. To me this sounds wonderful. So mining opportunities, would give the people living in abject poverty in the area a chance to prosper. I asked Chris this question, expecting an optimistic positive response. It would seem that the inertia with regard to the transferal of skill and development has still not been aligned with the potential for profit? If we are to make a success of the wonders of the West Coast and if we are to take advantage of the somewhat serendipitous forming of events, then we must work towards an ethical business plan; a plan that will leave the people of the West Coast better off. Without a doubt this is worth more than all the carats mined in a month. Still I wonder is such a process possible, can we see a shift in the way we do business? 6:25, my telephone rings. Mr. Temba Thlabi and Johan Conrad from Calvinia, calling for advice on a new motor grader to enter the market. I asked them what the application or intended use was? They say they have been commissioned to build a road which is a new construction. This means starting from scratch. I am interested in their story and I get them to tell me more. They explained that they both worked regular jobs and decided to retire and use their pensions to invest in a hair brained scheme. Eight years ago a machine was developed that would suck up the wasted spillage on coalmines. The stuff crushed under the wheels of transport trucks usually seen as unrecoverable. They met a man who taught them how to compress the dust into pellets and sold the pellets. Their overheads were low because the dust was free. In

eight years they went from a partnership to a business employing 85 people. They were starting up a training program to teach residents in the impoverished communities how to build roads. I As I greet them I remembered I wanted to ask them who they are building the road for. It is for a rapidly growing mining concern was the answer. They get into a double cab bakkie and I am left trying to figure out who they could be talking about.

In Conclusion Initially I considered that I might be reading too much into the scattered bits of information I was getting. With the enquiry for more efficient and lower fuel burning machines, I could be led to believe someone is just making sums to look at the feasibility of expansion over the next 10 years. I could deduce that someone is thinking of expansions and looking at machines that will meet the emissions requirements down the road. I could deduce that some people might be setting up their mines so as to avoid too much upheaval for the local communities. I could believe that the security industry in that area is growing because sand is the new diamond. Perhaps contractors are moving into the area in the hope that the IDZ will extend all they way to the Namibian border. Maybe the geologists got it wrong and the mines will start running at a loss. Maybe commercial development in that salt belt is being planned because someone is misreading the signs like I am. Maybe small start up businesses, with plans for local investment, are not considering all the facts when deciding to move west.

A lot of deductions and maybeâ&#x20AC;&#x2122;s. I believe that until we realize that the global financial events which we felt in 2007/2008, (depending on how insulated you were), has changed the way the world works, we will be doomed to make the same mistakes. The events of Marikana, albeit tragic, echo the dissatisfaction and the perpetuation of the old guard and their way of doing business. We donâ&#x20AC;&#x2122;t need a compromise with regard to fair and ethical business practice; we need a commitment from all parties, government included. Perhaps the old guard must come to terms with the fact that mining is not dead but rather the old way of doing business is dead.

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LIMPOPO IS BLESSED WITH RICH MINERAL RESOURCES Limpopo is blessed with rich mineral resources. With mining production levels in South Africa generally lower as the resource base diminishes, Limpopo is in the unusual position of ramping up its operations because two of its major minerals – platinum and coal – are experiencing spikes in demand. Although South African platinum production fell by 50 000 ounces in 2014, the outlook for the mineral looked positive going into 2016. The price of platinum dipped in the second quarter of 2010, but it ended the year in good shape above $1 600 and with the demand for catalytic converters set to increase in 2017 - things are looking up for the sector. South Africa supplied 4, 5 million ounces of platinum needed by the world in 2015, according to marketing agency Johnson Matthey. Coal is massively in demand because of the country’s urgent need for more electricity and the consequent building of new power stations which will demand much more coal. Limpopo’s Waterberg region is the key to securing this part of South Africa’s energy future.

Bushvel Igneous Complex The northern tips of the western zones of the platinum-rich Bushvel Igneous Complex are in Limpopo. Most of the western limb is in North West Province while about half of the eastern limb is in Mpumalanga. The northern limb of the Bushvel Igneous Complex is centrally situated and is entirely in Limpopo – it runs roughly north of Mokopane. Dimension stone is also found as quartz and feldspar-rich granitic rocks, as is sand and clay. The largest concentrations of chromite are found on the eastern limb where Samancor runs Eastern Chrome Mines at Steelport and ASA Metals up scaled smelting furnaces now produce 400 000 tons of charge chrome per year at the Dilokong Chrome Mine located between Tubatse and Polokwane. ASA Metals is a joint venture between the Limpopo Economic Development Agency (LEDA) and China’s Eastern Asia Metals Investment Company. South Africa produces 39% of the world’s chromite.

The Phalaborwa Complex This mining are in the province’s eastern reaches contains large amounts of copper, magnetite (iron ore) and phosphates. The complex also contains the world’s largest deposits of mica used in horticulture and construction, known as vermiculite. In the southwest of the province, at Thabazimbi, a large iron-ore deposit is successfully mined.

Waterberg and Soutpansberg The Waterberg area is seen as the future of South African coal mining.Eersteling, south of Polokwane formerly Pietersburg, was

the site of South Africa’s first gold rush in 1871, Silica is mined south of Polokwane.

