OVERVIEW Forestry and
OVERVIEW Forestry and paper Forestry’s green credentials are excellent. Eucalyptus is an excellent carbon sink. One cubic metre of eucalyptus wood removes around 880kg of CO2 from the air, storing around 240kg of carbon. This is according to Forestry South Africa (FSA), the industry body that claims to represent 93% of the forestry industry. This includes all 13 corporate companies, hundreds of medium-scale forestry farmers and thousands of small-scale growers. In the face of growing concern about the climate crisis, bodies such as FSA and the Paper Manufacturers Association of South Africa (PAMSA) have been active in promoting the green credentials of the forestry and paper sectors. About 30% of Mpumalanga’s plantations are planted to eucalyptus, with pine representing about 50%. The province has a higher proportion of its land given over to plantations (6.4%) than any other province, even KwaZulu-Natal (5%). The province’s 491 000ha of plantation area represents 41% of the national total. FSA reports that more than 85% of this is certified as meeting the stringent environmental and social standards set by the Forest Stewardship Council® (FSC®). In addition, 40% of these plantations have international PEFC certification through the recently established Sustainable African Forest Assurance Scheme (SAFAS). Of the 254 000ha owned or leased by Mondi for plantation forestry in KwaZulu-Natal and Mpumalanga provinces, approximately 27% are unplanted, with about 80% of these unplanted areas set aside for conservation purposes. This is mostly grassland and wetland ecosystems. Mpumalanga has the ideal climate and topography for forests. Sabie and Graskop represent the hub of the industry, but ONLINE RESOURCES Forestry South Africa: www.forestry.co.za Paper Manufacturers Association of South Africa: www.thepaperstory.co.za Sawmilling South Africa: www.timber.co.za SECTOR INSIGHT A new sustainability body has been established. commercial forests are also found to the east and south along the Swaziland border. Forestry accounts for about 8% of Mpumalanga’s gross domestic product. The sector comprises logging, saw-milling, wood product and pulp and paper manufacture. Pulp and paper are the main exports, along with sawn lumber, wood chips and wattle extract. Most sawn timber in South Africa is used in the construction sector. One of the biggest operations in the forestry and paper sector in Mpumalanga is Sappi’s Ngodwana Mill. Although it has a big international footprint, Sappi’s biggest sales volumes are achieved in South Africa, making up nearly 50% of group sales. Sappi’s other large facility in the province, the Lomati Sawmill in Barberton, produces kiln-dried Southern African pine lumber from sawlogs supplied by Sappi Forests. The Industrial Development Corporation (IDC) has a stake in Hans Merensky Holdings and York Timbers, which has planted out 40ha in high-value crops as part of a diversification strategy. PG Bison, a subsidiary of KAP Industrial Holdings, is investing R560-million in a new front-end dryer for its particleboard plant in Mkhondo. The company is also building a new medium-density fibreboard (MDF) plant. ■ MPUMALANGA BUSINESS 2024/25 32 PHOTO: Mondi Group
Oil and gas New sources for LNG imports are needed. OVERVIEW The announcement by Sasol that it will cut supplies of natural gas from Mozambique in 2026 has caused considerable discussion among users of the energy source, including the Industrial Gas Users Association – Southern Africa (IGUA-SA), which said that this would have a significant impact on the manufacturing sector. IGUA-SA’s website notes that natural gas could bolster socioeconomic growth, attract investment and render “the mining, energy and manufacturing sectors more efficient and globally competitive”. The association has members in the mining, manufacturing, agricultural and transport sectors. Sasol, an international chemical and energy company, has several large plants in Mpumalanga and it has been the dominant national player in these sectors for decades. With more than 30 000 employees and a presence in 30 countries, the decisions Sasol make have a big impact on society. A series of partnerships entered into by Sasol illustrate that the company has decided that the energy future has to be different to the present. Subsidiary company Sasol ecoFT is producing sustainable fuels and chemicals from green hydrogen and sustainable carbon sources via the Power-to-Liquids process and using the Fischer-Tropsch technology (FT) which has helped set the company apart in its field. Products manufactured at the Sasol complex in Secunda 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. The Department of Mineral Resources and Energy (DMRE) has published a draft Gas Master Plan which it says, “considers the complete gas topology ranging from demand, supply, importation, infrastructure, and distribution networks”. The DMRE is also engaged with the question of the Sasol decision and is working with the private sector to explore alternatives. One of the alternative sources being explored is a Mozambican state-owned hydrocarbon company with which DMRE agencies are negotiating to buy natural gas. iGas, a gas development company that is a subsidiary of the state-owned Central Energy Fund, now jointly owns 80% of ONLINE RESOURCES Independent Power Producer Programme: www.ipp-projects.co.za Industrial Gas Users Association – Southern Africa: www.igua-sa.org Petroleum Agency South Africa: www.petroleumagencysa.com Sasol: www.sasol.com SECTOR INSIGHT A Central Energy Fund subsidiary has acquired 40% of the Rompco pipeline. the Republic of Mozambique Pipeline Company (Rompco) with CMG, the Mozambique state gas company, after buying an additional 40% from Sasol. Sasol, the third partner in the company, continues to operate the pipeline. The Liquefied Natural Gas Independent Power Producer Procurement Programme (LNG IPPPP) is part of the broader programme of the National Department of Mineral Resources and Energy which encourages private investment in renewable energy, namely the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The total allocated to gas-to-power in the national power plan is 3 726MW, of which 3 000MW is for LNG. ■ PHOTO: APO Group 33 MPUMALANGA BUSINESS 2024/25
