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Mpumalanga Business 2020-21 edition

  • Text
  • Invest
  • Business
  • Investment
  • Economy
  • Africa
  • Africa
  • Exxaro
  • Sasol
  • Sappi
  • Economic
  • Programme
  • Manufacturing
  • Province
  • Provincial
  • Sector
  • African
  • Tourism
  • Municipality
  • Mpumalanga
The 2020/21 edition of Mpumalanga Business is the 11th issue of this essential publication that since its launch in 2008 has established itself as the premier business and investment guide for the province. Updated overviews of each of the key economic sectors of the province are included, with references to the latest investments by companies across multiple sectors. These include Sappi, Sasol and Sonae Arauco, which is expanding its White River factory. Afrimat is considering investment in the mining sector, while Exxaro Resources, South32 and Pan African Resources are among the mining companies spending on extending the life of existing mines. A useful article on what incentives are available to investors from various departments and agencies is provided. Mpumalanga has several investment and business opportunities in a wide range of sectors.

SPECIAL FEATURE A

SPECIAL FEATURE A regional overview of Mpumalanga By John Young New technologies and new priorities are set to reshape the economy of Mpumalanga. Coal has been the engine of the Mpumalanga economy for many years. Most of South Africa’s power comes from coal, and most of those power stations are in Mpumalanga. More than 80% of South Africa’s coal is currently sourced in Mpumalanga, with the town of eMalahleni (Witbank) being the centre of the industry. Other minerals found in the province include gold, platinum-group minerals, chromite, zinc, cobalt, copper, iron and manganese. Confronting South Africa’s reliance on coal is not something that seems to be on the agenda at the moment, with a good deal of thought and effort going into find ways to get coal to Mpumalanga’s power stations from the next big coal region, the Waterberg. A new railway line is mooted. The lives of a number of Mpumalanga coal mines are being extended and Sasol launched the third of its replacement mines in 2019. The most popular renewable energy technologies, wind and solar, have little purchase in Mpumalanga but a game-changer could come to the provincial economy in the form of gas. This would allow the province to retain its position as an energy provider and to start moving away from coal. Vast new fields of natural gas have been found off the coast of Mozambique and the large and sophisticated infrastructure that Sasol has built up over the years make it well-placed to fire up a gas-based economy. Sasol (pictured above), an integrated oil, gas and chemicals company with more than 30 000 employees and operations in 31 countries, runs several plants at Secunda. Products manufactured at the complex include synthetic fuel, petroleum, paraffin, jet fuel, creosote, bitumen, diesel and lubricants. The primary feedstock for synthetic-fuel production is coal, and the plant is in the heart of MPUMALANGA BUSINESS 2020/21 6

SPECIAL FEATURE Mpumalanga’s coalfields. Sasol regularly spends tens of millions on upgrades and improvements at the Secunda complex. The Sasol Synfuels refinery is the only commercial coal-to-liquid fuel plant in the world and constitutes a key component in South Africa’s oil and gas sector. On a smaller scale, the provincial government is looking beyond coal towards a renewable energy future, especially where projects can be tackled by small businesses. There might be opportunities in micro-hydro or rooftop solar projects that will help to reduce dependence on the national grid while simultaneously promoting SMMEs. The other big new reality that Mpumalanga has to face is the fact that travel and tourism will not be a priority for people around the world any time soon. The effect of the Covid-19 epidemic is likely to be keenly felt by the hotels, lodges and game reserves of Mpumalanga. It is possible that visits to game reserves and nature reserves will be allowed (even encouraged perhaps) sooner than other sectors of the tourism sector because of the big distances between cars and people that can be achieved. But the turnover from restaurants will be absent for some considerable time and in a province where 7% of GDP is derived from tourism, this is bad news. In 2018, tourists spent R13.1-billion in the province. Numbers were rising for both international tourist arrivals and domestic tourists as a result of a strong marketing campaign by the Mpumalanga Tourism and Parks Agency (MTPA). The Kruger National Park remains the province’s most visited asset but the decision by UNESCO to afford World Heritage Site status to the Makhonjwa Mountains near Barberton will boost geological tourism to the province and supports the efforts of the province to diversify its offering. Major projects to improve tourist experiences are underway at the Graskop Gorge (where a transparent lift takes tourists into the depths of the gorge), a skywalk is to be built at God’s Window and a cable car is planned for Three Rondavels. The international body’s decision has also had the effect of expanding the curriculum at the relatively new University of Mpumalanga. On the basis of the UNESCO ruling, UMP is offering geology as part of a BSc degree, to supplement existing courses in education, agriculture and hospitality. Several infrastructure investment projects in the tourism sector have been put forward by the Mpumalanga Economic Growth Agency (MEGA). There is a special focus on BRICS countries and provincial authorities are investigating a tourism airlift route between Moscow and Mpumalanga. The TRILAND partnership with Eswatini and Mozambique is another avenue, as is the collaboration with KwaZulu-Natal, Eswatini, Mozambique and the Seychelles. The latter project is called east3ROUTE Tourism Initiative and proclaims “Experience, Adventure, Scenery and Trade” between the participating provinces and countries. A major concern for provincial planners is to diversify the economy and to grow the manufacturing sector. The Mpumalanga Economic Growth and Development Path (MEGDP) identifies beneficiation, agri-processing and the development of value chains as priorities. Various industrial parks are planned which will focus on agriculture and forestry, mining and metals and petrochemicals. An International Fresh Produce Market in Nelspruit and the planned Nkomazi Special Economic Zone (SEZ) are other priorities. Steel and associated manufacturing remains one of the province’s strong suits and Mpumalanga has rich and varied mineral resources and fertile soil that support diverse farming operations, agriprocessing and forestry. The province also hosts large companies in the manufacturing sector. Columbus Stainless in Middelburg is a major producer of stainless steel, while Middelburg Ferrochrome, Thos Begbie and the Nelspruit-based Manganese Metal Company are among other important heavy industrial companies. The province’s rich agricultural produce is used by companies such as McCain, Nestlé and PepsiCo and there are also pulp and paper plants (Sappi and Mondi), fertiliser facilities and textile manufacturing concerns. The decision by Sappi to start producing dissolving wood pulp at its Ngodwana Mill has significantly increased the manufacturing capacity of the province. York Timbers is a leading forestry company and the sugar mills and refinery of RCL Foods (formerly TSB Sugar) are large contributors to the provincial economy. 7 MPUMALANGA BUSINESS 2020/21

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