Giyani Greenstone Belt and Murchison Greenstone Belt The consolidated Murchison Mine at Gravelotte, just west of Phalaborwa, is the single biggest producer of antimony in the world outside China, producing about 20% of the world’s supply. Prices of antimony, heat retardant, have been very volatile over the last few years but are currently riding high; Village Main Reef bought 74% of ConMurch for R30-million in 2010. Andalusite, a vital component in spark-plug ceramics, is mined near Thabazimbi and at Maroelasfontein in the west of the province. In the area south-east of Chuniesport in the east are the Havercroft, Annesley and Hoogenoeg deposits. Rhino minerals and Andalusite Resources are companies active in this space. South Africa produces about 75% of the world’s platinum. The biggest player in the platinum market, Anglo Platinum, is investing close to R6-billion in expanding its operations at Potgietersrust Platinum North. The main focus of the investment is in increased milling capacity, which will ultimately take the plant up to an installed capacity of 230 000 platinum-ounces annually. In 2009, the company produced 2.45 million pounces across all its operations. AngloPlat is also increasing capacity at its Twickerham mine near Burgersfort. The R7-billion project is expected to start producing 180 000 ounces per year in 2018. At Modikwa, the site of the first discovery of platinum in the area, Anglo Platinum is in a 50-50 joint venture with African Rainbow Minerals Mining Consortium (ARMMC). ARMMC is owned 83% by ARM Platinum and 17% by Modikwa Communities. Anglo Platinum has restructured operations at Amandelbult on the western limb by separating operations into two mines; Dishaba and Tumela. Bokoni Mine, on the northern tip of the eastern limb, was sold in July 2009 to Anoorag Resources, a company which is due to change its name to Atlasa. Atlasa is a black-owned company which, with the acquisition of Bokoni, now holds the third-biggest resource in PGM, after Anglo Platinum and Impala Platinum (Implats) Silicon Smelters (the largest charcoal producer in Africa) and Anglo Platinum’s smelting facility, one of three run by the company, are both located in Polokwane. Attapulgite is mined by G&W Base and Industrial Minerals at Dwaalboom. The mineral is an absorbent in cat litter and oil and i s a carrier in fertiliser. Sephaku Holdings is optimistic about tin, copper and fluorspar mineralisation at its site west of Mokopane. Another property at Century/Hoekberg in the Bela-Bela area is also being investigated for tin deposits.

small business

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small business

SMALL MIRACLES Unemployment in South Africa is at a ten-year high and dark clouds are gathering on the countryâ&#x20AC;&#x2122;s economic horizon. Under these conditions, where will the muchneeded economic growth come from? Who will create the jobs that will pull South Africa out of the spiral of economic decline and social unrest? By Nathaniel Kiewiet

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small business

outh Africans have tended to look at big and the Western Cape, sporting the largest share of business or government for solutions. formal SMMEs. They tend However, with economic growth spluttering to be found in sectors with a low start-up cost, such as along, big business, on the one hand, is trade and accommodation, and other service sectors. not about to SMMEs in the informal soak up large sector especially, provide a scores of the unemployed; sustainable living for a Government, on the other, great number of people in is similarly unlikely to the country, black and further expand the civil white. Most SMME owners service are black (71%), followed or social grants system, by whites (20%), though SMMEs contribution to unless they are willing to the latter has been face a fiscal cliff and all declining. GDP has shown steady the pain that that entails SMMEs contribution to growth in recent years, not much further down GDP has shown steady the road. growth in recent years, up up from 33% of GDP in 2010 from 33% of GDP in 2010 to 42% in 2015. In contrast, to 42% in 2015. In SMME basics contrast, SMME growth The National Development SMME growth in countries in countries like Ghana, Plan (NDP) states that by Nigeria and Kenya have 2030, 90% of new jobs like Ghana, Nigeria and be close to spectacular. will be created by Kenya have be close to What, therefore, is SMMEs. The Black preventing a similar Economic Empowerment spectacular. What, therefore, upsurge of entrepreneurial Commission, an initiative is preventing a similar energy in South Africa? of black business, also stresses the importance upsurge of entrepreneurial of SMME development Obstacles in the energy in South Africa? for broad based black way of SMMEs empowerment. A number of obstacles Most SMMEs operate continue to suppress in the informal sector, SMME growth. According especially in more rural to the South African provinces, with the Institute of Chartered provinces with larger Accountants, SMME economies, like Gauteng growth is hampered by the inefficiency and complexity of government bureaucracy, strenuous AND THAT IS WHERE SMMES COME IN B-BEEE codes and the complicated tax regime. Unemployment in South Africa has grown to between Interdepartmental conflicts and a lack of co-ordination 26 and 27% of the economically active population, are considered among the most important obstacles. with youth unemployment lying at a socially explosive Especially in the rural areas SMMEs are hampered 54%. However, government debt has grown from some by poor infrastructure and difficult access to markets, 27% of GDP in 2008 to 50% in 2016, creating pressure for which in turn makes it difficult to raise the money austerity measures and making it difficult to use the state needed to get their businesses going. to create employment. At an annual GDP growth rate of South Africaâ&#x20AC;&#x2122;s tough labour laws also force many only some 6% big business is also more likely to shed jobs owners to fall back onto family labour, ultimately than absorb labour. Against this background economists restricting their ability to grow their enterprises. and policy makers are increasingly turning their eyes to SMMEs are also particularly vulnerable to crime, the SMME-sector. with high spending on security depressing small

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small business

businesses. Not surprisingly, the survival rate of SMME start-ups is low, with most lasting no longer than some 3.5 years, which greatly limits their job creation potential.

