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HomeCompany NewsInvestments in key sectors are boosting the economy of Mpumalanga

Investments in key sectors are boosting the economy of Mpumalanga

A regional overview of Mpumalanga Province from a trade and investment perspective.

Mpumalanga Province

Mpumalanga has rich and varied mineral resources and fertile soil that supports diverse farming operations. South Africa’s major power stations, three of which are the biggest in the southern hemisphere, are in Mpumalanga. The building of the new Kusile power station is one of the biggest infrastructure projects in the country’s history.

The province also hosts large companies in the manufacturing sector, with internationally renowned firms such as Sasol (synthetic fuels and chemicals) and Xstrata (ferrochrome) having large operations in Mpumalanga.

The province’s rich agricultural produce is used by companies such as McCain, Nestlé and PepsiCo and there are also pulp and paper plants (Sappi and Mondi), fertiliser facilities and textile manufacturing concerns. The decision by Sappi to start producing dissolving wood pulp at its Ngodwana Mill has significantly increased the manufacturing capacity of the province. York Timbers is a leading forestry company and the sugar mills and refinery of RCL Foods (formerly TSB Sugar) are large contributors to the provincial economy.

Sasol, the integrated oil, gas and chemicals company, runs several plants at Secunda. Products manufactured at the complex include synthetic fuel, petroleum, paraffin, jet fuel, creosote, bitumen, diesel and lubricants. The primary feedstock for synthetic-fuel production is coal, and the plant is located in the heart of Mpumalanga’s coalfields.

More than 80% of South Africa’s coal is sourced in Mpumalanga, with the town of Witbank (Emalahleni) being the centre of the industry. Other minerals found in the province include gold, platinum group minerals, chromite, zinc, cobalt, copper, iron and manganese.

The southern half of the eastern limb of the platinum-rich Bushveld Igneous Complex runs south towards the towns of Lydenburg and Machadodorp. Deposits of chromite, magnetite and vanadium in this area are the basis of the ferro-alloy complex in Witbank-Middelburg and Lydenburg. Nkomati Mine is South Africa’s only pure nickel operation.

Columbus Stainless in Middelburg is a major producer of stainless steel, while Middelburg Ferrochrome, Thos Begbie and the Nelspruit-based Manganese Metal Company are among other important heavy industrial companies.

Mining is responsible for 21.8% of provincial GDP, wholesale, retail, catering and accommodation is 13%, manufacturing (12%) and general government services (10.8%) are other major contributors. Finance, real estate and business is 9.4%.

Investment and infrastructure

The biggest companies in Mpumalanga’s most significant sectors have been investing heavily in infrastructure and operations. Global energy and chemicals company Sasol regularly spends tens of millions on upgrades and improvements at its Secunda complex. The Sasol Synfuels refinery is the only commercial coal-to-liquid fuel plant in the world and constitutes a key component in South Africa’s oil and gas sector. In July 2017 Sasol announced that the synfuel plant produced a record annual output.

Sasol Mining is also very active in the province: just three projects with which it is currently engaged are valued at more than R8-billion. Exxaro Resources is investing R3.8-billion in a new mine at Belfast.

Another global giant, Sappi, has invested heavily in the conversion of its massive Ngodwana Mill and other companies in the paper and forestry field such as Mondi and York Timbers make large contributions to the province’s economic growth.

The restarting of the Evraz Highveld steel mill in 2017 was particularly good news, after the company went into business rescue two years before. ArcelorMittal South Africa is supplying feedstock to the mill and has an option to purchase.

The Provincial Government of Mpumalanga has been talking to several foreign countries about investments in the province. An assembly plant for Minsk Tractor Works is one of the outcomes of this activity, and several agreements relating to training and trading have been signed. Russia, Belarus, China and Oman are some of the countries with which Mpumalanga is engaged with. The Mpumalanga Economic Growth Agency (MEGA) hosted a People’s Republic of China Business Forum which was attended by 19 large Chinese companies.

A major goal of the provincial government’s Mpumalanga Economic Growth and Development Path (MEGDP) is to expand the industrial base of the provincial economy. The focus is on beneficiation, agri-processing and value-chain development.

Separating non-ferrous metals

Overseeing infrastructure development in the province is the responsibility of the Department of Public Works, Roads and Transport, which must ensure that various departments’ projects are coordinated. When it comes to major projects, a new unit will be established in the Office of the Premier, the Provincial Project Management Unit.

Several investment projects aimed at providing infrastructure in the tourism sector have been put forward by the Mpumalanga Economic Growth Agency (MEGA). Mpumalanga will host the 2017 National World Tourism Day in September, an event that will help drive the province’s aim to turn this already healthy economic sector into an even bigger creator of wealth and jobs. Heritage and Cultural Tourism are two of the focus areas in the provincial plan because Mpumalanga is already a leader in nature reserves and parks. Following on the international drive, with a special focus on BRICS countries, provincial authorities are investigating a tourism airlift route between Moscow and Mpumalanga. The “TriLand Brand Initiative” aims to join the province in marketing efforts with neighbours Swaziland and Mozambique.

A huge investment is being made on the railways that run to and through Mpumalanga. This includes upgrading the commuter railway linkages to the province from the province of neighbouring Gauteng and building new railway lines to transport coal through Swaziland and on to either Richards Bay or Maputo in Mozambique.

