New Coega boost as R1,6bn deal clinched

By Patrick Cull Political Correspondent

THE Coega Development Corporation has secured its second investment – a R1,6-billion stainless steel precision mill that is part of the offset from the multi-billion-rand arms deal.

CDC marketing and communications manager Vuyelwa Qinga-Vika confirmed the investment yesterday. The first phase would involve R640-million and the second R960-million – with the offset coming from German company MAN-Ferrostaal which is part of the German submarine consortium.

In another significant development yesterday, the Eastern Cape economic affairs department announced that it had issued an amended record of decision following an environmental impact assessment, giving Canadian aluminium giant Alcan the green light to erect a smelter at Coega.

The steel mill investment, announced by trade and industry deputy director- general Lionel October at the weekend, follows hard on the heels of a R200-million commitment by high-niche Belgian textile company Sander International.

Qinga-Vika said yesterday that the CDC had said earlier that at least three investments would be announced this year. She said the steel mill was the first investment in the Coega industrial development zone’s ferro-metals cluster – one of a series of clusters at Coega.

These included an integrated stainless steel complex, an aluminium smelter, two ferro-manganese plants, as well as ferro-nickel and ferro-chrome smelters. Smelters in the zone will be fed directly from the port and neighbouring storage area through closed conveyor systems.

Qinga-Vika said the deepwater port of Ngqura included a bulk terminal to handle the discharge of both liquid and solid feedstock.

In addition, there were also plans for a liquid petroleum gas-fired power station in the zone, as well as a peak power station.

She said the CDC had worked in close collaboration with the government and the investor to bring the steel mill project to finalisation. However, at this stage she was “not in a position to divulge any more details” because of the company’s request for confidentiality until all agreements had been signed with the CDC.

The project still needed the approval of its 26 per cent partner, the Industrial Development Corporation, “but no obstacles are expected”.

“We have the raw materials, a strategically placed location and the newest deepwater port for an easy logistics chain; and government is continually making the country one of the best locations in which to do business. As a result more investors now have Coega on their radar screen when looking at locations for investments around the world.”

The record of decision issued for the Alcan smelter clears one more hurdle for the multi-billion-rand project.

A record of decision had been issued to Pechiney when the French company was planning to construct the smelter using AP50 technology. Alcan intends to use AP35 and a technology review report was required as a result.

Alcan now has “environmental authorisation” to proceed with the construction and operation of a primary aluminium smelter.

Appeal against the decision on environmental grounds only can be made to MEC Andre de Wet within 30 days.