Turning SMMEs into job creators Recognising difficulties faced by SMMEs, the Department of Trade and Industry (DTI) has proceeded to consolidate several pre-existing support initiatives into the Small Enterprise Development Agency (SEDA). SEDA’s mission is to support and promote SMMEs throughout the country, thereby strengthening local economies and widening SMME participation in the national economy. SEDA develops incubators for small businesses and encourages partnerships between SMMEs and big businesses to improve their access to skills and marketing opportunities. SEDA was recently transferred to the newly established Department of Small Business Development, which aims at promoting SMME development and job creation through public and private sector procurement. The department also facilitates partnerships and

KEY SMME INDICATORS (STATS SA, Number of SMMEs

1 497 860

Number of informal SMMEs SMME owners as % of total employment % operating in trade & accommodation

Way forward

Government has clearly recognised the value of SMMEs for the economy and job creation and has set in place a sophisticated network of supporting institutions. However, the regulatory environment continues to restrict SMME development. An interesting bottom-up innovation to emerge in recent years, is the use of the traditional township Stokvel (a community-based and collective fundraising initiative) to raise funding for investments in SMMEs and other businesses. It serves as a prime example of how local innovation, relying on home grown 2015) solutions, can provide the upsurge of creative social 2 251 821 energy needed to chart a new way forward.

667 433

Number of formal SMMEs

coordination between different spheres of government and aims to create a regulatory environment that is more conducive to small business development. Outside of government, several initiatives such as the Small Enterprise Foundation and Khula have been launched to provide SMMEs, especially microenterprises with access to capacity building, training and capital. SMMEs can now bargain with a wide range of potential funders and supporting institutions that focus on special interest groups, such as women, or that have an industry or geographical focus.

14% 43%

By Nathaniel Kiewiet http://www.southafrica.info/ http://www.tradingeconomics.com/ Prof. Jannie Rossouw, Fanie Joubert & Adele Breytenbach, 2013. “South Africa’s fiscal cliff: a different meaning to a well-known concept.” ERSA public economics workgroup meeting, 16 & 17 May 2013. http://www. econrsa.org/system/files/workshops/presentations/2013/ south_africas_fiscal_cliff_combined.pdf

14%

% operating in community services

13%

% operating in construction % operating in financial & business services

12% 42%

% contribution to GDP

34%

% black owned formal SMMEs % operated by income group ≤ R30K p/a

Bureau for Economic Research, 2016. “The small, medium and micro enterprise sector of South Africa.” Small Enterprise Development Agency (SEDA), research note 1.http://www.seda.org.za/Publications/Publications/ The%20Small,%20Medium%20and%20Micro%20 Enterprise%20Sector%20of%20South%20Africa%20 Commissioned%20by%20Seda.pdf Small Enterprise Development Agency (SEDA): www.seda.org.za/ The South African Institute of Chartered Accountants (SAICA), 2015. “2015 SME insights report.” http://www.saica.co.za/portals/0/documents/saica_ sme.pdf

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agriculture

OPPORTUNITY KNOCKS By Bongani Quoma

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agriculture

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agriculture

hy have investment connoisseurs from across the globe been turning their attention to the South African agroprocessing sector? After all, global growth is down. Internationally the fresh produce industry has drastically rationalised supply chains, weeding out smaller producers and placing producer profits under pressure. Investors seeking higher riskadjusted returns have often been discouraged by what they view as unfavourable risk and returns analyses in Africa in general. In South Africa too government spending, political turmoil and bad press have contributed to general jitters about the economy. Under these difficult circumstances, what still attracts investors to South African shores, never mind agroprocessing? These boxes are not easy to tick anywhere.

The answer, of course, is found in both global and local fundamentals. Faced with dropping commodity prices and sluggish returns in traditional sectors, financial investment communities across the globe have turned towards agriculture and the agroprocessing industry. These sectors are viewed as a vast and untapped investment market that can provide the shrewd investor with high, risk-adjusted returns.

