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HomeConstruction and EngineeringStrategic infrastructure investment opportunities in the Northern Cape

Strategic infrastructure investment opportunities in the Northern Cape

An economic overview of the Northern Cape Province in South Africa reveals the vast potential of the region which is being developed through strategic infrastructure development.

Sol Plaatje University in the Northern Cape Province of South Africa will celebrate its 10-year anniversary in 2023. For the 2023 academic year a total of 28 454 applications were received. This is an increase of just under 9 000 compared to 2022. The university intends increasing the number of students enrolling in Natural and Applied Sciences and Economic and Management Sciences.

The university excels in teacher training, but an expanding curriculum speaks both to being able to exploit the Square Kilometre Array radio telescope link through subjects such as ICT and data science and an appreciation of the past via heritage studies and paleo-sciences. The university’s location in an arid region gives it a locational advantage in studies of agriculture in water-stressed conditions.

Building on the campus, which will eventually cover 190 000 m², is expected to continue for another decade. The fine buildings which have been created so far were the result of a series of architectural competitions. Some of the completed buildings went on to win national and international awards. Expenditure on the university’s infrastructure since 2013 has amounted to R2.2-billion. In 2022, R350-million was spent.

“Infrastructure investment is the backbone of a thriving economy,” says Northern Cape Premier Dr Zamani Saul. Provincial priorities are schools, health facilities, roads, housing, energy, water and sanitation. Over the three years to February 2023, R10-billion was spent by the Northern Cape Provincial Government, R4.2-billion of it on social infrastructure.

Infrastructure investment is the backbone of a thriving economy

Invest SA, through the National Department of Trade, Industry and Competition (dtic), has established a provincial One Stop Shop for investors, lowering the cost of investing and helping to iron out any bureaucratic delays. Another angle for attracting investors to the province is to be part of the drive to improve infrastructure.

Northern Cape Investment Prospectus 2023

Special Economic Zones

One of the most important types of infrastructure in the Northern Cape is Special Economic Zones.

Various articles in the 2023 edition of the Northern Cape Business journal highlight the special focus of each of the Namakwa Special Economic Zone (with Vedanta Zinc International as the core tenant), the Upington Industrial Park, the Kathu Industrial Park, the De Aar Logistics Hub and the Boegoebaai Port and Green Hydrogen Cluster.

The Northern Cape, as a dry province that relies heavily on agriculture, has adopted a Northern Cape Climate Change Adaptation Response Strategy. This allows for a framework to tackle climate change issues. Floods, droughts and fires are becoming more frequent and more severe; planning can at least mitigate the negative outcomes to some extent.

Other support for agriculture will come in the form of infrastructure at the Upington Industrial Park, which will act as a services centre for road, rail and air transport, agriculture, agro-processing and manufacturing.

Farmers and agro-processors are increasingly drawing attention to the need for good roads for the delivery of their products to market and they will be hoping that these parks will help to provide the necessary infrastructure.

In a similar vein, the Namakwa SEZ in Aggeneys will become an industrial cluster for mining and agriculture services, beneficiation and manufacturing.

The Boegoebaai Port and Green Hydrogen Cluster has the potential to be transformative, especially as it might signal a real and significant step towards the establishment of a green hydrogen market in South Africa, and therefore a step towards a cleaner, greener energy environment.

Green hydrogen is expected to drive the creation of a deepwater port.

Bid Window 6 of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was launched in April 2022, promising to bring a further 2 600MW to the national grid. However, it has been found that the national grid, especially in provinces like the Northern Cape where many projects have already been rolled out, lacks capacity to accommodate new projects. In the short term, this means that provinces like Mpumalanga will receive proportionally more projects while grid constraints are sorted out.

Since the first bid was finalised, a total of 66 756GWh of renewable energy has been procured, much of it in the Northern Cape which has a particularly strong suit in solar power projects.

Northern Cape Business 2023 Edition

Mining

The single biggest mining investment in South Africa is moving ahead smoothly near Aggeneys where Vedanta Zinc International has been extracting zinc since 2018.

The impact of large mining projects was made clear by Premier Dr Zamani Saul in his 2023 State of the Province Address. He highlighted the social and community efforts being made by Vedanta Zinc International over and above the investments in the two phases of the Vedanta Mine. The mining investment amounts themselves are considerable: phase one, R6-billion (2 700 permanent jobs) and phase two (R7-billion; about 3 500 jobs and many opportunities for SMMES). The company has also contributed to the construction of an oncology treatment centre in Springbok. The centre is designed to strengthen support for cancer patients on the way to referral pathway to the tertiary hospital in Kimberley.

New manganese projects are being undertaken in the eastern part of the province with the new mine near Hotazel, Mokala, one of the most prominent. Interest in copper mining (and retreatment) is growing, not least because copper has a role to play in the green economy. Electric vehicles are dependent on copper and it can transmit and help store energy.

The province’s vast iron-ore mines continue to produce huge quantities of material, subject only to the capacity of the rail network run by Transnet to deliver what is produced to the country’s ports. Minerals Council South Africa, the industry’s employer organisation, estimates that the opportunity cost to the minerals sector of bad transport logistics in 2022 was about R50-billion.


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