Mining & Minerals
Mining and quarrying is a dominant sector in the Limpopo Province, contributing 24.1% to the provincial GDP in 2015.
The mining sector is diverse and rich in the following key minerals: Platinum Group Metals, coal, diamond, chrome, titanium, vanadium and iron-ore. Antimony, a highly strategic mineral found in large quantities in China, is another of Limpopo’s major assets.
Limpopo Province is home to three coal hotspots of the Republic of South Africa, the Waterberg Coal basin in Lephalale, Soutpansberg Coal basin in Vhembe and the Springbok Flats Coal basin across Capricorn and Waterberg Districts. Limpopo is home to both thermal and coking coal.
Beneficiation around Limpopo’s mineral wealth presents an opportunity for the following key Platinum Group Metals, coal, diamond, chrome and iron-ore. The Province is currently investigating possibilities for steel manufacturing in the Phalaborwa area and various smelters around the beneficiation of iron-ore to augment the existing smelters for
Key Mineral Opportunities
Auto catalyst production and diesel particulate filters in both the short term (less than five years) and medium term (five to ten years).
- Mass production of platinum jewellery banks leading up to mass market finished jewellery for export.
- Specialist catalysts.
Chromium and Ferrochrome
Entry into this major part of the chromium/stainless steel industry requires extensive financial resources. To achieve the requisite economies of scale the ferrochrome smelters must be equipped with large furnaces necessitating a high capital outlay.
Recent advances in the ferrochrome industry have seen significant improvements in process design with a saving in operating costs (for example Outotec’s preheater offers considerable electrical energy savings).
Iron, Vanadium and Titanium Value chain
None of these commodities play an important role at present in the Limpopo Province, but their potential is large. Iron ore is mined in Thabazimbi (Waterberg District) and railed south for further processing.
The almost entirely untapped resources in Limpopo are mostly in the form of titaniferous magnetite that often contains payable levels of vanadium. This combination of the three metals forms the rationale for them being combined in a single section. The resource is said to be huge and is scattered over a wide area. For one mining operation, it is not unrealistic to anticipate the simultaneous production of two and possibly even three of the metals.
The following opportunities are seen as distinct possibilities:
- Production of pig iron from low vanadium titaniferous ore with high titanium content
- Production of pig iron and vanadium slag
Agriculture & Processing
Agriculture is the backbone for the development of the food and beverages manufacturing sub-sector in any economy. The Agricultural Sector plays an integral part in the Limpopo economy. The sector produces raw materials for local consumption and export markets. Based on the number of agricultural activities currently taking place in and around the Limpopo Province it is certain that several opportunities do exist. The raw materials could be beneficiated to add value to the produce and to increase the profits made on produce.
Limpopo is known as the fruit basket of South Africa with climatic conditions providing for a variety of fruits and vegetables. The Limpopo agricultural sector contributed approximately 7.3% to the GDP for 2013. Agriculture is pivotal in the economic and social development of the Province as far as employment, food production and export is concerned.
The sector contributed 2.1% towards the provincial GDP at current prices for 2015.
Although its contribution is minimal, the opportunities for agro-processing are vast given the availability of large volumes of product namely:
- 66% of South Africa’s mangos
- 65% of its pawpaws
- 36% of its tea
- 19% to 29% of its litchis and bananas
- 61% of its avocados
- 75% of its tomatoes, 300 000 tons of potatoes
- 42% of its citrus and 53% of its Grapefruit
More than 45% of the R2 billion annual turnover of the Johannesburg Fresh Produce Market comes from Limpopo. Both the Mopani DM and Waterberg DM have a comparative advantage in agricultural production.
Limpopo’s competitive advantage as a tourism destination is based on its natural, culture and heritage resource base which reflect the following:
- 1 million hectares in Limpopo is dedicated to game farms and provincial nature reserves (48) that offer various consumptive and non-consumptive tourism opportunities.