South Africa attracts the interest of these investors because of its strong and diverse traditional agricultural industry and R50 billion plus agroprocessing industry. Agroprocessing in sectors like citrus, stone fruit, and grape sectors, for instance, already have established export channels into the North American, European, Eastern and Asian (and increasingly African) markets. According to the Department of Trade and Industry there are huge investment opportunities in agroprocessing projects for items such as wheat, soy bean, vegetable oils, red meat, tomato concentrates, industrial starch and more. What makes the South African agroprocessing industry especially interesting is the trend towards the consolidation of production and processing and the involvement of diverse role-players in co-operative economies of scale. The various agricultural sectors are increasingly characterised by Public Private collaboration aimed at setting in place stable institutional frameworks, involve critical partners like labour in collaborative projects while facilitating access to capital and expertise. These frameworks of â&#x20AC;&#x2DC;embeddedâ&#x20AC;&#x2122; institutions greatly enhance stability and reduce risk exposure. Of considerable importance in this regard are South Africaâ&#x20AC;&#x2122;s competitive infrastructural and logistical fundamentals. The harbours in Cape Town, Kouga (Ngqura) and Durban are located near major agricultural zones, and each has an excellent road and rail infrastructure radiating outwards into the interior. Kouga, in fact, is the location of an Industrial Development Zone (IDZ), which aims to attract local and foreign direct investment into a range of medium, large and mega export-orientated projects. The region has a Mediterranean climate and sports a diversified agricultural economy with a wide range of products and crops, including citrus and deciduous fruits, pineapples, essential oils, vegetables, ostrich products and poultry, wool and mohair. The Couga Development Corporation (CDC) is also busy with a R 2 billion (USD 200 million) aquaculture initiative in the IDZ; an indication of things to come.

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agriculture

The Witzenberg Partnership - an alliance between the Indaba in Cape Town (28 – 30 November) facilitates Witzenberg Municipality, the agricultural sector, local focused Investment Discovery Sessions in, amongst communities and a range of other stakeholders - is others, the agroprocessing industry. A joint venture of the another example of investment opportunities under African Agri Council, the Western Cape Investment and construction. The Witzenberg Municipality falls within the Trade Promotion Agency (Wesgro) and the Western Cape Cape Winelands Region, which is responsible for almost a Department of Agriculture 2016), the conference has third of South Africa’s production and export of apples attracted capital-heavy international investors like and pears, and more than 50% of the production of Camscorp, Octapus Investments, AEGIS Investments, nectarines. Collectively the gross annual value of these the CDC Group, UK Development Finance, Deutsche fruits exceeds R2bn and more than R1.5 billion in foreign Bank and more. exchange earnings. The region also produces fruit like Working through intermediaries such as these, apricots, plums and peaches and investors are therefore able to significant quantities of link up with agribusiness and vegetables including onions, agroprocessing projects quickly butternuts, and potatoes. and efficiently, often also The main thrust of the securing co-financing and Witzenberg Partnership, is to value-adding local partners. The Witzenberg Municipality enhance crop production while Opportunities also exist in simultaneously expanding land economically more vulnerable falls within the Cape and enterprise ownership to agroprocessing sectors, such Winelands Region, which farm labourers and community as poultry processing. Grain members. It is a highly Fields Chickens in the Free is responsible for almost coordinated initiative that State Province, for instance, identifies projects, liaises with was established in 2012 as a a third of South Africa’s role players, provides planning subsidiary of VKB Agriculture, production and export of support and access to finance. with the Industrial DevelopThis construction of mutually ment Corporation (IDC) as a apples and pears, and more supportive ‘nested institutions’ partner. Four years later it is than 50% of the production provides the initiative with a expanding production in this high degree of stability, reducing price-sensitive market despite of nectarines. risk and enhancing the import of cheap American effectiveness. chicken meat. An apparent As such the Witzenberg factor in their ability to deal Partnership (recently renamed with this uneven competition the Witzenberg PALS and appears to be their knowledge established as a non-profit company) deals with one of the local market and target range of products. of the biggest challenges faced by local and foreign This example highlights one of the most important investors, namely the identification of investmentfactors that investors should consider when perusing ready opportunities with well-defined business plans opportunities in the South African agroprocessing and solid management structures. Of interest to the industry, namely that the industry’s strong foundations in agroprocessing industry is the 20-plus value adding local knowledge and scientific expertise gives it an edge on projects that have been identified. Overcoming this foreign competitors. obstacle clearly requires the involvement of intermediaries that help to close the gap between Sources: the investor and investment opportunities. The African Agri Investment Indaba (AAII):

This penny has dropped on both national and provincial level. Facilitated by the Department of Trade and Industry (DTI), an Intergovernmental Clearing House will soon provide a One Stop Shop for all investors. On a provincial level, initiatives such as the African Agri Investment

www.agri-indaba.com/ Camscorp Website: https://angel.co/camscorp’ Couga Development Corporation: www.coega.co.za/ Western Cape Investment and Trade Promotion Agency: www.wesgro.co.za African Agri Council: www.agricouncil.org Witzenberg PALS: www.wpals.co.za

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LIMPOPO’S AGRICULTURAL ACTIVITIES CONTRIBUTE TO GLOBAL FOOD SECURITY Some of South Africa’s biggest agricultural businesses are located in the Limpopo Province with fruit and vegetables forming a significant portion of the nation’s export offering. This is particularly the case with regard to avocadoes, mangoes, tomatoes and macadamia nuts, the last of which is a rapidly expanding sub-sector. These large agricultural activities in the province contribute to national and global food security hence a national rural development strategy has been established by the National Department of Agriculture, Forestry and Fishers (DAFF), to look into strengthening the food security. The entire value chain of agriculture is under scrutiny, with the aim to help small-scale farmers by improving infrastructure, creating new markets and assisting them to gain access to the to the big buyers such as supermarkets. Government planning at provincial level includes the promotion of meat “clusters” along all the development corridors identified in the province. These include the promotion of hygienic practices, the establishment of small-scale abattoirs and assistance in the marketing of products. Limpopo has about one-million beef cattle, about 8% of the national herd. A new indigenous breed of cattle has been developed from breeding Pinzgauer and Nguni stock. This is an initiative of the farming group that grows the ZZ2 tomato, with the name derived from the famous European breed and the name of the farmer who started it all, Mr Bertie van Zyl. Limpopo’s location gives it a strategic advantage in terms of providing fresh produce to Gauteng, the densely urbanised economic centre of South Africa. Cattle and game ranching occur in the higher and drier areas of the province, while the lower-lying regions are rich in fruit, tea, citrus and vegetables. One of the best known products of the region is Amarula cream liqueur.

