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‘Bleisure’ tourism provides exciting opportunity for South Africa

South Africa’s already developed infrastructure can provide the perfect spring board for boosting the ‘Bleisure’ industry.

Africa in its entirety was the second-fastest growing region for tourism in 2019, just a couple of percentage points behind Asia Pacific. Whilst this is an incredible achievement, the events of 2020 will likely leave last year’s figures at a little less than impressive. However, the New Year should bring hope for those in the tourism and leisure industries.

A hint of life returning back to normal should sow the seeds for South Africa’s tourism and business sectors to come together to mine an under-explored market; the ‘bleisure’ traveler.

Some encouraging statistics

In 2018 South Africa welcomed 16.4 million tourists, a figure that has only increased since 2013 and is set to reach close to 20 million by 2023. This boost in tourism numbers could see South Africa surpass Morocco as the most visited African country, in fact, when accounting for travelers from within Africa, they are already the leading country. Already South Africa has asserted itself as a premier long-haul business destination, it’s amongst the top 15 countries globally.

Finally, the World Travel and Tourism Council has shown that the travel and tourism industry in South Africa currently employs more people than the automotive and chemicals manufacturing, mining and communication services industries. All of these statistics point to a sector that is on the verge of enormous success.

The foundations are laid

South Africa is uniquely positioned to make the most of this growing interest in international travel. It boasts more chain and branded hotels than Morocco, with a staggering 430 hotels in South Africa, versus just 153. With much of the tourism infrastructure already built, the expensive work has already largely been done.

The next step is to ensure that these hotels and resorts are running at a profitable capacity, and the way to do that is to explore what travelers to South Africa want. One of the most under-exploited sectors of the international travel market is the ‘bleisure’ traveler. That is, the traveler who is visiting the country primarily for business, but intends to stay on afterwards for leisure. These travelers account for approximately 29% of tourism, no small slice of the pie.

Industries primed to cater for the ‘bleisure’ traveler

The iGaming industry

The iGaming industry has gone from strength to strength in South Africa, with the gambling industry bringing in a total turnover of R390-billion in 2018. This represents around 1% of the entire national GDP, but a much larger slice of the tourism industry of course. South African online casino sites cannot be discounted from these figures, they provide a great deal of the income. However, there is plenty of evidence to show that online casino players are far more likely to visit brick and mortar casinos than those who don’t play online. These industries should work for their mutual benefit.

Tsogo Sun is the largest iGaming company in Africa, boasting revenues of R9.8-billion in the 2019 financial year. If figures allow for stays in their resorts, food purchases and other services then this number is boosted to R11.6-billion. Their flagship enterprise Montecasino in Johannesburg brought in R2.7-billion alone. These figures suggest that the addition of casinos, or other on-site pay-to-play leisure facilities at hotels and resorts, could bring in huge extra income, particularly from the ‘bleisure’ market.

The hotel industry

Of course, the hotel industry benefits from travelers whether they’re staying for business or leisure. However, most ‘bleisure’ travelers are keen to stay on at their current hotel, for convenience’s sake, yet can be easily put off by high prices. 42% of ‘bleisure’ travelers that swap to a different hotel for the leisure part of their trip, do so because of the price.

Hotels that host business travelers should consider offering deals for longer stays, or dropping prices at weekends when occupancy is typically lower anyway. These small concessions can easily make the difference between ‘bleisure’ travelers staying for several weeks, or taking their business somewhere cheaper.

The food & drink industry

Of course, the ‘bleisure’ traveler has to eat and drink on their stay and naturally this will bring business to local restaurants and bars. Another interesting way to really capitalize on the ‘bleisure’ market is to bring the food experience to them.

Joshua Novick, vice president of business development for London & Partners, makes a valid point in saying that often ‘bleisure’ travelers don’t get a moment to get out and explore the town. Their company helped local businesses to generate some income, and ‘bleisure’ travelers to have an authentic London experience by bringing a London bus into the conference center. The visitors to the conference could pay for traditional British food from the London bus, creating a talking point and a nice break from proceedings, not to mention income for a local company.

Finding ways to incorporate the best of South Africa into the conference centre is a direct way to generate both income and excitement at once.

