In a move that could help South Africa’s stagnant economy, Chinese investors signed agreements to build a $10bn metallurgical complex in the country during President Xi Jinping’s state visit there last week, reports Reuters, citing sources in the know.
At a news conference on 24 July, President Cyril Ramaphosa said China had committed investments worth $14.7bn in the South African economy, but neither he nor President Xi mentioned the metallurgy complex, which would produce stainless steel and other metals.
However, an executive involved in the project and a provincial official told Reuters that construction would start next year.
The project envisages building a stainless steel plant, a ferrochrome plant and a silicomanganese plant.
Reuters notes that Ramaphosa is determined to promote economic growth after a decade of stagnation, and is targeting $100bn in new investment over five years.
Trade and Industry Minister Rob Davies said on 24 July that China was indeed considering a metallurgical project in a special economic zone (SEZ), but did not reveal the scale of the project or timeframe.
The anonymous executive said memoranda on the complex were signed before Xi and Ramaphosa gave a news conference on 24 July.
Reuters spoke to Richard Zitha, a project executive at the Musina-Makhado SEZ, where the complex will be based, who said the project was being led by Chinese state-owned companies, but he he declined to name them.
"The investors have been in South Africa for around a week and have visited mines to look for inputs for the project," Zitha said, according to Reuters.
The Musina-Makhado SEZ is in Limpopo province close to South Africa’s borders with Mozambique, Zimbabwe and Botswana.
The SEZ plans to house plants with a capacity of 3 million tonnes per annum of stainless steel, 3 million tonnes per annum of ferrochrome and 500,000 tonnes per annum of silicomanganese. Those capacity targets are subject to change and will be finalised by the end of the year, the executive said.
Image: South African President Cyril Ramaphosa during the 2018 BRICS summit, held in Johannesburg in July (Creative Commons)