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Report: Chinese investors to fund US$10B metallurgical complex in South Africa

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Report: Chinese investors to fund US$10B metallurgical complex in South Africa

Chinese investors signed agreements to build a US$10 billion metallurgical complex in South Africa, with construction set to start in 2019, Reuters reported July 27.

According to an executive involved in the project and a provincial official, the agreement was signed during the recent state visit of Chinese President Xi Jinping to South Africa.

The project will see the construction of plants with production capacities of 3 million tonnes per annum of stainless steel, 3 million tonnes per annum of ferrochrome and 500,000 tonnes per annum of silicomanganese.

South African Trade and Industry Minister Rob Davies said July 24 that China was considering a metallurgical project in the country's special economic zone, without disclosing further details.

Richard Zitha, a project executive at the Musina-Makhado special economic zone, said Chinese companies were leading the project, but did not disclose the names of the investors.

"The investors have been in South Africa for around a week and have visited mines to look for inputs for the project," said Zitha.

The capacity targets at the plants are subject to change and will be finalized by year-end. Some of the capacity is earmarked for export to China, with other products to be sold in southern African countries, Zitha said.

Additionally, the project will also house a coal-fired power plant, coking plant and coal washery, according to a presentation for the investors.

Zitha added that the investors will seek Black Economic Empowerment partners to comply with the country's rules. The investors were also open to have investors join from other countries at a later stage, he noted.

The investors are expecting to net all the required regulatory approvals by the end of March 2019, following which construction will start.