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Free State Business 2021

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The 2021 edition of Free State Business is the 11th issue of this successful publication that, since its launch, has established itself as the premier business and investment guide for the Free State. The Free State has varied investment and business opportunities and the Free State Development Corporation describes some of these in detail in these pages. Drilling for natural gas is a new phenomenon which may spark activity in other sectors and this journal notes significant new investments and projects in the chemicals and mining sectors. The official launch of the Maluti-A-Phofung Special Economic Zone (MAP SEZ) was a significant event for the economy of South Africa’s most centrally located province. Located on the strategically significant N3 highway that links the economic heartland of South Africa to the coast, the MAP SEZ has the potential to attract new investors and spark a revival in the manufacturing sector. In addition, overviews on each of the key economic sectors provide up-to-date information on trends in the mining and tourism sectors, for example. Regular information about the size and nature of each sector is also included.


OVERVIEW Mining Feasibility studies are exploring new gold projects. Diamonds, coal and gold are the main minerals found in the Free State but the decline of gold mining is a cause for concern. Several summits and a Mining Indaba have focussed on what kind of economic activity can replace gold mining. However, Sibanye-Stillwater is bucking the trend with the investigation of a possible new project next to its existing Beatrix mine. Gold prices rose appreciably during the Covid-19 pandemic. The mining sector makes up 11% of provincial GDP. A minerals beneficiation strategy has been developed because this is a key area for potential growth. Beatrix gold mine. Image: Sibanye Stillwater The Free State Provincial Government announced in February 2020 the creation of a company that will manufacture mining equipment, to be called Newco. Small mining companies have been promised technical support and with health and safety and access to beneficiation opportunities. Sibanye-Stillwater’s Beatrix mine, with a life-of-mine projected to 2025, produced 196 698 ounces of gold in 2019. Beatrix also holds 26.97-million pounds of uranium resources. Mining rights to the Southern Free State project adjacent to Beatrix have been approved and a feasibility study on part of it, the Bloemhoek decline, was done in 2019. The company reported that the Southern Free State property had surface and underground gold reserves of 2.1-million oz and mineral resources of 8.2-million oz. AngloGold Ashanti has sold most of its assets to Harmony Gold. Most of the mines are in the North West Province, but the Great Noligwa and Kopanang mines are in the Free State. The complex includes one uranium plant, four gold plants and one sulphuric acid plant. Online Resources Minerals Council South Africa: National Department of Mineral Resources: South African Mining Development Association: Sector Insight A new equipment manufacturer is planned for Welkom. These assets increased Harmony’s underground resource base in South Africa by nearly 40%. The mines include Tshipong and Phakisa (near Odendaalsrus), Virginia, Target (near Allanridge), Masimong (Riebeeckstad), Joel (near Theunissen) and Bambanani at Welkom. Phakisa has mineral reserves of just over five-million ounces of gold and Harmony has invested heavily in the project. Gold mines in the Free State also supply a substantial portion of the total silver produced in the country, and large concentrations of uranium occurring in the gold-bearing conglomerates of the goldfields are extracted as a by-product. Petra Diamonds’ Koffiefontein mine is on the western edge of the province, about 80km from Kimberley. The Voorspoed mine of De Beers Consolidated Mines closed in 2018. Coal is mostly found in the northern part of the Free State. The Sigma-Mookraal mine is run by Sasol Mining and has the capacity to supply Sasol Infrachem in Sasolburg with two-million tons of coal per year. Seriti Resources has purchased the New Vaal Colliery from Anglo American. ■ FREE STATE BUSINESS 2021 38

Oil and gas Logistics companies are signing up for gas. OVERVIEW Sector Insight Filling stations offering liquified natural gas are planned. Image: BHIT Bulk Logistics The Virginia Gas Project is making good progress. The project is owned by Tetra4 which is a Renergen company. The company has invited bids for the allocation of liquefied natural gas (LNG) and expects to start drilling in 2020. Tetra4 holds the rights for onshore petroleum production, the only such licence in the country which is issued by the Department of Mineral Resources and Energy through Petroleum Agency South Africa. Renergen intends equipping filling stations with LNG at strategic locations across South Africa to cater for the logistics industry. The first two such stations will be Total stations in Johannesburg and Durban that will be rebranded in green. One station is planned for Harrismith on the busy N3 highway which links these two cities. Bulk Hauliers International Transport (BHIT) has signed an agreement to take LNG to fuel 50 of its trucks, which should lead to lower operating and maintenance costs. South African Breweries is another client. Tetra4 has a R218-million loan from the Industrial Development Corporation to build a 107km pipeline network from Virginia and the Overseas Private Investment Corporation (OPIC), an agency of the US government, will lend Renergen -million (more than R600-million) over 12 years to build a gas plant in the Free State. The area around Virginia has proven reserves of 25-billion cubic feet. The chemical complex at Sasolburg is the economic driver of the oil and gas sector for the province. One of the Sasol companies at Online Resources Petroleum Agency SA: South African Oil and Gas Alliance: South African Petroleum Industry Association: Sasolburg, Sasol New Energy, is moving the group away from reliance on fossil fuels. In 2020 Sasol called for bidders to construct an embedded 10MW solar PV facility at Sasolburg. The company’s larger goal across all its sites is eventually to procure 600MW of renewable energy and achieve a 10% greenhousegas (GHG) emission reduction by 2030. The regulator and promoter of oil and gas exploration in South Africa, Petroleum Agency South Africa, has awarded coalbed-methane-gas exploration rights in KwaZulu- Natal and natural gas exploration permits in the Free State. Early surveys suggest that the Free State has 23-billion cubic feet of gas underground. If this is confirmed, then four new power stations could be built in the province. Tests have begun in the Karoo in search of shale gas. The Natref fuel refinery is one of only four in South Africa, and the country’s only inland refinery. The refinery is a joint venture between Sasol Oil (63.6%) and Total SA (36.3%). It is a technologically advanced facility, which refines heavy crude oil into petrol, diesel, commercial propane, jet fuel and bitumen. ■ 39 FREE STATE BUSINESS 2021

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