- The Kruger National Park, South Africa’s prime ecotourism destination adds an additional 1,9 million to this natural experience.
- There are three national parks in Limpopo, these include the Kruger National Park, Marakele National Park and Mapungubwe National Park (also part of the Mapungubwe World Heritage site).
- Limpopo is also home to two registered UNESCO Biosphere reserves, namely the Kruger to Canyons Biosphere Reserve and Vhembe Biosphere Reserve.
- Two sites in Limpopo Province have world heritage status, namely Mapungubwe and Makapan’s Valley.
- Limpopo is further part of two trans-frontier conservation areas namely the Greater Limpopo Trans-frontier conservation area and the Mapungubwe trans-frontier conservation area.
- Limpopo also has two Ramsar sites, 28 registered natural heritage sites and still many un-proclaimed cultural and natural areas.
- Limpopo is further home to three national centres of endemism, namely the Soutpansberg centre, Wolkberg centre and the Sekhukhune Centre.
- Limpopo is positioned as a preferred ecotourism destination with its large formal and informal protected area network bestowing unique experiences.
The Limpopo Tourism competitive advantage in terms provincial tourism growth strategy is centred on the following key tourism clusters:
- Family and Recreation Cluster
- Special Interest
- Golf and Game Cluster
- Mega-Conservation Cluster
- Safari and Game Industry Cluster
- Meetings Incentives Conferencing and Events (MICE)
Opportunities in the Renewable Energy market for South Africa have a positive outlook. The South African government has already included Renewable Energy in the Integrated Resource Plan 2019. This plan highlights Renewable Energy sources as a great complement to energy power in South Africa’s coal power.
MINISTER for Natural Resources and Energy Gwede Mantashe in mid-August 2021, gazetted the amendments to Schedule 2 of the Electricity Act, lifting the generation threshold for private companies to generate up to 100 megawatts (MW) of electricity for their own use and sell excess energy to the grid, leaving the door open for the National Energy Regulator of South Africa (NERSA) to consider applications.
Limpopo has great potential for renewable energy and alternate energy projects in the field of bio-energy, solar energy as well as medium scale nuclear energy plants.
In 2014, the South African government announced the introduction of biofuel blending mandates of 2–10% for bioethanol and 5% for biodiesel. The current supply of biofuels is far below the required blending requirements and therefore the market for biofuels is enormous. Limpopo prides itself as a leading agricultural producer in the region and as such has the potential to grow a wide variety of feedstock for bio fuels. Examples include sugar cane, sweet sorghum, soy bean, jetropha, moringa, and not limited to the mentioned.
The climatic conditions in Limpopo favour the development of solar energy production with very limited interruptions to solar absorption. Currently the domestic market for solar is very big indeed with less than 2% of Limpopo’s roofs fitted with solar panels. The applications for solar plants range from small domestic through to large scale supply to the grid. Larger projects will also benefit from the recent legislation, paving the way for projects generating up to 100MW energy.
Industrial Infrastructure and Technology
Limpopo Province’s industrial parks are host to enterprises in the manufacturing and services sectors across the five districts of the Province. In line with promoting more investment in these industrial parks, the agency is collaborating with the Department of Trade, Industry and Competition to refurbish the current fleet of industrial parks in the Province subsequently increasing lettable space for rentals which, consequently, expand manufacturing capacity in the Province. The development is in line with Limpopo’s Industrialisation agenda, with Phase 1 of the revitalisation in both Seshego and Nkowankowa complete. This includes security features to the entire industrial area and plans are afoot to commence with phase 2 implementation. The upgraded infrastructure will greatly benefit manufacturers seeking immediate start-ups.
Broadband and Science and Technology Park
Limpopo Connexion, LEDA’s subsidiary company is rolling out broadband in the Province to support the socio-economic development imperatives set out by the National Development Plan and Limpopo Development Plan. The stimulation of economic development is embedded in cost-effective communication technologies that are available, accessible, reliable and affordable. The Broadband Act calls for equal access to internet connectivity. With good broadband infrastructure the costs of doing business are reduced, because of that the country is transformed towards a knowledge economy, thereupon realising the benefits of the fourth industrial revolution (4IR).