South Africa’s busiest rail province

Credit: Transnet

There is more freight rail traffic in Mpumalanga than in any other province. This is principally because of the transport of coal, but there are also large volumes of chrome, ferrochrome, forestry products, chemicals, liquid fuels and general freight.

The Balfour North to Volksrust section of the Gauteng to Durban mainline carries the largest volumes, most of which is long-haul freight passing through the province. The busiest internal provincial Transnet Freight Rail section is the Maputo Corridor which runs west to east from Pretoria to Maputo.

Despite these high rail volumes, a huge amount of mineral product (mainly coal) is transported by truck around and out of the province. This puts immense pressure on Mpumalanga’s roads network, particularly in the Gert Sibande District and the Nkangala District. Road improvement plans aim to simultaneously fix rural roads and make better connections between rural and urban areas.

The statistics relating to coal haulage in Mpumalanga are stupendous. In one 12-hour period, 34 198 tons of general freight were recorded for the section of the N4 highway between Nelspruit and Komatipoort. On the R50, Leandra to Standerton, the volume was 25 615 tons (Mpumalanga Department of Public Works, Roads and Transport).

Mactransco’s website states that its trucks serving Tshikondeni Coal Mine travel 3.7-million kilometres per year, working all day for six days a week.

The fleet of ABF Legend Logistics, a Super Group company, contains more than 200 super-link coal haulage trucks while another company in the group, SG Coal, claims to have one of the biggest fleets of coal haulage trucks in Africa. Coal Tipper Resources operates out of Bethal.

The South African National Roads Agency (Sanral) has presented its long-term vision, Horizon 2030, as part of its contribution to the National Development Plan 2030. Road improvements which have boosted the transport infrastructure of Mpumalanga include the upgrades to the R570 (linking Malelane on the N4 to Swaziland), the N11 (Hendrina-Middelburg) and part of the vital R573 Moloto Road, which carries huge volumes of traffic to Gauteng and Limpopo. Sanral’s three-year plan for the R573 allocates R1-billion to
the project.

A clause in Sanral’s contract ensures that small companies are involved. Raubex Construction has formed a joint venture with Biz Afrika, Khuluphala Tradings and Themolo Business Enterprise.

Transport Corridors

The R573 forms part of the Moloto Corridor, which connects the province with Gauteng Province. The long term aim is to create a coordinated road and rail corridor including rapid rail facilities. With about 50 000 motor vehicles using the route every day, it is one of the busiest parts of South Africa’s road network. The plan to upgrade the corridor is one of 18 national Strategic Infrastructure Projects (SIPs).

The first phase of the Moloto Corridor Development Programme, which involves the upgrading of road infrastructure is nearly complete. Accidents have been reduced as a result of the R3.7-billion first phase.

The Maputo Development Corridor is Africa’s most advanced spatial development initiative (SDI) comprising road and rail infrastructure, border posts, and port and terminal facilities.

Run by the Maputo Development Corridor Logistics Initiative (MCLI), the corridor runs from just outside Pretoria in Gauteng, through Witbank, Middelburg and Nelspruit in Mpumalanga, and on to Maputo in Mozambique.

Rail

An infrastructural development that should boost trade is Transnet’s planned Swaziland Rail Link (SwaziLink) project. A 146 km railway line between Lothair in Mpumalanga and Sidvokodvo in Swaziland will allow for better movement of freight between the countries and provide an alternative route for freight to Richards Bay.

Transnet Freight Rail is the main operator and the chief freight movements are coal, fuel, chemicals, timber, iron and chrome ore, fruit, maize, animal feed, wholesale and retail goods, steel, building supplies, fertiliser and consumer goods. The port of Maputo in Mozambique is an attractive option for freight. The coal terminal at Richards Bay in KwaZulu-Natal receives the majority of the coal that is mined in the province.

Private rail operators Sheltam service the coal mining and ferrochrome-metal industries from regional headquarters in Witbank. The company runs systems, hauls raw materials and rebuilds and refurbishes locomotives.

Airports

A new flight has been added to SA Airlink’s connections between Limpopo and Cape Town. In addition to the regular early-morning flights out of Nelspruit Kruger Mpumalanga International Airport (KMIA) with a late-afternoon return flight, an early morning Saturday flight has been added. This leaves Nelspruit KMIA at 7h40 and arrives in Cape Town at 10h05 and is targeted at the leisure traveller.