Within Limpopo the Mooketsi Market has used its very central position to boost trade in farming produce, Although the town, Mooketsi quite small, the market’s location north-east of Polokwane and north of Tzaneen, with ac cess to the northern reaches of the province via R36 and R81 roads, has proved a winner since it opened in 2014. The market is owned by ZZ2, FGX (which facilitates transaction between buyers and sellers) and the RSA Group (which holds 30% representative market share of the fresh produce market in South Africa). The Limpopo growers from Vhembe Districts in the far north and the Letaba Valley in the eastern Mopani District contribute 45% of the produce sold at the Johannesburg Fresh Produce Market, Africa’s biggest market. The Levubu Valley in the North is particularly fertile with guavas and macadamia nuts among the crops that thrive there. Valley Farms is a successful enterprise that grows fruits such as mangoes and guavas and produces concentrates purees and dried fruits. The revival of the Tshivhase Tea Estate has only given South Africans a truly local tea; it has also boosted the employment in Limpopo. Cotton is grown at Loskop, North and South Flats, Wiepe and Dwaalboom/Thabazimbi. There are 2 855 hectares under irrigation and a further 326 hectares of dry land operations. Limpopo provides about 32% of the national harvest. Most of South Africa’s citrus and subtropical fruit comes from the eastern part of Limpopo. Soft and time-sensitive fruits, like avocados, are exported out of the Port of Cape Town and transported to that city by truck citrus is taken to the ports of Durban or Maputo. The Limpopo Economic Development Agency (LEDA) has identified specific investment opportunities; private partnerships to resuscitate state irrigation schemes, cut flowers, baby vegetables, almonds, tablegrapes and pork. Sunflowers, soya beans and maize are other crops all of which hold great potential for growth. Amazingly the demand for fish in Iran may mean that small water bodies in the Sekhukhune District will be devoted to cultivating fish. The Phethwane integrated Aquaculture Project stalled after a bright start in 2011, but a Fishery Imbizo held at the Tompi Seleka College of Agriculture in Marble Hall aimed to resuscitate the project. The goal is to supply 500 tons of fish.

energy

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energy

LINES OF

POWER Eskom is optimistic it will have enough surplus energy supplies to meet South Africa and its neighboursâ&#x20AC;&#x2122; needs by 2030 By Cathy Dippnall

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energy

t’s been over a year since the energy crisis hit South Africa, causing millions of homes and businesses to be without power for large stretches at a time; it seemed to almost bring the country to its knees. This was due to years of underinvesting in the country’s energy infrastructure, which saw demand rising faster than the government’s power utility, Eskom could produce. To overcome the energy shortfall Eskom and the Department of Energy started an infrastructure programme to redress the imbalance, but it was just too much for the power utility during winter 2015, when setbacks and challenges from its aging stock, caused rolling power outages. Fortunately, Eskom’s build projects are now coming on line. With a price tag of about R340-billion, new power stations, including Medupi in Limpopo and Kusile in Mpumalanga have already started to come on stream to ease the deficit. With the third unit at the Ingula Storage Pump Scheme in the KwaZulu Natal (KZN) midlands/ Drakensburg region now in operation, it can add an extra 333MW to the national grid during peak times. “I’m

pleased to say that Ingula is one year ahead of schedule,” says Eskom CEO Brian Molefe. He explains that once Eskom’s build projects are completed the country’s energy generating capacity should reach 10,000MW. Molefe adds that there may well be enough surplus energy to use in South Africa to build economic growth, or to sell elsewhere on the continent.

Nuclear power could produce cheap clean energy for consumers Despite unfavourable reaction from civil society, Eskom it still pursuing nuclear power to build energy capacity. “Nuclear energy will help reduce energy costs to consumers as it is cheap and clean to produce,” explains Molefe. “However, the final say will come from Cabinet, as it is a policy-level decision, but Eskom would own and operate such plants.” At present Koeberg power station in Cape Town is the only one in South Africa, producing 4 percent of the country’s energy needs. Government is eager to increase nuclear capacity to 9.6GW by 2030, which would come on line as and when funded, and has appointed the

