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Some of the stakeholders who attended last week’s follow-up meeting at the Makhado Tourism Information Centre about the proposed Makhado/Musina SEZ. From left to right are Ntsieni Mbulungeni (Thulamela Business Forum), Barbara Cawood (Musina Beit Bridge Chamber of Commerce), Iain Purdon (SPB Chamber of Commerce), Abby Lehola (Makhado Business Forum), Clement Mulungwa (Standard Bank Louis Trichardt), Peter Mundel, Lance Fenn, Jaco Voigt (SPB Chamber) and Jamy Jonker (secretary of the SPB Chamber of Commerce).

Proposed SEZ years away from becoming reality

 

Despite the government's efforts to promote it as one of their flagship developments to boost economic growth in the Soutpansberg region, the proposed Makhado/Musina Special Economic Zone (SEZ) is still years away from becoming a reality.

This became apparent during a follow-up meeting between the Soutpansberg Chamber of Commerce, other stakeholders, and Mr Lance Fenn, infrastructure, planning and implementation manager for the Musina/Makhado SEZ, last Wednesday. Fenn works on contract basis with the Limpopo Economic Development Agency (LEDA).

During the meeting, Fenn gave an outline of how far they are in the planning phase of the SEZ and explained how local businesses might be able to benefit from it. What became apparent, however, is that not everyone is enthusiastic about the project. Some stakeholders questioned whether the region will be able to cope with such a massive development programme as the Soutpansberg is already struggling with failing water and electricity infrastructure. It also transpired that opportunities for local business will mainly be secondary in nature by merely assisting the primary aim of the SEZ with regard to industrialisation.

In July last year, Cabinet approved the Makhado/Musina SEZ and a few days later, the Minister of Trade and Industry, Rob Davies, announced that an investment of more than R40 billion was expected for the proposed SEZ for the establishment of an energy and metallurgical industrial park. Following this announcement, Shenzhen Hoi Mor Resources Holdings Ltd signed a cooperation agreement regarding the Musina/Makhado SEZ with LEDA in Beijing. The company aims to establish an energy and metallurgical industrial park, consisting of power, coking, ferrochrome, ferromanganese, ferrosilicon, pig-iron metallurgy, lime, steel and stainless steel plants. The project was purportedly set to create 20 800 local jobs.

During the presentation, Fenn pointed out that the Makhado/Musina SEZ is unique in the sense that it will comprise two development sites – a 8 000ha site at Mopane and a 3 250ha development between Musina and the Zimbabwean border. Initial reports, however, only focused on the Mopane development site. The reason for this, Fenn explained, was that they had not yet secured an investor for the Musina site.

As for the Mopane development site, Fenn said that they were pushing ahead with the proposed development of an industrial park on a 6 000ha part of the site. The rest, he explained earlier, would be available for local businesses to invest in.

Apart from the Soutpansberg Chamber of Commerce, last week’s meeting was also attended by representatives of the Musina Chamber of Commerce, the Makhado Business Forum and the Thulamela Business Forum. “As far as I know, it is the first time that all four these business chambers and forums came together to give input into a project of such a vast magnitude,” said Mr Jaco Voigt, chairman of the Soutpansberg Chamber of Commerce. It became clear that the proposed SEZ is attracting huge interest.

Fenn warned again, however, that the proposed SEZ would not become a reality overnight. This became very clear during the question-and-answer session of the meeting. It also opened the door for those questioning the feasibility of the SEZ.

It transpired that an environmental impact assessment (EIA) has yet to be conducted with regard to the Mopane site. “We have called for service providers to conduct the EIA,” Fenn said, adding that the EIA study could take anything from 18 months to two years to conclude. “The problem is that nothing can happen until we get the EIA approved. Then we must get the water licensing and water supply in order. That can take another two years, so in all honesty, we are looking at four years before we see dust,” said Fenn.

The question of water supply was also a tricky one, with Fenn admitting that the available water supply line was already too small. He explained that they were looking at extracting water from the Limpopo River, but that they needed to negotiate water use with South Africa’s neighbouring countries (Botswana, Zimbabwe and Mozambique) as they all share water from the Limpopo. As for now, Fenn said that there was enough water for the first five to seven years of the construction process. He also mentioned the possibility of building a new storage dam to feed the SEZ, but for this a water license would also be required.

Another question that was asked was whether enough electricity was available for the project. In this regard, Fenn admitted that they had yet to talk to local municipalities about the availability of water and electricity. “We need to go and measure what we need and then ask the municipalities if they can deliver,” said Fenn. He added, however, that an own coal-driven electricity plant was being envisaged for the SEZ to generate its own power. As the SEZ will not focus on mining, this begged the question as to where the developers planned to get their coal from. It also raised the question as to how Coal of Africa Limited (CoAL) would fit into the whole picture, especially with CoAL’s renewed efforts to get their Makhado and Vele collieries up and running, although they also do not have a water license yet. “You must remember that we are competing with them for a water license,” Fenn said. Having said this, Fenn was at pains to point out that CoAL can be a major beneficiary to the SEZ as they [LEDA] have been in communication with CoAL in this regard.     

During last week’s meeting, there was also an enquiry as to why the government was willing to spend so much money on developing new industrial sites when the towns of Louis Trichardt and Musina are dying a slow economic death. The question was why the government and foreign investors were not investing in the existing towns. To this Fenn replied that it was easier to build new infrastructure than to repair and maintain existing infrastructure. “It is a lot cheaper,” said Fenn. Secondly, he said, both towns would benefit economically from the proposed SEZ by means of the upstream and downstream activities. “Like I said last time, you already have R40 billion [investment] and you will end up with R400 billion in the long run,” Fenn said with reference to the 20- to 30-year construction process of the SEZ. He remained adamant that the proposed SEZ would become a reality, to the benefit of the whole region, although not everyone was convinced of this.

News - Date: 27 May 2017

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The proposed SEZ site at Mopane. The Chinese company Shenzhen Hoi Mor Resources Holdings Ltd aims to establish an energy and metallurgical industrial park here, consisting of power, coking, ferrochrome, ferromanganese, ferrosilicon, pig-iron metallurgy, lime, steel and stainless steel plants. Map supplied.

The proposed SEZ site between Musina and the Zimbabwean border. This site will not yet be developed as there is still no investor. Map supplied.

 

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Andries van Zyl

Andries joined the Zoutpansberger and Limpopo Mirror in April 1993 as a darkroom assistant. Within a couple of months he moved over to the production side of the newspaper and eventually doubled as a reporter. In 1995 he left the newspaper group and travelled overseas for a couple of months. In 1996, Andries rejoined the Zoutpansberger as a reporter. In August 2002, he was appointed as News Editor of the Zoutpansberger, a position he holds until today.

Email: [email protected]

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