Western Cape Business News

Send  Share  RSS  Twitter  23 Feb 2011

VENTURES: Will Saldanha Get Lucky?


Recent Western Cape Business News

THE Cape Chamber of Commerce has welcomed the plans for a new R21 billion steel mill to rival Arcelor-Mittal as a project which could boost the economy of the Western Cape.

Saldaha is South Africa’s steel port and the products of the new mill should flow through the port creating many jobs in the process,” said Michael Bagraim, president of the Chamber.

The mill is to be a joint venture between the state-run Steel Authority of India (SAIL) and Lazarus Zim’s Afripalm.

We are anxiously awaiting a decision on where the mill will be built, but we think Saldanha will be the logical choice. We already have one steel plant in Saldanha so the infrastructure and engineering support is in place,” Bagraim said.

According to the official announcement on the project, the mill will be built either at the coast or near the iron ore producing areas. “In effect this means Sishen in the North Western Cape or Saldanha. The two centres are already connected by the most efficient rail service in the country so with a huge ore supply already being delivered to Saldanha, it makes sense to add value to the ore at the coast before exporting it in the form of steel,” Bagraim said.

Steel could also be supplied to South African industry from Saldanha because the ore trucks were empty when they returned to Sishen and it would be a simple matter to load them with steel products.

Bagraim said the steel mill appeared to be one of the two major, but as yet unnamed, Western Cape projects which had applied to the Government for manufacturing tax incentives. The second project was probably a Rare Metals Industry plant to refine Titanium and Zirconium ore from the huge Namakwa Sands reserves just north of Saldanha.

If we are right this will be a big boost for the Western Cape economy and for South Africa. Both projects fall into line with Government plans to promote the beneficiation of our minerals to add value before exporting. Together they should give the necessary critical mass to ensure the success of the planned Industrial Development Zone in Saldanha,” Bagraim said.

As an example he said two big steel plants would be customers for the natural gas deposits off the West Coast. “With customers like this in place and the inevitable gas-fired combined cycle power station it would become viable to exploit the undersea gas field,” he pointed out.

 “Once we have the gas ashore it will provide an alternative source of process heat for industry and this will reduce the reliance on expensive Eskom electricity. It is all coming together very nicely for the Western Cape,” Bagraim said.

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