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

Muzi Shange

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 long-term 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 value-added 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 medium-sized 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 customs-controlled 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.”

About RBIDZ

The RBIDZ is a organization made up of real people, with a real dedication, and passion to effect real change in South Africa. This commitment and energy is apparent in all dealings with not only each other but with potential investors too.

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