A REGIONAL OVERVIEW OF
A REGIONAL OVERVIEW OF MPUMALANGA PROVINCE Blueberries are a popular fruit in supermarkets and farming them provides many employment opportunities. Pan African Resources has invested in a farm near Barberton as part of its community programme. The farm is managed by Primocane Capital. Credit: Primocane Capital Mining and timber are attracting large investments as provincial planners aim for diversification. A future beyond coal is being contemplated by the country’s prime producer of the mineral. By John Young National utility Eskom has put a date to the closure of several of Mpumalanga’s coal-fired power stations. Coal will remain part of the province’s economy for some time to come, but Eskom’s announcement – and the creation of a Presidential Climate Change Coordinating Commission – is a significant milestone on the path to a different future. Ten coal plants are due to be closed by 2040, with four Mpumalanga plants (Hendrina, Grootvlei, Camden and Komati) first in line. Eskom is undertaking studies to assess the potential impact on local communities of these closures. Options to get these plants producing energy again include gas, biomass and hydrogen but it is possible they might be used for something quite different. Eskom wants to be a net-zero company by 2050. Lessons on repurposing could be learnt from the case of the steel-producing facility that has become an industrial park. The Highveld Industrial Park (pictured) is now a fully-serviced 650ha rental space for warehousing and manufacturing in Emalahleni. More than 80% of South Africa’s coal is currently sourced in Mpumalanga, and it is the third-largest coal-producing region in the world. 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. However, violent uprisings in the Cabo Delgado province have caused French company Total to suspend work on its massive -billion LNG project and to evacuate all its staff. Eni is continuing operations and there is a hope that the huge resource will prove a boon to all African economies, including Mpumalanga’s, but it is clearly not going to be an easy road. MPUMALANGA BUSINESS 2021/22 8
SPECIAL FEATURE Sasol, 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’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 town of eMalahleni (Witbank) is the centre of the coal industry. Other minerals found in the province include gold, platinum-group minerals, chromite, zinc, cobalt, copper, iron and manganese. Spending for the future Emalahleni is getting new infrastructure in the form of a new tertiary hospital. The local municipality has made land available for the construction of the facility. Another development in the Nkangala District Municipality is the public-private partnership that is due to deliver a hotel and conference centre in the neighbouring Steve Tshwete Local Municipality, in the town of Middelburg. It may seem ironic that R350-million is to be spent on a Radisson-branded hotel in the time of Covid-19 but conferences and tourism will return. Middelburg is home to Columbus Stainless, South Africa’s only producer of stainless steel, and several big engineering works. It is about 130km from Pretoria and less than three hours’ drive from the Malelane Gate of the Kruger National Park. The effect of the Covid-19 epidemic is likely to be keenly felt by the hotels, lodges and game reserves of Mpumalanga. Visits to game reserves and nature reserves have shown signs of recovery 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 9 MPUMALANGA BUSINESS 2021/22