Information and Communications Technology (ICT) is another form of infrastructure that has been receiving investment in recent times. A provincial ICT Strategy has been developed to coordinate and implement steps to improve ICT performance in the province.

Geography

The geography of the province is sharply delineated by the Drakensberg escarpment, which forms the dividing line between the western grasslands at high altitude (Highveld) and the subtropical component to the east, the Lowveld. The central region of the province is mountainous, with some very dramatic landscapes presenting exciting vistas for visitors. The Lebombo Mountains rise in the east. The area south of the capital city of Mbombela (Nelspruit), near Barberton, has some of the world’s oldest rocks forming the Crocodile River Mountains.

The southern and northern Highveld regions produce large quantities of field crops such as barley, soybeans, maize, grain and sorghum. Potatoes also flourish in this area.

Most of the province receives summer rainfall, often via thunderstorms. Frost is common on the Highveld, but is almost absent in the subtropical regions where fruit, nuts and citrus thrive. Differences in temperature and rainfall between the Highveld and Lowveld can be considerable. One of the fastest growing agricultural sectors is macadamia nuts. These are cultivated in the Lowveld and are exported in ever-growing volumes. The Nelspruit district in the Lowveld is South Africa’s second-biggest producer of citrus fruit, while vegetables of all sorts do well in this area too.

Large parts of the province are located in the so-called Middleveld comprising high-plateau grasslands. Forestry operations are found in central and south-eastern Mpumalanga, but the heart of this important industry is around Sabie in the east. The Mpumalanga forestry sector is one of the most important in the country: 11% of the total land area of Mpumalanga is covered either by plantations or natural forests. Large sugar operations are found in the south-east of the province.

The province has excellent roads and railway connections and is well served by airports, airstrips and heliports. The Kruger Mpumalanga International Airport and Hoedspruit Airport are the province’s two main airports.

The Maputo Development Corridor is a transportation corridor comprising road, rail, border posts, port and terminal facilities, running from Pretoria in Gauteng through Mpumalanga to the Port of Maputo in Mozambique. The corridor supports high volumes of cross-border freight services and aims to boost trade within and beyond the region. Industry and tourism benefit from the concentration of resources and ease of transportation. This international initiative emphasises Mpumalanga’s excellent location as a logistics and transport hub.

The capital city

Mbombela (formerly Nelspruit) is the capital city of Mpumalanga province and the main town of the Mbombela Local Municipality within the Ehlanzeni District Municipality.

With a diverse manufacturing sector and as the headquarters for most financial institutions in the province, Nelspruit also lies in a strategic position along the Maputo Development Corridor (MDC). The MDC, along the national N4 highway, forms the link between the central Gauteng region and the Mozambican port of Maputo.

Kruger Mpumalanga International Airport is the gateway to many of the tourist highlights in the province and the older aerodrome south of the city is used by small planes. The city is also well served by rail links which connect to Swaziland, Mozambique and other South African provinces.

Hoedspruit Airport

Manganese Metal Company is the largest producer of pure electrolytic manganese metal in the world. The products are created from high-grade manganese ore extracted by means of a hydrometallurgical process. Other manufacturing enterprises in Mbombela include paper and pulp producers and furniture factories. The new University of Mpumalanga has its headquarters in Mbombela. The Lowveld Show and the InniBos Arts Festival are major events that showcase Mbombela’s diversity and importance as a regional hub.

The fertile Crocodile River Valley ensures good fruit crops in a typically subtropical climate. Mangoes, litchis and avocadoes are among the crops grown most profitably and the town is at the centre of the regional citrus sector. The Lowveld Botanical Gardens contains many rare species.

Ehlanzeni District Municipality

Towns: Mbombela, Malelane, Hazyview, White River, Sabie, Lydenburg, Barberton.

The urban centres are nodes of manufacturing in this region, which is also at the heart of Mpumalanga’s tourism offering. The Kruger National Park, the Blyde River Canyon, Bourke’s Luck Potholes, God’s Window and other attractions make this a highly desirable place to visit. Citrus, sugar and forestry are the major agricultural products, all being major contributors to export earnings. The Sappi paper mill at Ngodwana is one of the biggest of its kind while RCL Foods operates two large mills in the east. The population is about 1.5-million.

Nkangala District Municipality

Towns: Middelburg, Delmas, Kriel, Emalahleni (Witbank), Emakhazeni (Belfast), Dullstroom, Emgwenya (Waterval Boven).

This area straddles the north-west. Rural and traditional in the north-west where the King of the Ndebele is still revered, there is a concentration of coal mining and steel production in the industrial centre. The north-east hosts a lively trout-fishing sector that includes hatcheries and accommodation for tourists. Just over a million people live in the district.

Gert Sibande District Municipality

Towns: Bethal, Secunda, Standerton, Ermelo, Volksrust, Mkhondo (Piet Retief), Carolina.

Power stations abound in this region which stretches across the southern half of the province and it is the home of the giant Sasol facilities at Secunda. The area is also on the top of South Africa’s maize triangle and agriculture and food processing are well-developed sectors. Sheep, chicken, sunflower and sorghum are just some of the areas’s many
agricultural products. Nestlé has a processing plant at Standerton and Mondi has a pulp and paper facility in the south-east. About 900 000 people live in the Gert Sibande district.

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