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South African Business 2022

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Welcome to the 10th edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by the website Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provinces. This issue has a focus on Special Economic Zones which are being rolled out across the country with specific economic areas of focus. The importance of the revival of minerals exploration and the significance of onshore and offshore gas discoveries is the subject of another special feature.

Special Economic Zones

Special Economic Zones Several SEZs are focussing on green energy and green technology. A key component of the strategy to boost the value of South African mineral and agricultural products is to develop infrastructure where manufacturing can take place, namely Special Economic Zones (SEZs) and industrial parks. South Africa has 12 registered SEZs and several more are in the planning or registration phase. National and provincial incentives are in place to attract investors to the SEZs, with the added benefits of existing infrastructure and access to companies relevant to an investor’s value chain. A 2021 report by the Centre for Development and Enterprise has suggested that the zones are not sufficiently special, and that experimentation with greater flexibility in terms of labour regulations would reap dividends. The CDE notes that if companies were exporting, the issue of competing with local concerns would not arise. The CDE has suggested the Coega SEZ as the site for such an experiment. Each province has been allocated SEZs that play to regional strengths. Limpopo has two SEZs, both of which aim to use the province’s rich mineral resource as a base for other economic activities. One is already attracting investors and the other is in the process of being registered. The Musina-Makhado SEZ (MMSEZ) in the far north and the Fetakgomo-Tubatse SEZ (FTSEZ) in the east are central to the strategy of expanding Limpopo’s manufacturing capacity. Building new industrial parks and reviving existing areas support the same goal. As of February 2020, Shaanxi CEI Investment Holdings had committed to a -billion investment in a vanadium and titanium smelter project at the MMSEZ and a further .1-billion had been pledged from other sources. The first-phase focus is on energy and metallurgical processes but agroprocessing, logistics and general manufacturing are expected to follow. The FTSEZ is located in the heart of the one of the most mineral-rich localities on earth, the SOUTH AFRICAN BUSINESS 2022 16

SPECIAL FEATURE • Auto-catalysts from PGMs. • Components for vehicle and trucking industry (and assembly of the same). Investors in education and skills are invited to collaborate with MERSETA, the Limpopo Economic Development Agency (LEDA) and companies in the mining sector. GRI Towers South Africa is making wind turbine towers in the Atlantis SEZ, a green technology hub. Credit: Gestamp Renewable Industries eastern limb of the Bushveld Igneous Complex which includes the Merensky reef. Dozens of mining operations are in the Sekhukhune District, all of which need mining supplies. A Mining Input Suppliers Park has been developed and a budget of R20-million has been allocated for the integration of that facility into the SEZ. The existence of the mines and the supplier park will be leveraged to create opportunities to industrialise the manufacturing of these supplies and also to beneficiate the mined product. The broader aim is to build the regional economy with strong upstream and downstream links in the mining value chain, particularly with regard to platinum group metals (PGMs). Within the Fetakgomo-Tubatse SEZ there are opportunities for investors in the manufacture of: • Vehicle components designed for green hydrogen fuel cells and electrolytes energy from PGMs. • Vehicle batteries and related components. Green focus One of the unique selling propositions of the FTSEZ is in its potential as a hub for green technology, both in terms of energy generation and in terms of manufacturing. It is being billed as a “Centre of Excellence on advanced energy technology”. Several minerals and metals mined in the area are vital components for the manufacture of items that the world needs to transition away from a fossilfuel economy to a greener, renewable future. This includes hydrogen fuel cells and battery technology. A pre-feasibility study related to battery minerals is underway at the Burgersfort Nickel Project. Another SEZ that is tackling the challenges of the green economy is the Atlantis SEZ, about 40km north of Cape Town. The focus at Atlantis is green manufacturing such as solar panels, wind turbines and battery storage. With the South African automotive manufacturing sector heavily dependent on exports, it will have to comply with tougher environmental requirements being implemented in Europe, the US and the UK. The year 2030 has been designated as the last for the petrol car in Europe. Atlantis intends to be the site for the manufacture of the components that will cater to the new market for cleaner vehicles. Two of the earliest investors at Atlantis SEZ are Kaytech, manufacturers of construction sheeting made out of recycled plastic, and GRI Towers South Africa, a subsidiary of the giant international renewable energy company, Gestamp Renewable Industries. Making industrial parks themselves greener is the focus of a programme of the National Cleaner Production Centre (NCPC) in partnership with the National Department of Trade, Industry and Competition (the dtic) and the United National Industrial Development Organisation (UNIDO). 17 SOUTH AFRICAN BUSINESS 2022

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