Funds for smelter approved

Cindy Preller

THE Eastern Cape is a step closer to acquiring a megaproject that will create thousands of jobs. A R2.2-billion loan has been granted to Kalagadi Manganese to use partly for the construction of a ferromanganese smelter at Coega near Port Elizabeth.

It is estimated the R7.2-billion smelter will create 7500 direct and indirect jobs.

The African Development Bank this week granted the loan to Kalagadi Manganese to complete the funding requirements of its integrated mining and beneficiation project at Hotazel, in the Northern Cape. The funds will also part-finance the construction of the smelter at Coega.

The mine at Hotazel will be connected using a rail corridor to Ngqura harbour and the first trains to bring the manganese for export to the Bay are expected to arrive at the end of this month.

About a third of the manganese produced at the mine will not be exported, but will remain in the Coega Industrial Development Zone to produce ferromanganese at the smelter.

Kalagadi Manganese chairwoman Daphne Mashile-Nkosi said the first consignments of manganese for export purposes would be transported in containers.

"We would also like to at least start with the bulk earthworks for the smelter by April as we do not want the Record of Decision to lapse.

"The smelter will create 800 full- time jobs once it is operational. However, with the construction period of between two and three years, we estimate that about 7500 direct and indirect jobs will be created by the project," she said.

Additional funding for the R7.2-billion smelter was in the process of being negotiated, Mashile-Nkosi said.

She is bound by a confidentiality clause not to say who the other development financier of the smelter will be.

"We want the province to benefit from the smelter and it must add value to the region.

"Both the Kalagadi mine and smelter include a beneficiation process which will create jobs, infrastructure and the social upliftment of the local communities."

Nelson Mandela Bay Business Chamber chief executive Kevin Hustler welcomed the news of financing being approved for the smelter.

"This is an excellent development for the Eastern Cape. The construction of the smelter in our region will be a catalyst to economic growth and development, which will lead to the creation of much-needed jobs.

"The windfall boosts the Eastern Cape's attractiveness to investors into the region, and offers excellent opportunities for the development of SMEs and entrepreneurs in associated sectors," Hustler said.

The Coega Development Corporation (CDC) also welcomed the announcement, pending finalisation of lease agreements and environmental impact assessments.

CDC spokesman Ayanda Vilakazi said Kalagadi was finalising various technical specifications.

"We look forward to working on finalising the relevant documentation.

"This is a very positive investment for the Eastern Cape, and comes with immense benefits for the region," Vilakazi said.

This week's signing of the R2.2-billion loan from the African Development Bank represents the bank's first mining beneficiation and industrial project in South Africa.

African Development Bank head of private sector operations Mouhamadou Niang said the project was in line with the bank's policy to support gender equality, women empowerment, and the development of women's businesses and entrepreneurs.

When fully operational, the mine will process three million tons of manganese ore a year.

The beneficiation will result in 2.4 million tons of high-grade manganese ore being produced.

The smelter plant will initially be equipped with three 63 MVA or four 48 MVA closed submerged arc electric furnaces which will have the capability of producing both high-carbon ferromanganese and silico manganese.

The ferromanganese produced by the smelter can be used in the steel industry in South Africa and for export markets.