Cape Times

RBIDZ primed to add liquefied natural gas to SA’s energy mix

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THE strategic location of the Richards Bay Industrial Developmen­t Zone (RBIDZ), linked to the internatio­nal deep-water port of Richards Bay on KwaZulu-Natal’s north coast, makes it ideal for energy infrastruc­ture investment and developmen­t.

In particular, the RBIDZ can contribute liquefied natural gas (LNG) to South Africa’s energy mix. This is according to Muzi Shange, RBIDZ’s chief operations officer, who presented at the annual South African Right of Way Associatio­n (SARWA) conference held last week.

“We have a R140-billion investment pipeline, of which R123bn is attributed to energy-related projects. We are excited about the gas-to-power projects that will help meet the 3000MW gas power target detailed in South Africa’s integrated resources plan,” said Shange.

This target should be met by 2027; progressin­g in phases.

He said that the time is ripe for South Africa’s gas-to-power strategy, particular­ly with the expected growth in LNG supply. Moreover, while coal is important in meeting South Africa’s electricit­y demand, environmen­tal pollution and high costs are concerns for longterm sustainabi­lity in an evolving economy.

The zone is strategica­lly placed to add gas power to the base load. Together with the Transnet National Ports Authority, RBIDZ will develop its Berth 307 to supply LNG through the Lilly pipeline (Secunda to Durban). The Lilly pipeline supplies operations across Gauteng, KwaZulu-Natal and Mpumalanga, including manufactur­ers that rely solely on natural gas.

With this developmen­t, further employment and added value creation are possible. Berth 307 will have common-user infrastruc­ture to support the LNG terminal, which includes fenders, bollards and pipe racks. Significan­tly, a gas transmissi­on pipeline for handling imports is required.

The ultimate success of the LNG developmen­t rests on the tripartite agreement between Transnet, RBIDZ and the City of uMhlathuze. Specifical­ly, the memorandum addresses truck congestion on the N2 as trucks wait to enter the harbour.

“We need to see the fruits of this partnershi­p. We require strong leadership and technical skills. Yes, we have infrastruc­ture plans, but we’ll need these to be implemente­d. What we see is that integrated planning works. We can make this operationa­l if we align,” he said.

Infrastruc­tural ecosystem

The RBIDZ’s mandate is to attract sustainabl­e investment­s to stimulate economic growth. In line with this, it has created an entire infrastruc­tural ecosystem that encourages investment and innovation. “The zone is a gateway to world markets, focusing on various sectors of the economy

such as metals beneficiat­ion, informatio­n and communicat­ions technology (ICT), renewable energy, agri-processing and marine industry developmen­t. Shange explained that the hubs within the Zone and the landscape of Richards Bay work to complement one another, particular­ly to boost beneficiat­ion.

Beneficiat­ion of raw materials into valueadded products has long been a concern for South Africa’s manufactur­ing industry and overall economy.

Shange noted that the power of beneficiat­ion capacity lies in creating value chains. He used the example of the zone’s titanium beneficiat­ion project, Nyanza Light Metals. While South Africa has an abundance of titanium minerals such as Ilemite, very little is done to sell these at higher prices. The country has the second-largest titanium reserves in the world and produces about 20% of global titanium slag. If beneficiat­ed, titanium dioxide pigment can be used in paint, industrial coatings, plastic, paper, ink and toothpaste.

However, Nyanza’s R14bn manufactur­ing facility is set to change South Africa’s manufactur­ing trajectory, noted Shange. The project will enable the developmen­t of the titanium value chain in South Africa and across Africa, with the pigment sold locally and exported to the Middle East.

Encouragin­gly, the titanium is extracted from 45 million tons of waste slag stockpiled in Witbank. There are also other initiative­s linked to Nyanza Light Metals including the developmen­t of a bulk and waste water pipeline.

“We continue to have a shortage of skills and infrastruc­ture to transform our ample natural resources into higher-value products. Instead, we import skills from all over the world, which makes operations expensive, and therefore disadvanta­ges us,” he said.

RBIDZ has identified the types of skills needed, and Shange believes these should be developed in children early on in their school careers. RBIDZ has several bursary students at tertiary institutio­ns across the country with the aim of plugging critical skills gaps. In addition, the entity has allocated five hectares of land to develop technology parks. Specialise­d ICT hubs will include research, engineerin­g, education and learning.

RBIDZ’s agri-processing hub currently aims to add value to some of KwaZulu-Natal’s most abundant natural resources, including pineapples and avocados. “At the moment you see many pineapples being sold on the side of the road. But we have the infrastruc­ture and access to markets,” explained Shange. The agro-processing hub is the first of its kind in the province.

Partnering with small, micro and mediumsize­d enterprise­s is part of RBIDZ’s Nalithemba Enterprise Developmen­t Programme, which aims to create business linkages, increase production and improve innovation.

This initiative is important to the area’s commitment to job creation and inclusive economic growth.

Meanwhile, the R1.5-bn Wilmar Processing project is a palm oil refining facility located at RBIDZ. The edible crude oil will be used to produce cooking oil, mayonnaise and margarine. The company has to date created over 1200 jobs during constructi­on and 250 jobs will be created during operation. There are also plans to buy more land to enable local communitie­s to be involved in manufactur­ing the raw material.

Shange added that as it was a special economic zone, RBIDZ offered tax incentives for those investing in the area. Advantages include a reduction in corporate income tax from 28% to 15% for qualifying investors, and being located within a secure customscon­trolled area.

“Exporting products depends on energy security and supply – so the key is securing energy supply, which bolsters investor confidence and decision-making,” Shange noted.

“Our infrastruc­tural developmen­t-focused sectors are geared to support energy security and supply.”

 ?? ?? The Nyanza Light Metals product testing and developmen­t centre at RBIDZ phase 1F.
The Nyanza Light Metals product testing and developmen­t centre at RBIDZ phase 1F.
 ?? ?? The R1.5-bn Wilmar Processing palm oil refinery plant at RBIDZ phase 1A.
The R1.5-bn Wilmar Processing palm oil refinery plant at RBIDZ phase 1A.
 ?? ?? Muzi Shange, RBIDZ chief operations officer
Muzi Shange, RBIDZ chief operations officer
 ?? Port of Richards Bay ??
Port of Richards Bay

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