Nelspruit KMIA is the province’s main airport, serving both the capital and being a convenient entry point to the southern part of Kruger National Park. Airlink has direct flights to and from Johannesburg, Cape Town, Durban and Livingstone in Zimbabwe.

Hoedspruit Eastgate Airport is a popular destination for travellers on their way to private game lodges and is also near the Orpen Gate of Kruger Park. Middelburg Airfield is one of the larger alternate airports in the province, boasting a 1.9 km runway that can accommodate a 737. The annual Middelburg Air Show is held in June. Many game lodges have airstrips and helipads. SA Red Cross Air Mercy Service operates out of the old Nelspruit airport just south of the city.

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Framework in place for public and private investment in Durban Aerotropolis

Durban Aerotropolis Master Plan (Source: www.durbanaerotropolis.com)
The Durban Aerotropolis is destined to become a premier business and trade hub in Sub-Saharan Africa, on the doorstep of KwaZulu-Natal’s largest city and primary manufacturing centre, Durban.

The city of Durban is also home to Africa’s busiest seaport and the Southern Hemisphere’s biggest and best equipped container terminal, and is strategically positioned on the world’s shipping lanes.

The KwaZulu-Natal Provincial Government drives the planning of the Durban Aerotropolis in conjunction with local land owners, municipalities and other state entities.

Dube TradePort Corporation is involved in the formulation of the integrated regional spatial planning and development of the Durban Aerotropolis, which will take advantage of Dube TradePort’s prime location as home to the state-of-the-art King Shaka International Airport, the heart of the aerotropolis and a major trade and business centre for Southern Africa.

Artist’s impression (Supplied)
The following components clearly set the Durban Aerotropolis apart, affording it a distinct competitive advantage over other destinations:
  • A freight-orientated development with, at its heart, a world-class cargo facility managed by a single handler, Dube TradePort Corporation;
  • Purpose-built; and
  • One of few developments world-wide which incorporate a ‘greenfield’ site with additional surrounding land available for carefully planned and controlled expansion. The coastal situation of the Durban Aerotropolis makes logistics a cost-effective proposition.

The development, in conjunction with the airport city component, Dube TradePort SEZ, together with burgeoning seaport infrastructure, direct access to numerous global destinations and linkages to SADC countries, combine to position KwaZulu-Natal as a key business point in South and Southern Africa.

Its potential for growth into the future brings together a plethora of like-minded stakeholders whose objectives align with a shared goal: the creation of an investment climate conducive for the expansion and growth of KwaZulu-Natal’s economy through the establishment of new opportunities for the broad business environment as a result of structured and planned development.

QUICK FACTS:
  • 32 000 hectares
  • 42-million square metres of development
  • 750 000 permanent jobs
  • 1.5-million residents
  • Approximately R1-trillion potential investment
  • 10 000 hectares of green space

Ports upgrade and expand to support manufacturing and exports

The Port of Durban handles containers, automotive imports and exports, break-bulk and agricultural commodities (Credit: TNPA)

Almost a third of South Africa’s manufactured exports are produced in KwaZulu-Natal. A number of domestic and international manufacturers are either buying into the province or building new facilities in order to export finished goods.

The Mara Group’s R1-billion investment in a smartphone factory at the Dube TradePort is the latest in a string of inward investments that KwaZulu-Natal has received. This includes expenditure of more than R1.2-billion by Arçelik, the Turkish owner of Defy, at the company’s three South African plants (two of which are in the province) and R4.5-billion by Nyanza Light Metal in a titanium dioxide pigment plant at Richards Bay.

The Special Economic Zones (SEZs) at Richards Bay and King Shaka International Airport (the Dube TradePort) are key components of the strategy of attracting investors to the province. Dube TradePort attracted R7-billion between 2012 and 2019 and the same amount is expected to accompany the development of Phase 1A and Phase 1F of the Richards Bay Industrial Development Zone (RBIDZ).

Two investors in 2019 were edible oils manufacturer Wilmar Processing SA, which is investing more than R1-billion in a plant, and Elegant Afro Line, which will spend about R900-million on its chemicals plant.