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energy

companies in these two Department of Energy to manage countries have discovered that the procurement, while Eskom will the region is suitable for growing own and operate the nuclear plants. sweet sorghum and related In a statement Eskom says that “WANO says that it products that can be marketed in the World Association of Nuclear Asia. This is per the United Operators (WANO), an organisation prefers Eskom to become States’ Bio-Processing Innovation dedicated to improving nuclear the owner-operator as and the Beijing Singling safety standards, has said it will Technology Centre. support Eskom with its nuclear it not only gives Newton Baloyi, who expansion programme. represents the partnering “WANO says that it prefers WANO an experienced companies, says they plan to Eskom to become the ownernuclear utility to increase plantings of sweet operator as it not only gives sorghum despite drought WANO an experienced nuclear interface with but this conditions that has seen the utility to interface with but this also places nuclear production of sorghum declining. also places nuclear accountability The project, which includes firmly in the hands of a stable accountability firmly sugar production and the state-owned company.” alternative energy source of Eskom is also committed to in the hands of a stable ethanol, would be established training local talent and has state-owned company.” from 15 000 ha of land within a launched a skills programme to reasonable radius. “The current train 100 artisans, technicians drought should not be a major and engineers in the nuclear field cause for concern for those who to prepare for the future build. are keen on injecting resources According to the utility, which is into sorghum production. Some of the benefits include the enrolling up to five nuclear engineering PhD candidates production of clean and renewable energy and flexibility every year, it takes up to six years to train a nuclear to produce ethanol or sugar and valuable by-products.” reactor operator. said the late Joy Matshokge, who was Limpopo MEC for Agriculture and Rural Development, at the time of the Plans are in place to unlock 6 000MW announcement earlier this year. She also asked that the of power by independent renewable investors impart their knowledge and skills to local energy producers sorghum growers. Government has committed to generating 13,225MW of The project, when completed, is expected to unlock renewable energy by 2025, in terms of the Integrated production and turn previously unproductive land into Resource Plan. Of this 6 000MW will be produced and on productive land adding to Limpopo’s current production stream by 2020, by over 90 independent producers. Since of 14 percent of the country’s total grain sorghum mid-2015, 37 independent producers have added production. 1,860MW to the national grid. Since then three wind The production of grain sorghum decreased from farms and three solar plants are operational and have 32 000 tons in 2014 to 17 600 tons in 2015, despite the added another 270MW to the grid. area planted increasing from 14 000 ha to 16 000ha last Molefe explains that Eskom is committed to further year. This was attributed to the continued drought increasing its renewable projects after South Africa signed conditions that have gripped the province and South the climate change agreement in Paris. Signatories to the Africa. However, the historical track record for growing agreement will be forced to move over to a low-carbon sorghum shows continued promise for farmers, as the economy. This means that if South Africa keeps to the grain is versatile and renowned for its resilient qualities. climate change agreement it cannot build any more “South Africa is fully committed to pursuing a broad coal-fired power plants. and diversified energy mix, including independent renewable energy producers and the Nuclear New Build Renewable energy projects could unlock production and activate unproductive land Programme, which is in support of government’s programme of economic growth and development,” says Limpopo will benefit from a R940m renewable energy Minister of Energy, Tina Joemat-Pettersson. investment from China and the United States, as

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sez

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sez

TRANSFORMING

THE LIVES OF THE PEOPLE The South African government’s Special Economic Zones (SEZ) programme is set to right the wrongs of the Industrial Development Zones (IDZs) initiative and become the saving grace of the country’s struggling economy. Chantél Venter explores what effect the SEZ programme will have on the economy, the towns and local communities, as well as how investment into these zones are shaping up so far.

t is no secret that the South African economy is not what it should be. Amidst the worst drought the country has experienced in over a century, SA is also battling with an unemployment rate dauntingly close to the 40% mark and a poorly functioning currency. Irrespective of the doom and gloom, the country still remains a burning beacon for foreign investment. Through initiatives like the Special Economic Zones (SEZs) programme, Government aims to boost the economy by making investment more enticing, not only for foreign investors but also for domestic ones.

Righting The Wrongs Of The IDZs In 2000, the Government launched the Industrial Development Zones (IDZs) programme, which was aimed at attracting direct foreign investment and enhancing exportation of manufactured products. Over the past 16 years five IDZs were established namely: Coega; Richard’s Bay; East London; Saldanah Bay and Dube TradePort. Although the IDZs attracted considerable investment and lead to the creation of 5000 direct jobs, it also unveiled weaknesses like poor governance, a lack of integrated planning and a bias towards coastal regions. In addressing these challenges, The Department of Trade and Industry (the dti) identified the Special Economic Zones (SEZ) programme, which would build on the successes of the IDZs and reach the true economic development goals envisaged for the country.

