Sunday World (South Africa)

Brics economic spin-offs and partnershi­p possibilit­ies

Vedanta benefits local industries

- Phapano Phasha • Phasha is a researcher and policy maker

The 50th Brics summit held in Johannesbu­rg late last year is regarded by most analysts as epochal in both geoeconomi­c and geopolitic­al terms. As of 2023, the economic weight of the initial five nations in GDP terms has already surpassed that of the G7 made up of the world largest developed economies.

The entry of the six new members into the Brics family – Egypt, Ethiopia, Argentina, Iran, Saudi Arabia and the United Arab Emirates – signifies, as described by various political analysts, a shift and an expansion in the global landscape.

But the big question is: will ordinary South Africans take advantage of the opportunit­ies presented?

South Africa’s influence as a Brics partner signals an opportunit­y for South Africans to increase their interactio­ns with businesses and institutio­ns within the bloc through investment­s and trade, skills and technologi­cal transfer.

South Africans should take advantage of the institutio­n, as a tool to bring about the much-needed advancemen­t, and collective economic voice for the Global South and its people.

The Brics bank – also known as the Developmen­t Bank – is designed to support economic developmen­t among member states. Though initially intended to provide loans to nation-states, it also branches off to financing firms within the block as a measure to advance intra-brics industrial­isation across the region.

President Cyril Ramaphosa at the Brics summit noted the importance of investment plans needed to build a solid intra-brics economic relations.

Vedanta Zinc Internatio­nal, part of the Vedanta Group of India, is Africa’s largest zinc miner and producer of zinc concentrat­e. Located in SA with operations in Namibia, it not only mines but also beneficiat­es locally.

In 2018, at the South Africa’s investment conference, the company pledged over 20% of the total $100-billion investment target in the country. This is huge investment by a single company.

The company is an anchor investor in the Namakwa special economic zone in the Northern Cape where it employs about 4 000 people. Its proposed beneficiat­ion plant, in Gamsberg, Northern Cape, will make it a fully integrated zinc production site, with the mine, concentrat­or, and refinery complex at a single location, making it the first fully integrated zinc manufactur­ing facility in South Africa.

Furthermor­e, as the anchor investor and as part of the $20-billion investment, Vedanta has committed R16-billion in investment to the Gamsberg Zinc Mine and proposed Gamsberg Zinc Smelter, subject to the infrastruc­ture developmen­t and incentives framework by the South African government, which will undoubtedl­y unlock a range of downstream beneficiat­ions for the country and the South Africans.

There are also lessons to be learned. What Vedanta demonstrat­es is that it does not have to mine and transport the ore to India for processing. Rather, it can set up a beneficiat­ion plant in SA, benefit from other mining infrastruc­tural networks and export either within Brics, in the continent or beyond. The economic spin-offs related to this mining manufactur­ing investment is boundless, with spin offs beyond fiscal revenues that the government­s often look for.

This should also spur local investors to enter India and exploit the many opportunit­ies that exist in the country.

India’s population is large, and the middle class is growing exponentia­lly. With the largest Indian population in the world outside of India, South Africa’s integratio­n with India can be seamless if not natural and can only leap in bounds.

South Africa’s economic strength and influence rely on firms such as Vedanta to serve as catalysts. The more we populate the Brics with more intra-regional investment­s the more we increase the market power of the block and with that, the economic and political power necessary to further advance the bloc’s common agenda.

The Brics venture is one of the many investment and trade linkages that will increase mutual interests among the member-countries. It will also strengthen economic and political cooperatio­n – and the more these linkages develop, the more the country can create jobs, collective­ly lift the poor out of poverty and build a prosperous nation the country envisages.

 ?? / Gallo Images ?? President Cyril Ramaphosa and Prime Minister Indian Narendra Modi.
/ Gallo Images President Cyril Ramaphosa and Prime Minister Indian Narendra Modi.
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