Page 42 - IDC

6 CITY PRESS, 12 MARCH, 2017

business

A
PROJECT IN

PARTNERSHIP

WITH THE
IDC Northern Cape

in numbers

1/3

THE SIZE OF

THE LAND AREA
TAKEN UP BY
UNDERGROUND PRIZE Kalagadi Manganese sits on a vast reserve of manganese deposit THE PROVINCE, THE
A province of vast 1.1m
LARGEST IN SA

opportunity PEOPLE LIVING IN
THE NUMBER OF

THE PROVINCE,

MAKING IT THE
To many people, the Northern Cape is just a place we drive through on our way LEAST POPULATED

to the country’s beaches. But did you know that our largest province, and the PROVINCE IN SA

least populated, produces 80% of the country’s raisins, and has the largest 2.1%

mineral resources and reserve base of manganese in the world?

The Industrial Development Corporation’s Mehmood Ahmed explains THE NORTHERN CAPE’s
CONTRIBUTION TO

he Northern Cape takes up nearly a third of Diversifying the province’s investments and placing emphasis on employ a lot of people, so, to offset the limited job opportunities, THE COUNTRY’s GDP
South Africa’s land area. the renewable sector has helped to mitigate the negative effect of the IDC invested up to 20% in community trusts on behalf of the
It may make the smallest contribution to the the global economic downturn and slump in commodity prices, surrounding communities. Once these projects start generating
country’s economy and have the lowest population which would otherwise have crippled the province’s economy. income, the dividends will benefit these communities.
density, but, within these numbers, the Industrial The IDC assists companies in distress to enable them to retain Another important achievement stemming from our involvement
TDevelopment Corporation (IDC) still sees jobs and maintain productive capacity in the economy. in this programme is that we have successfully started to diversify R21.5bn
tremendous opportunity in this province. We have seen a similar effect during the recent drought in the the Northern Cape’s economy away from its strong mining bias.
farming industry. Other than the normal distressed funding offered
A wealth of opportunities by the IDC, we also availed drought relief either directly or through Benefits for entrepreneurs THE IDC’s FUNDING
The Northern Cape, with its stark beauty, natural resources and the Land and Agricultural Development Bank of SA to producers. The Northern Cape as an underdeveloped province offers many
the mighty Orange River, offers many unique opportunities, such opportunities for entrepreneurs who are willing to identify and FOR PROJECTS OVER
as adventure and activity-based tourism that beckons to be Renewable energy is the way to go develop these prospective businesses.
developed. The province has several national parks, of which the The nature of the IDC’s involvement in the province is through These opportunities are more pronounced downstream of the THE PAST FIVE YEARS
Kgalagadi Transfrontier Park is the second largest in the country. large-scale projects that have a major effect. This is evident in the agriculture, mining and renewable energy value chains.
The game viewing and trophy hunting industries are funding approvals of R21.5 billion in the past five years, resulting in
experiencing marked growth and create more than 9 000 jobs in close to 8 000 jobs being created during this period. Diversifying the Northern Cape economy
the province. These approvals were largely in the renewable We are proactively pursuing opportunities through 8 000
In line with the region’s economic activity, 34% of our current energy industry, followed by mining and metals, the establishment of the Intergovernmental
portfolio is dedicated to the mining sector. We have many mines in as well as agroprocessing and tourism. Agriculture Technical Forum to develop 1 500
this province, which we can leverage to strengthen and localise the The IDC has also been one of the largest hectares of community-owned agricultural land. DIRECT JOBS
mining supplier industry. funders of government’s Renewable Energy Development finance institutions such as the
Johannesburg started out as mining town and is now one of the Independent Power Producer Procurement IDC can be key players in this initiative. CREATED IN THE PAST
biggest business hubs on the continent. There is no reason our Programme. The envisaged Kathu Industrial Park, a joint
province cannot emulate that. Of the R14.2 billion we have committed to development with Anglo American, seeks to FIVE YEARS THANKS
We are excited about the future prospects for the Gamsberg zinc this transformative programme, R11.4 billion localise supplier development to the mining
mine, which is being developed in conjunction with Vedanta near has been directed towards projects in the industry. It aims to act as a catalyst to promote TO IDC FUNDING
Aggeneys. This resource is said to be one of the world’s largest Northern Cape. a diversified local economy beyond the life of a
undeveloped zinc deposits, and therefore holds tremendous The renewable energy programme has already mine.
potential for long-term operations and job creation. received recognition far and wide as one of the
Within the agricultural sector, which constitutes slightly more country’s most successful public-private partnership Empowerment initiatives
than 9% of our portfolio, we are focused on increasing programmes dedicated to building much-needed Mehmood Ahmed One of our key overriding considerations in 15
agroprocessing capacity. infrastructure. supporting industrial and economic development
This is being driven by projects such as the Namakwa irrigation The Northern Cape proudly takes centre stage as one of the in South Africa has been to grow the number of black, female and
scheme, and the replacement of ageing vineyards and aquaculture. prime drivers of this success. youth entrepreneurs. RENEWABLE ENERGY
This ties in with Agri-parks initiatives across various districts in the Some of the IDC-funded projects include the Abengoa Khi Solar The corporation’s role in the development of these
province that aim to promote processing and transformation in the One concentrated solar power farm near Upington and the entrepreneurs remains paramount, such as the provision of risk PROJECTS FINANCED
agriculture industry. Kakamas Hydro Electric Power project, which is harnessing energy capital. This is evident in the IDC’s funding of Kalagadi Manganese, IN THE NORTHERN
Upington has been earmarked as a special economic zone and from the water in the Orange River. a mine based in Hotazel, which is partly owned and managed by a
one of the possible sites for a proposed solar park. This will go a The IDC acknowledges that renewable energy is a sector on the female entrepreneur. CAPE IN THE PAST
long way to unlocking localisation opportunities in the renewable rise and may just be the one demanding the most funding in the During the 2015/16 financial year, the IDC approved the provision
and agroprocessing industries. near future. of R360 million to youth-empowered businesses; R711 million to FIVE YEARS
It’s a huge injection for this province and it is quite strategic for BEE businesses; and R150 million to black industrialists in the
Economic challenges the country’s energy needs. With the number of approvals for Northern Cape alone.
The effects of an economic downturn are particularly acute in a renewable energies in the province, it has moved the Northern
smaller province with predominantly primary industries and high Cape to second in terms of IDC provincial exposure, only behind Top tips for entrepreneurs in the province
unemployment. Gauteng. . Take ownership of the business planning process. R711m
The decline in commodity prices such as iron ore had a The Abengoa plant, with its 4 000 solar mirrors, will generate . Ensure the application is complete (beyond the business plan).
significant effect on the mining industry in the Northern Cape, up to 50 megawatts of energy, and the hydro project in Kakamas . Have knowledge of red tape and legal compliance
which affected not only the mining companies, but also its will provide 10 megawatts. requirements in the relevant industry. INVESTED IN BEE
suppliers. When it comes to solar power projects in particular, our . Understand your industry (market, competition, business
To keep up with the challenging economic climate and create approach is unique compared with other funders: we buy shares cycles). BUSINESSES IN 2015/16
much needed jobs, the province has to start developing a for communities close to these projects. . Bring in partners to add skills, experience and investment,
secondary industry through beneficiation and manufacturing. Once in operation, these solar power plants do not usually especially for youth applications. FINANCIAL YEAR