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sez

The SEZs Explained

economic relationship with China, saying: “The size of this investment demonstrates confidence by China and After the successes experienced by the IDZs, the SEZ confidence in South Africa as an investment destination.” programme absorbed the initiative as one of its categories Davies also said that this investment has the potential to to further the goals it set out to achieve. The other three position the Eastern Cape as an automotive hub. categories are Free Port, Free Trade Zone and Sector Development Zone. Apart from securing economic growth, the SEZs main The change a SEZ can bring to goals are to create a better life for the people of South Africa. a community During a seminar on the SEZs Programme held in July, Since its inclusion as an IDZ in 2013, Saldanha Bay has Alfred Tau, Chief Director of SEZs and Economic secured R13-billion investment from Transnet as well as a Transformation at the dti said: “The Special Economic substantial investment from Government. In a radio Zones Programme is about transforming the lives of the interview on Cape Talk, Juliet Prowse, programme people of this country in various provinces and regions. director at Accelerate Cape Town, said that the majority The ultimate objective is to create wealth, eradicate of the investments in Saldanah “are mainly around the oil poverty and make sure that job opportunities are available and gas industry, rig repair, marine manufacturing, oil and so that people can get employment.” gas servicing and ship building”. Although these According to Tau, the road to sustainable economic investments are directly benefiting larger businesses in prosperity is through industrial the zone, she says the support development. He added that “the services around the SEZ will [SEZ] programme will accelerate start benefitting and developing industrialisation, development and smaller business as well. “the [SEZ] programme will growth, attract foreign and “Part of what goes into these accelerate industrialisation, kinds of projects is looking at domestic direct investment, grow and diversify value-added exports, what is required, what skills do development and growth, and accelerate job creation.” we need to develop and how can attract foreign and How appealing are SEZs making we work with the local it for investors? Substantially. community to upskill and create domestic direct investment, Businesses operating within an SEZ employment for people living in benefit from a special 15% corporate Saldanha,” Prowse added. grow and diversify valuetax, and various other tax incentives, Apart from the five initial added exports, and an Enhanced Funding Strategy, IDZs, ten other SEZs have been Infrastructure Strategy, Skills And identified, some of which are still accelerate job creation.” Supplier Development as well as a undergoing feasibility studies. One Stop Shop (OSS) Strategy that Recently, Musina-Makhado in makes it less expensive and tedious Limpopo passed the feasibility to obtain permits and licenses in order to locate to an SEZ. test and gained SEZ status. Shortly afterwards, it was announced that a Chinese consortium plans to invest R40-billion in an industrial park in the SEZ, which will Recent investments into the SEZs lead to around 21 000 jobs. At the launch in July of Phase programme One of the Seshego Industrial Park hosted by the dti, the The SEZs programme is already reaping rewards in the zones MEC for Economic Development, Environment and that have been identified. Recently, Cipla BIOTEC, the IndiaTourism in Limpopo expressed his gratitude to the dti for based pharmaceutical giant, signed a Memorandum of this decision. He said that this inclusion would help Agreement with the KwaZulu-Natal Dube TradePort SEZ for Limpopo reduce unemployment by 14% and grow the a biosimilars manufacturing facility. This will be the first economy by 3% by 2019. facility of its kind in SA, and will boast a commercial Even though Atlantis is still waiting to learn if it will be investment of R1.3-billion and 180 permanent jobs. included as an SEZ, investment in the town is rolling in. In August the Chinese automotive BAIC group The town has received R700-million of investment for announced an R11-billion investment in Coega IDZ renewable energy manufacturing. With results like these it through an automotive manufacturing plant planned for goes to show that innovative initiatives like the SEZs Nelson Mandela Bay. According to a statement released by programme has the potential to bring the transformation the dti, Minister of Trade and Industry, Dr. Rob Davies, the the country and its people are hungry for. investment is a significant one for the future of SA’s

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TUBATSE AND MUSINA The Limpopo Province of SA invites all mining and related organisations to explore investment possibilities in the province. The Province has launched the Special Economic Zones initiative (SEZ), which has the full backing of the South African government. It is strategically placed not only to service SA, but ideally placed to increase an African footprint with low risk. Two special initiatives are underway, namely Tubatse Platinum SEZ and Musina-Makhado, SEZ.

Tubatse Platinum SEZ (Tubatse) Tubatse is located in Fetakgomo Greater Tubatse Municipality in Steelpoort Limpopo Province. The development is between two

production of vanadium pentoxide vanadium pentoxide for the production of vanadium redox batteries; steel production for stainless steel; mining inputs (valves, pumps, processing plants). The location of this SEZ is supported by infrastructure in the form of water from the newly built De Hoop dam and interconnecting roads with Middleburg and Polokwane and electricity supplied by Eskom. Tubatse has five priority clusters offering benefits to companies that establish a base of operations there. These are: iron ore cluster; vanadium cluster, chrome cluster; platinum cluster and mining inputs cluster.

Musina-Makhado SEZ (Musina) Musina is an inland development. The following opportunities exist: skills development and skills transfer; industrialisation; empowerment research and development. Competitive and comparative advantages support the establishment the opportunities: Geographic location of Musina relative to SADC; gateway to Africa; low cost infrastructure; access to available labour; access to networks of road and rail infrastructure; trucks and strong international logistics companies already use the route; volume logistic and people movement through the border; of SADC and the rest of Africa; increase of vehicle sales and motor related activities

ferrochrome smelters and within a 30 km radius of 17 operating mines and 22 new mines that are being developed. This places the SEZ in the heartland of platinum and chrome mining in Limpopo Province. The SEZ is classified as a brownfield, because it includes 13 000m₂ of lettable space. If there is a need for specialised industrial space, there is 80 000m₂ of developed industrial land, which can be used to develop top structure according to clients’ needs. Since the development started, an investment of approximately R4,2 billion with an estimated 2000 jobs have been secured. Further investment is required in the following clusters: Chrome to ferrochrome and chrome chemicals; magnetite for production of pig iron and steel; magnetite for the

in Africa. Musina-Makhado SEZ infrastructure needs the following: full transport and suppliers needs; full water supply; full sulage and other water treatment; full energy needs; full solid and industrial waste management needs; full communication needs; green building demands and further municipal services demands.