Forty-four (44) sites have been connected to the network, offering free Wi-Fi services to students at Library Gardens and to the broader community at the Polokwane Civic Centre.
The second flagship Programme embraced by Limpopo Connexion, shareholders and key stakeholders is the Science and Technology Park (STP), promising to unlock Limpopo’s potential as amongst, the regions of the world to establish a World Class Information Technology Science Centre. To date, a site for establishment has been approved; the environmental impact studies completed & signed off, the draft commercial model, business plan and artistic impression also completed. This ultimate mega project will culminate into an industrial ecosystem, immensely contributing to the socio-economic development of Limpopo Province in the long term.
Special Economic Zones
Revitalising the Limpopo economy through industrialisation
The Economic Reconstruction and Recovery Plan outlines immediate actions to rebuild the national economy and to provide jobs and relief to the South African people. These actions include an aggressive infrastructure programme, far-reaching reforms to increase our competitiveness and inclusiveness, measures to catalyse industrialisation, relief for vulnerable households and individuals, and a public investment in employment programmes. This plan is a response to a severe economic contraction unlike any we have experienced in recent memory. South Africa is not alone in experiencing an economic crisis of this depth and extent. Unemployment has risen across the world and nearly every economy has shrunk. As President Cyril Ramaphosa has noted, “It is true that the measures that were necessary to delay the spread of the virus and prevent deaths led to a sharp decline in economic activity.” The strategic geographic location of the Musina‐Makhado SEZ and its close proximity to the main land‐based route into SADC and the African continent, together with supporting incentives and a good logistics backbone, will make it the location of choice for investment in mineral beneficiation, agro‐processing industries, manufacturing and logistics. This will provide job opportunities to the people of Limpopo Province currently in need of jobs and skills development. The establishment of the metallurgical cluster in close proximity to the source of raw materials, along with a logistics hub in the SEZ with access to markets, presents unique opportunities for mineral beneficiation, which is a key priority of national government.
Genesis of the MMSEZ
Following the enactment of the Special Economic Zones Act, the Limpopo provincial government submitted a comprehensive proposal on strategic areas for consideration to develop the Province’s economy through industrialisation to the Department of Trade, Industry and Competition (dtic). The dtic designated the Musina-Makhado Special Economic Zone (MMSEZ), which has become the flagship of the provincial government. Subsequently, the Musina-Makhado State Owned Company (SOC), a subsidiary of the Limpopo Economic Development Agency was established. This entity is tasked with the responsibility of facilitating and managing the planning and development of the MMSEZ.
MMSEZ business case
The essence behind the creation of the MMSEZ is the establishment of a new industrial hub in the Vhembe District Municipality, which forms part of the Trans‐Limpopo Spatial Development Initiative, situated at two locations, Makhado and Musina, each with its own unique industrial focus. The energy and metallurgical cluster (power plant, The game-changer: Musina-Makhado Special Economic Zone FOCUS Revitalising the Limpopo economy through industrialisation. SOUTH AFRICAN BUSINESS 2021 24 steel plant, stainless steel plant, coking plant, pig iron plant, ferromanganese plant, ferrochrome plant, chrome plating, lime plant, ferromanganese, silicon-manganese and calcium carbide plants and vanadium-titanium magnetite plant) is located on the Makhado side and the Northern Site in Musina is focussing on general manufacturing, agro-processing and logistics
The MMSEZ SOC has another critical responsibility of attracting and mobilising both domestic and foreign direct investment in the identified industrial activities across the value chain. The beauty of the MMSEZ lies in the diversity of opportunities across sectors both at the downstream and upstream with backward and forward linkages. The North-South Corridor makes the Musina-Makhado location a strategic passage for trade between South Africa and the rest of the SADC region and the African continent, further given impetus by the Africa Continental Free Trade Agreement. Limpopo Province has always enjoyed a niche of being a gateway to the rest of Africa as a home to one of the busiest ports of entry, Beit Bridge Border Post. The development of the MMSEZ becomes an ideal platform to cement this strategic socio-economic position of the Province.
