Kalagadi Manganese is investing R4.2 billion for the construction of a smelter plant with an annual production capacity of 320 000 tons of High Carbon Ferromanganese (HC FeMn) in the Coega IDZ, Eastern Cape. The spending related to the construction of the smelter would result in direct, indirect and induced output of R7.3 billion in the Eastern Cape.
It is expected that about 1000 jobs in the Eastern Cape Province would be required during the construction phase of the project. It is also estimated that the smelter plant will create approximately 400 permanent jobs. The share of jobs sustained by the project would be semi-skilled and unskilled jobs (28%), informal jobs (36%), skilled jobs (28%) and high-skilled jobs (8%).
This capital injection is expected to stimulate output in the construction industry due to the expenditure on building equipment. As a consequence of these expenditures and because of the indirect effects associated with them, other industries such as paper and paper products, machinery and equipment, furniture, plastic products, basic iron and steel, coking coal, business services, catering and accommodation services, security, wholesale and retail trade would also see relatively large increases in output.
The economy-wide GDP impact in Eastern Cape Province is expected to be in the region of R2.7 billion while the total economy-wide GDP impact is estimated at R2.8 billion for South Africa. This represents about 3.0 percent of Eastern Cape’s 2007 GDP.
The construction of the smelter is expected to start in the third quarter of 2011.
“Kalagadi Manganese is excited about building the smelter in the Coega Industrial Development Zone in partnership with the government of the Eastern Cape through the Coega Development Corporation and other stakeholders, and contributing to the creation of the much needed jobs in the province. We believe the investment will further contribute towards the stimulation of the secondary sector in the Eastern Cape.
We are also encouraged by the enthusiasm of all stakeholders and the superior infrastructure that is already in place to facilitate this project. Kalagadi Manganese is making a significant investment in the Coega IDZ and this also affirms the reason for the construction of the Port of Ngqura at Coega ,” said the Executive Chair of Kalagadi Manganese, Mrs Daphne Mashile-Nkosi.
The national government’s IPAP2 and New Growth Path have a focus on mining and beneficiation activities. This investment in the Coega IDZ by Kalagadi Manganese gives substance to that focus and will further stimulate efforts in the mining sector.
For the Eastern Cape Government the announcement of the construction of the Smelter plant confirms our belief in the Coega IDZ as the key strategic driver of industrialisation in the province. The investment will boost investor confidence in the Nelson Mandela Bay Municipality and the province in general. The production of Ferromanganese will be a catalyst for the development of the metals beneficiation cluster in Coega.
Manganese is a critical ingredient in metal alloy production including stainless steel and other steels and aluminium. This investment therefore will kick start the planned development of the heavy metals cluster at COEGA. The benefits for manufacturing in general and the auto sector in particular are obvious. Manganese is also a foundation for dry cell battery manufacturing, which supports our strategic focus on the green economy. All of this fits neatly within our Provincial Industrial Development Strategy.
The Eastern Cape government is pleased with the implications of the proposed investment by Kalagadi Manganese. This investment will stimulate additional investment from State Owned Enterprises in the form of increased infrastructure capacity in electricity; in improved and efficient logistics (primarily in rail and harbour) systems. In addition, we expect to see benefits accrue to the SMME sector in the form of additional work and investment opportunities in downstream and supporting activities.
Kevin Hustler, CEO of Nelson Mandela Bay Business Chamber welcomed the investment saying; “This is a welcome investment for city and the province, with benefits including job creation in the Eastern Cape province and the leveraging of the Northern rail corridor. The 7.3 Billion in the way of direct, indirect and induced output is a most positive spend. The fact that this is concentrated in the Eastern Cape is great news, and we acknowledge the great benefit to the province. We welcome especially the imminent start of construction in the third quarter of this year. The Kalagadi has recognised the enthusiasm of the Eastern Cape in facilitating investment and the superior infrastructure already in place to facilitate projects such as this, reaffirms for the Chamber and its members our belief in the capacity of the Nelson Mandela Bay region. We share government’s sentiments that this will stimulate much-needed investment in the form of increased infrastructure capacity in electricity and in improved and efficient logistics systems. Any benefits accruing to the SMME sector in the form of additional work and investment opportunities is positive. We welcome this development with respect to its socio-economic development impact on the entire province.”
Ocean Messengers representative, Rainer Schimpf indicated that he was not aware of any Environmental Impact study that had been done for the smelter and was, understandably, concerned about the environmental impact. “This, coupled with the possible illegal presence of an Oil Rig for repairs in the Nqura Harbour, demonstrates a disregard for the environment and lack of planning for future generations by the authorities in charge who continue to damage the environment for future generations.” continued Schimpf.
Editors Notes: Investment is good and welcomed. Our concern is around the timing of this announcement and the short time scale to the beginning of construction. In addition we have some unresolved issues around the present Manganese plant in the Port Elizabeth harbour – it seems to us that people are trying to run before learning how to walk.
Alan Straton
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Great developments in store I hope:)