Open for business

Realising the Northern Cape vision of being ‘a modern, growing and successful province’ with sustainable development requires a firm balance of three critical enablers – social, economic and environmental factors – in order to realise an equilibrium. To enable this vision and to achieve a sustainable development, the Northern Cape has identified economic development and growth to be the first pillar of its Vision 2040.

The Northern Cape has embarked on an aggressive strategy to identify its key clusters of resources and economic activities, and to complement this with the global and SADC regional geographic demand and supply consolidation. The Northern Cape Industrial Strategy identified the Northern Cape industrial corridor, which entails resources, consumption, basic human and industrial settlements, transport and logistical infrastructure.

The Northern Cape Industrial Strategy has a north-south and east-west axis. Along these corridors, it has clustered activities and created industrial nodes that will be consolidated, add value for export, and supply local-industry demand.

A focus is the establishment of world-class infrastructure that is enabled with effective transport, logistics, energy, telecoms, human capital and a regulatory framework to facilitate the ecosystem. The Northern Cape Economic Development Trade and Investment Promotion Agency (NCEDA) is actively involved in the province’s vision for economic growth. Several key industries have been identified, namely agriculture and agro-processing; mining and mineral beneficiation; a ‘just’ energy sector; manufacturing; transport, services and logistics; and knowledge and innovation. Among the critical nodes identified are the following.

Boegoebaai
Boegoebaai lies approximately 60 km north of Port Nolloth and 20 km south of the border between Namibia and South Africa, in the Richtersveld Local Municipality area. As a SADC bulk and just-energy cluster, with the aggregation of green hydrogen, the primary opportunity of the site is the short distance between the coastline and relatively deep water. The location places it in close proximity to rich mining and agriculture sectors compared to other existing ports.

It is to be noted that the envisaged Boegoebaai deepwater port will be a greenfields development. The project is the first development of this magnitude to be undertaken by the province in the past 26 years. This investment has already secured an anchor investor in Sasol, as well as key partnerships with the Port of Rotterdam.

The Northern Cape Green Hydrogen Strategy was launched to the global community at COP 26 in November 2021, with key articulations that drive its focus. There are key objectives that the strategy seeks to archive and that – coupled with the MoA that has been signed between the Northern Cape government and Sasol to facilitate feasibility studies – would provide certainty on the investment over the next two years.

The Northern Cape Green Hydrogen Strategy is the pathfinder for South Africa that will enable the country to move towards being a key global exporter of green hydrogen that will accrue to a minimum of 40 GW of electrolyser capacity.

The project is transitioning with work undertaken together with the pathfinder investor to realise the throughputs that have been contemplated in the Northern Cape Hydrogen Strategy. This coincides with the net zero ambition set at COP, which seeks to decarbonise critical areas such as transport logistics, mining as well as ‘hard-to-abate sectors’ by 2050. The project is of strategic importance and will enable the overarching attainment of a just-energy transition.

Transport, services and logistics has been recognised as a key node in the development of the Northern Cape’s economy

Namakwa SEZ
As an agricultural, services, sulphuric acid and zinc cluster, the proposed Namakwa SEZ is located in the small mining town of Aggeneys. Aggeneys is in the Khai-Ma Local Municipality within the Namakwa District Municipality of the Northern Cape Province. Aggeneys is 66 km from Pofadder (headquarters of the local municipality) and 110 km from Springbok, where the office of the district municipality is located.

The value proposition of the Namakwa SEZ is based on the existence of the Gamsberg zinc mine and the proposed building of a smelter by Vedanta Zinc International. These would be the anchor tenants of the SEZ.

It is proposed that a smelter be built to treat zinc concentrate produced at Gamsberg. The zinc concentrate produced at the existing concentrator plant will be treated in the smelter using the conventional roast-leach-electrowinning process.

The SEZ designation application is in its final stages and it is envisaged that the final and complete designation will be granted by the Department of Trade, Industry and Competition in September 2022.

Various domestic and international investment partners have indicated a keen interest to invest in the Namakwa SEZ, with industries that include but are not limited to mineral beneficiation; construction; agriculture; industry; green-energy production; petrochemical; transport; engineering supplies; localisation; and SME development.

NCEDA is actively working to promote the northern Cape industrial corridor, which has an important role to play in the Vision 2040 strategy

Upington Industrial Park
With a focus on agriculture, renewable energy, services in aviation maintenance, automotive testing, logistics and agri-processing, the industrial park will also feature a business incubator to assist SMMEs.

Upington Industrial Park is situated next to Upington International Airport and therefore offers the potential investor the luxury and efficiency of various modes of transport. Through the industrial park programme, investors can enjoy a number of benefits, ranging from a controlled access point to the incentivised provision of infrastructure and relaxed municipal tariffs.

Kathu Industrial Park
This is a mining services and beneficiation cluster in the centre of the global iron-ore and manganese hub. The Sishen Iron Ore Company (SIOC) and the Industrial Development Corporation (IDC) have funded various studies to assess the feasibility of developing an industrial park to stimulate sustainable long-term economic development for the Northern Cape region.

The envisaged development will attract a variety of tenants delivering industrial goods and services within a synergistic environment supported by centralised services and complemented by a business incubation and training complex.

With the mining industry being the largest real economic sector in the Northern Cape economy (based on contribution to GDP), the town of Kathu – located in the Gamagara Local Municipality – is the preferred location because of its central proximity to the Postmasburg-Hotazel iron-ore/manganese belt and various established and pending REIPPP projects. It is envisaged that the Kathu Industrial Park (KIP) will serve as a catalyst for accelerated growth of other economic sectors.

As far as its status is concerned, the bankability study, project-development plan, environmental permitting, land re-zoning and various scope re-alignment and market studies have been completed. The investor-engagement phase has been substantively completed (including investor term sheets and KIP formational agreements), with provisional commitment secured from IDC, Kumba, the SIOC community development trust, Assmang and South32. However, a funding shortfall of ZAR120 million is still to be resolved prior to concluding the KIP formation and undertaking Phase 1 design development. The project has been submitted to Infrastructure South Africa to register as a catalytic project.

The designation application of the Namakwa sez is reaching finalisation and is expected to be approved by September 2022

De Aar Logistics Hub
As a SADC intermodal cluster, the project entails the construction of an inland intermodal system comprising a container terminal, vehicle parking terminal, and warehouse/cold room terminal.

The Northern Cape is a major exporter of table grapes, fruit and meat, and is responsible for much of the cattle, sheep and goat farming in the country. Approximately 60% of the commodities from large producers are already moved from Hotazel by rail through the province via De Aar or Bloemfontein to Gqeberha. Various other commodities are moved via rail through De Aar, of which the most notable are cement from the domestic market, coal and lime, and containers holding general cargo and automotive components.

Other initiatives see Kimberley earmarked as a human-capital development, research and innovation centre, while the Square Kilometre Array (SKA) project is designated as a research node.

The Northern Cape Industrial Corridor will position the Northern Cape within the South African and western SADC region as a shared collation and support centre, therefore realising its vision of ‘a modern, growing and successful province’. The NCEDA is also part of the Invest SA One Stop Shop and can assist investors.