Towards the land of smog?

Date: 28 July 2019 By: Anton van Zyl

Will the Soutpansberg resemble eMahlahleni or Middelburg within the next few years, with smoke bellowing from the large factories visible for dozens of kilometres? Based on the number of coal-driven factories planned for the Musina-Makhado special economic zone (SEZ) project, this is a distinct possibility.

During the Limpopo Premier’s State of the Province address, he made specific reference to the SEZ near the border. “In an effort to get the construction work started at this SEZ, I have since directed the MEC for Economic Development, Environment and Tourism to fast-track the finalization of the environmental impact assessment (IEA) and the adoption of the internal master plan by October of this year,” said Premier Stan Mathabatha.

The premier was optimistic that the planned SEZ will create thousands of jobs. “It is also worth mentioning that, due to the increasing investor appetite in this project, our initial target of creating 21 000 jobs is set to be revised upwards,” he said.

What is very clear is that different role players are getting impatient and want to fast-track the process. During April this year, a meeting was held in Beijing. This meeting was attended by representatives of the South African Department of Trade and Industry, the Limpopo Provincial Government, the Limpopo Economic Development Agency (LEDA) and the SEZ operator, South African Energy Metallurgical Base (Pty) Ltd. In a report published on the Emsez website (www.emsez.com), the indication is given that, during this meeting, LEDA gave a detailed explanation on the progress of the EIA, saying that it would be completed by the end of August this year.

What factories will be built?

The chairman of the SEZ operator, South African Energy Metallurgical Base (Pty) Ltd, is Mr Ning Yat Hoi. He has had his fair share of bad press over the past few years, and in April 2017 he was removed as CEO of the international mining group ASA Resources, following alleged irregularities. Hoi and the company’s financial director, Yim Kwan, were accused of transferring “several million dollars” from the accounts of its 85%-owned Freda Rebecca gold mine (FRGM) to entities in China, without full value being received by FRGM. Freda Rebecca is the largest single gold mine in Zimbabwe.

On the Emsez website, an interview that Hoi had with a reporter from the China Reform Daily, Lei Mao Sheng, is published. The article, published in May this year, gives more clarity on exactly what is being planned at the Musina-Makhado SEZ.

Hoi explained that an operator permit had been issued to them by the SA government to develop, operate and manage the Energy Metallurgical Special Economic Zone (Emsez). “It covers an area of 60 square kilometres and is adjacent to Zimbabwe, Mozambique and Botswana,” he said.

According to Hoi, a 20 Mtpa (million tons per annum) coal-washing plant, a 3 300 Mw coal-fired power plant, a 3 Mtpa coke plant and a 390 Mw waste-heat power plant will be built. The other factories planned are a 3 Mtpa high-carbon ferrochrome plant, a 1 Mtpa ferromanganese plant, a 500 000 tons per annum (tpa) silicon manganese plant, a 3 Mtpa stainless steel plant, a 1 Mtpa high-vanadium steel plant, a 1 Mtpa high-manganese steel plant, a 5 Mtpa metallurgical lime plant, a 1,2 Mtpa titanium dioxide plant and a 150 000 tpa vanadium pentoxide plant. “Our goal is to build the world’s most competitive energy metallurgical SEZ,” said Hoi.

Hoi mentions in the interview that the SA government had signed several memoranda of agreement (MOA) with international companies. The companies include the Power Construction Corporation of China, Taiyuan Iron & Steel (Group) Co, Ltd, China Metallurgical Group Corporation and Tengy Group Co Ltd.

Hoi is very optimistic about the prospects of increased trade between South Africa and China. “South Africa mainly exports minerals and metals to China. I have taken a fancy to its rich mineral resources. South Africa has more than 83% of the world’s chrome resources, manganese resources account for more than 81% of the world, and high-grade reserves of vanadium resources rank first in the world,” he said.

Hoi estimates that the reserves of open-pit coking coal mines around the SEZ are more than 10 billion tons. “There are other abundant mine resources as raw materials for stainless steel, including iron ore, silicon ore, nickel ore, limestone, etc.” he said. He reckons South Africa has a “natural advantage for the development of coal-fired power stations”.

Impact on the road infrastructure

The impact of the proposed SEZ on the road infrastructure in the region will be quite severe. In August last year, the general manager of communications at SANRAL, Mr Vusi Mona, said that the SEZ was bound to have a major effect on the whole of the Limpopo province. Mona wrote an opinion piece for Independent Online and said that the expected initial R40 billion investment would lead to at least eight large-scale industrial projects.

Mona mentioned that a ring road would be built that would skirt Musina and alleviate some of the traffic problems at the border town. “More than 1 000 heavy vehicles use the road every day and have to pass through the CBD of Musina. It creates major congestion in the town as well as conflict with local traffic and pedestrians. Damage to infrastructure is inevitable,” he said.

SANRAL awarded a contract of R625 million to Basil Read in late 2015 to build this road and construction commenced in April 2016. When Mona’s opinion piece was published, he was confident that the project would be completed by the end of April 2019. Unfortunately, all work on this project was stopped when Basil Read filed for business rescue on 14 June this year because of cashflow problems. The company was placed under business rescue a day after their application on 15 June.

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Anton van Zyl

Anton van Zyl has been with the Zoutpansberger and Limpopo Mirror since 1990. He graduated from the Rand Afrikaans University (now University of Johannesburg) and obtained a BA Communications degree. He is a founder member of the Association of Independent Publishers.

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