PUTTING PEOPLE TO WORK IN ... R360m

RAISINS HYDROPOWER MANGANESE MINING INVESTED IN YOUTH

t least 500 farm workers in he Orange River has been useful alagadi Manganese is South BUSINESSES IN THE
Upington are now able to to farmers for decades – they Africa’s only manganese mine
Amake ends meet after the Thave grown their crops along its Kpart-owned by a female 2015/16 FINANCIAL
IDC funded Farmers Pride Raisins. banks, using its water and fertile soil to entrepreneur.
Leaving his stable job to pursue produce citrus, grapes and other cash The company is held by ArcelorMittal YEAR
what he had been yearning to do crops. (50%), Kalahari Resources (40%) and the
all his life, Tubby van Heerden, But in modern times, the river’s use IDC (10%), and has been involved in the
CEO of Farmers Pride, approached has been extended beyond the exploration for manganese in the
the IDC for funding to buy a company that is agricultural sector and into green Kalahari Basin. The three farms on
just a few kilometres from his home. industries. Electrical engineers are now using its waters to generate which the company holds new order mining rights are believed to R11.4bn
He processes the sought-after dried fruit, including flame, golden and supply electricity for generations to come. The Kakamas Hydro overlie about 960 million tons of manganese ore.
seedless, sundried sultanas and Thompson raisins. Most of the Electric Power project will make use of the river’s kinetic energy to The project will have a total value of R4.3 billion, and will consist of:
raisins produced by Farmers Pride are destined for the export generate 10 megawatts of electricity. The project is a run-of-river . An underground mine to produce 3 million tons a year of
market. design at the existing Neusberg Weir, which feeds water to the manganese ore. APPROVED IN
The IDC also financed a 30% stake for a workers’ trust. When Neusberg Power Plant. . An ore preparation facility and sinter plant, which will beneficiate RENEWABLE ENERGY
many other funders were unwilling to take the risk, the IDC was Australian engineering company Hydro Tasmania partnered with the the ore into 2.4 million tons a year of a high-grade sinter.
the first to step in to fund a project such as this. IDC, Hydro SA, Old Mutual, the Kakamas Hydro Community Trust . A smelter located in the Coega Industrial Development Zone near PROJECTS IN THE PAST
and Nedbank to construct the Kakamas Hydro Electric Power project. Port Elizabeth, which will produce 320 000 tons a year of high-carbon
The energy modelling for the project is estimated at 69.25 ferromanganese. The smelter will consume about 700 000 tons a year FIVE YEARS
gigawatts per hour of net electricity generation per year. The output of the sinter, leaving 1.7 million tons for export.
could light as many as 5 000 homes.