Vhembe Region is the food basket of Limpopo Province as it is endowed with various agricultural resources. some of which are sought after in lucrative world markets. Exotic fruits and vegetables are available in abundance, which creates a viable potential for agro-processing of value-added products for domestic consumption and export markets. Food production has over the years become a multi-billion industry that requires the creativity of entrepreneurs to exploit. Complemented by logistics support, the agroprocessing cluster of the MMSEZ is destined to become a big success over the next few years. Various opportunities exist within the agro-processing cluster such as food processing, fresh-produce handling, dry-fruits packaging, food canning, timber processing, furniture manufacturing, etc.
Manufacturing within the automotive sector
South Africa has established itself as the powerhouse of the automotive industry in Sub-Saharan Africa. Over 10% of the vehicles manufactured in South Africa are supplied by road via the Beit Bridge Border post to markets to the north of South Africa in the SADC region. This window of opportunity makes the MMSEZ an ideal location for various opportunities across the automotive sector value chain such as vehicles and components manufacturing, storage and distribution hub, after-care products distribution hub, tyre manufacturing and distribution hub, etc. The manufacturing cluster of the MMSEZ will provide a platform for various Original Equipment Manufacturers to manufacture products in the SEZ for both domestic consumption and export markets in Africa and beyond. A strategic opportunity exists for manufacturers of products such as fertilisers, agro-chemicals, industrial chemicals, steel fabrication, etc.
The South African Constitution enjoins us to pursue economic development in a sustainable manner and preserve the environment for the benefit of current and future generations. Section 24 states that everyone has the right to an environment that is not harmful to their health or well‐being and to have the environment protected for the benefit of present and future generations, through reasonable legislative and other measures, that prevents pollution and ecological degradation, promotes conservation and secures ecologically sustainable development and the use of natural resources while promoting justifiable economic and social development. This constitutional provision is supported by the National Environmental Act (NEMA) which provides that negative impacts on the environment and on people’s environmental rights must be anticipated and prevented, and where they cannot be altogether prevented, are minimised and remedied. Our country aspires to be a sustainable, economically prosperous and self‐reliant nation state that safeguards its democracy by meeting the fundamental human needs of its people, managing its limited ecological resources responsibly for current and future generations, and by advancing efficient and effective integrated planning and governance through national, regional and global collaboration. Our application for the environmental impact assessment (EIA) was guided by the above fundamental values, principles, directives and the entity’s environmental, social and governance (ESG) policy provisions. We recognise that sustainable development and sustainable use and exploitation of natural resources are at the core of the protection of the environment. The months of September and October 2020 were dedicated to a public consultation process for the EIA application for the South site, energy and metallurgical cluster. The outcome of the EIA process indicated that the benefits of the MMSEZ will potentially promote justifiable economic and social development although a negative impact upon the environment will become inevitable. The ultimate goal of the EIA process is to protect ecologically sensitive areas and support sustainable development and the use of natural resources, whilst promoting justifiable socio-economic development in the location of the project. In our endeavour to ensure the effective implementation of the mitigation and management actions, an environmental management plan has been developed to provide mitigation measures necessary to ensure that the project is planned, constructed, operated, and decommissioned in an environmentally responsible manner. The Draft EIA Report identified and assessed all the potential impacts of the project as well as the proposed mitigation measures and management actions. Various specialist studies have been conducted beyond the approved EIA scoping report which included the aquatic impact assessment, ecological impact assessment, heritage impact assessment, palaeontology / archaeology impact assessment, soil and land capability assessment, visual impact assessment, climate change assessment, air quality assessment, socio-economic assessment, noise impact assessment, health impact assessment, traffic impact assessment, water assessment, high-level energy study, economic analysis, biodiversity study, biodiversity offset study, biodiversity offset strategy, waste impact assessment, town-planning, impact assessment, tourism and food security study, security of water study, energy requirement study and energy generation technology options.