A full range of business solutions Nedbank oﬀers relevant ﬁnancial and advisory services to clients throughout Mpumalanga

Whole-view Business Banking™

As part of the strategy to attract new clients and retain existing clients who believe that they need to spread their business across best-of-breed financial institutions in South Africa, Nedbank has introduced Whole-view Business Banking™. We can create unique business and financial solutions together with our clients because we have a whole view of their businesses. By partnering with Nedbank you are able to get a better perspective of how money needs to flow optimally through your business operations so that you can reach your goals. Whole-view Business Banking™ provides a more holistic and integrated business solution. What do clients get from Whole-view Business Banking™? Trusted partnership advice from a dedicated, knowledgeable, local client service team based in your region, supported by a team of specialists who will ensure that engagement with you is personal, valueadding and seamless across multiple areas, including: • working capital management; • cash-handling and card solutions; • global trade solutions; • payment and receipts management; • a full range of investments products; and • secured and unsecured financing. Nedbank Business Banking’s team in Mpumalanga, led by Loderick Lubisi, offers a full range of financial and advisory services to businesses in and around the province. The bank’s expertise, combined with a deeper understanding of the local economy, allows us to provide you with relevant, timeous solutions that can take your business further. 'We believe that businesses need a financial partner that not only understands their circumstances and aspirations, but also can provide them with relevant solutions and a banking experience that is hasslefree, allowing them to concentrate on what’s most important to them — the running of their business,' says Lubisi.

A full range of business solutions for the agrisector

As agriculture is a large part of the Limpopo economy, Nedbank Business Banking is committed to partnering with the agricultural sector on issues of sustainability. We recognise the importance of agriculture as well as its impact on the environment and the communities it supports. Against this backdrop Nedbank has formed strategic partnerships with stakeholders in the agricultural sector to gain a better understanding of the challenges in this sector and to contribute to the development of eﬀective and sustainable agriculture initiatives. The bank’s three-year R8,3 million investment, announced in 2012, into WWF-SA’s Sustainable Agriculture Programme is just one example of the integrated approach we take to encourage and enable sustainable agriculture at all levels of the industry and society. As a response to the current drought farmers face, Nedbank, through the Agri SA Drought Disaster Fund has

The Nedbank Business Banking team (from left to right): Front row: Danie van Niekerk Area Manager Credit: Limpopo Loderick Lubisi Regional Business Head Innocent Mafahla Area Manager: Limpopo Back row: Victor Masiagwala Business Manager Masedi Errol Mocheki Business Manager Marcia Muthathi Business Manager Public Sector Thondani Muthathi Business Manager

contributed R1,7 million to several initiatives, including donations through Gift of the Givers.

Why businesses should join Nedbank

There are several reasons why businesses should join Nedbank and some of these are discussed below: • A single point of contact A business manager, located in your region and supported by a team of specialists, is dedicated to servicing your business and managing your banking needs, whether your business is just starting, or established and growing. • Easy access – anytime, anywhere Entrepreneurs are constantly on the move. That’s why Nedbank offers a wide choice of innovative banking channels to ensure you are always connected. Bank with us online, through our contact centre, on your mobile device with the Nedbank App Suite™ or through your business manager. • Hassle-free banking and application processes We want you to focus on growing your business, which is why dealing with Nedbank is easy. Our simplified application process and prearranged finance mean quicker decision making and facility enablement. • Seamless offerings for you, your employees and your household Because the financial affairs of your household and your business are often intertwined, we give you access to a personal banker who not only understands our full spectrum of individual solutions, but also understands you and your business. And with Nedbank @ Work we bring banking to your premises to ensure your employees are financially fit. • Industry-tailored solutions Specialist industries require specialist solutions. Nedbank has designed solutions that address the specific needs of the franchising, agricultural, professional and medical sectors. Speak to our team of specialists, who have first-hand knowledge and experience in these industries. For more information about our specialised service offering in Mpumalanga and Limpopo please contact Loderick Lubisi at loderickl@nedbank.co.za. Nedbank Ltd Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16).

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SEE MONEY DIFFERENTLY WITH

WHOLE-VIEW BUSINESS BANKING

With Whole-view Business Banking™ from Nedbank, there’s one bank with one view across your business, allowing us to create unique business and financial solutions together. You’ll get partnership advice from a dedicated local client service team, supported by a team of specialists. By having the full picture we’ll have a deeper understanding of your business, which will take it further than ever before.

Sometimes, a change in approach can change everything. Partner with Nedbank today. Email us at business@nedbank.co.za.

Nedbank Ltd Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16).

INSPIRE GAUTENG TRADE, TOURISM AND INVESTMENT CONFERENCE AND EXPO JOHANNESBURG 2017 The objective of the conference is to lead, facilitate and market the projects primed for investment through co creating partnerships in order to stimulate job creation and economic growth and development for the Gauteng province.

Inspire Communications Contact: Mark 083 352 3023 | mark@inspiresouthafrica.co.za Graeme 082 735 5881 | graeme@inspiresouthafrica.co.za

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