Integrating SMMEs within the SEZ
Special Economic Zones are predisposed to attract foreign direct investment which could translate into blue-chip international enterprises locating in the zone. Although it is a good thing to attract international companies to locate in the SEZ, this should not happen at the expense of local enterprises. Skills and technology transfer forms an integral part of the essence of the SEZ phenomena. In the MMSEZ, SMME promotion and integration is inherent to the business model. An instrument has been developed in the form of an Enterprise Development Strategy to mainstream SMMEs development into the life cycle of the MMSEZ. The strategy is supported by an ambitious programme to develop an SMME Incubation Centre as a platform for entrepreneurship excellence, creativity and skills and technology localisation. The MMSEZ is partnering with the Department of Small Business Development to roll out this magnificent initiative. During the month of October 2020, a Memorandum of Agreement was concluded with the Council for Scientific and Industrial Research (CSIR) to collaborate on supporting SMMEs in the MMESZ and ensuring technology localisation through various initiatives across sectors
Developing small towns into cities
The MEC for Limpopo Economic Development Environment and Tourism, Mr Thabo Mokone, stated on the occasion of the launch of the MMSEZ Corporate Identity, “We are pleased that finally the Province has established a capable and agile entity seized with a mandate to implement the MMSEZ. Our ambition is not just to build an industrial park but rather to use the SEZ as a catalyst to unlock a plethora of other economic opportunities, including the potential of realising a new Smart City in our Province.” It is our anticipation that the MMSEZ as a mega-industrial project will transform the spatial configuration of the two towns of Musina and Makhado. According to the external masterplan report, the two towns requires an investment of R133-billion in socioeconomic infrastructure such as roads, rail, human settlement, schools, health facilities, ICT infrastructure, airport, electricity, water and sewerage. Catalytic projects such as the envisaged High-Speed Rail Project connecting Johannesburg and Musina will add the much-desired impetus of engendering the creation of a new smart city. The Province is currently developing a model for a new smart city based on the principles of smart economy, smart mobility, smart housing, smart environment, smart governance, artificial intelligence and the internet-of-things. With the creation of opportunities for local people to earn a decent income, entrepreneurs to create wealth and investment in socio-economic infrastructure, such conditions will lay a solid base for the new smart city to take shape.
Investment opportunities outside the zone
SEZ projects are by their nature catalytic. They stimulate growth and development which is felt outside the delimited geographic space. In Musina and Makhado towns various stimulus packages have been identified as investment opportunities for the private sector outside the confinement of the SEZ spaces. Among such opportunities are the new Musina Dam, High Speed Rail Project, Manaledzi Mega Housing Project in Makhado, Musina Airport, MMSEZ human settlement, private hospital, private schools and training centres, retail property and hotels.
FETAKGOMO TUBATSE SPECIAL ECONOMIC ZONE
“Tubatse SEZ – Getting Platinum Moving- A World Centre of Excellence for advanced energy technology”
Value proposition for the Fetakgomo Tubatse SEZ
Tubatse SEZ seeks to convince investors that the environment offered is stable, predictable, efficient and cost effective. The establishment of the SEZ is driven by the projected mining and beneficiation outlook for the Platinum Group of Metals (PGMs) in South Africa. The Fetakgomo‐Tubatse area lies within the eastern limb of the Bushveld Igneous Complex (BIC), which contains the world’s largest deposits of PGMs, along with vast quantities of iron ore, chromium, titanium and vanadium.
The Tubatse PGMs SEZ for the PGM industry will be a globally recognised Centre of Excellence for the beneficiation of PGM materials into selected industrial product for the global, regional and domestic markets.
The Tubatse SEZ will, by 2022, have concluded value chain investments in Fuel Cells, Auto Catalysts and Turbine Blades; have developed and begun implementation of the Tubatse SEZ into a centre of excellence for PGMs Beneficiation in the three targeted value chains and will have developed into a sustainable ongoing business focused industrial area that will attract all associated industries and light industrial and service providers to the SEZ by 2030.
The timing for the preparation of the Fetakgomo Tubatse SEZ is excellent and the positioning of the SEZ as a unique opportunity, that is, as an efficient, friendly and effective investment destination not only for PMGS, but for renewable energy and technology.
This positions the SEZ far more competitively as a world Centre of Excellence for advanced energy technology, including alternative and renewable energy as well as PGMs based fuel cells, and in turn this could ensure that the focus is higher value added than that of simple PGMs beneficiation and significantly widen the pool of possible investors.
It is worth noting that global multinational companies like Heraeus have shown their support and confidence in the local industry by investing R300 million in the upgrade of the smelter at Northam, and additionally have entered into a 20-year supply offtake agreement. Similarly Mercedes Benz and BMW have announced big expansion programmes at their plants in East London and Rosslyn, and Ford in their Pretoria Plant. The work undertaken by private and public sector in South Africa on the hydrogen economy, as well as the strong focus on renewable, alternative and advanced energy solutions, augur well for a solid platform for development of the SEZ in terms of selected energy applications.
Fetakgomo Tubatse SEZ
|Iron ore||Steel & iron furnace||Iron pellets and steel|
|Vanadium cluster||Vanadium pentoxide plant||Vanadium pentoxide and redox batteries|
|Chrome cluster||Ferrochrome furnace & chemical plant||Ferrochrome and chrome chemicals|
|Mining input cluster||Manufacturing & services plants||Yellow metal assembly, maintenance, pumps, valves and others|
|Renewable energy & manufacturing||Manufacturing of components for solar panels||Solar panels energy|
|Platinum cluster||Platinum smelter & base metal refinery||Refined platinum,fuel cells & catalytic converters etc.|
Fetakgomo Tubatse Special Economic Zone – Investment Opportunities
Energy cluster. The Fetakgomo-Tubatse Municipality, which has abundance of platinum reserves, is well placed to produce and package battery storage cells, nuclear energy cells, and production of solar energy components. Plans to conduct feasibility studies are underway to attract potential industrial players. The feasibility study report will reflect on the following areas; profitability, sustainability and due diligence.
Pharmaceutical cluster. The increased interest of beneficiating natural resources from primary production to finished goods in the secondary industries is at the heart of Limpopo Province agro-processing strategies. Natural plants carrying medicinal properties are increasingly becoming the source of life in both emerging and first world countries. Fetakgomo-Tubatse has soil and climate conditions suitable for Lengana and Moringa plants which are among plants of interest for health practitioners and
Pharmaceutical companies producing natural medicines.
Vanadium cluster. Proposals for feasibility studies are already approved by Limpopo Economic development Agency (LEDA) for processing of vanadium, to produce battery storage. This is part of the energy sector, although it is classified as vanadium to eliminate miscommunication in investment promotion. The huge growing market for electric vehicles globally requires that investments in the battery storage derived from vanadium be increased, in-order to meet global demands.
Limpopo’s industrialisation is being addressesd through a multi-pronged approach; the upgrading of the Industrial Parks, the development of Science and Technology Park, the implementation of broadband infrastructure as well as the development of the Musina Makhado SEZ and finally the development of the Thubatse Fetakgomo SEZ. These initiatives will set Limpopo in the international arena, attracting select manufacturers and industrialists with the vision of leap-frogging Limpopo’s industrial agenda, thereby transforming the economy to be a formidable player in both the domestic, regional and global markets.