There are plans to establish a clothing and textiles SEZ in the province to build on the province’s established strength in the sector and an automotive supplier park will be in operation by 2021. Toyota and Bell Equipment play a big role in the automotive sector while the Engen Oil Refinery is a strategic asset.

A solid base for future growth

The province’s existing infrastructure, good soils and fine weather provide a solid base for future growth. KwaZulu-Natal already has significant capacity in heavy and light manufacturing, agri-processing and mineral beneficiation, all of which is supported by South Africa’s two busiest ports (Richards Bay and Durban), the country’s busiest highway (the N3), a modern international airport and pipelines that carry liquids of all types to and from the economic powerhouse of the country around Johannesburg in the interior.

Sappi’s dissolving pulp mill at Umkomaas south of Durban (below) is one of the province’s most significant industrial sites as it produces huge quantities of a material that is used in viscose staple fibre, which in turn is used in clothing and textiles. Together with production volumes from Sappi’s mill in neighbouring Mpumalanga province, the company is the world’s largest manufacturer of dissolving pulp. Sugar, tourism and forestry and paper are other important sectors driving growth and employment in KwaZulu-Natal.

In his 2020 State of the Province address, Premier Sihle Zikalala listed the sectors which are to be targeted for investment in the future. These are:

  • Aloe processing
  • Bio-ethanol
  • Renewable energy
  • Fish processing
  • Innovation hubs
  • Oceans Economy

KwaZulu-Natal has a long coastline that stretches from Port Edward in the south to the iSimangaliso Wetland Park in the north. The province’s contact with the sea has brought obvious benefits: fishing, fine beaches enjoyed by millions of tourists and two great ports.

These ports export vast quantities of minerals (mostly through Richards Bay) and manufactured goods (Durban) and serve as an important conduit for imports of all sorts. The Richards Bay Coal Terminal exports massive quantities of coal while the Port of Durban is the busiest port in Africa.

Credit: TNPA

Oceans Economy

However, planners want to massively increase the economic benefits that the ocean can bring. An Oceans Economy Review Workshop has come up with a range of sub-sectors that can help grow the provincial economy and invite foreign direct investment:

  • Marine transport and manufacturing
  • Offshore oil and gas exploration
  • Aquaculture
  • Marine protection and ocean governance
  • Small harbours
  • Coastal and marine tourism

Strategies to grow the Oceans Economy dovetail with ongoing projects to boost the capacity of the province’s ports and to explore for gas and oil in the Indian Ocean. If oil rigs were to start visiting the KZN coastline on a regular basis, the ship-repair industry would grow exponentially.

The Oceans Economy is one of the focus areas that has been chosen by national government to be part of Operation Phakisa, a focused, goal-driven attempt to jump-start a specific economic sector. Overall, Phakisa intends creating a million jobs by 2033 and injecting R177-billion into national GDP.

The decision to build a cruise-ship terminal at the Port of Durban is a good example of the kind of decision that is in line with an “Oceans Economy” approach.

Photo credit: Viking Ocean Cruises, Photo by Philip Wilson

Geography

The mixed topography of the province allows for varied agriculture, animal husbandry and horticulture. The lowland area along the Indian Ocean coastline is made up of subtropical thickets and Afromontane forest. High humidity is experienced, especially in the far north, and this is a summer rainfall area. The centrally-located Midlands is on a grassland plateau among rolling hills. Temperatures generally get colder in the far west and northern reaches of the province.

The mountainous area in the west – the Drakensberg – comprises solid walls of basalt and is the source of the region’s many strongly running rivers. Regular and heavy winter snowfalls support tourist enterprises. The Lubombo mountains in the north are granite formations that run in parallel.

Regions

KwaZulu-Natal has 10 district municipalities and a metropolitan municipality, the most of any province in South Africa. In economic terms, the province offers diverse opportunities.

Southern region

This area is the province’s most populous. The city of Durban has experienced booms in sectors such as automotive, ICT, film and call centres. The promenade now reaches all the way to the harbour and the Point development will benefit. Major investments are taking place at the Port of Durban with the current centrepiece being the Durban Cruise Terminal. The Container Terminal is also undergoing an extensive overhaul.

Durban’s conference facilities are well utilised, but many opportunities still exist in chemicals and industrial chemicals, food and beverages, infrastructure development and tourism. Further south, plans are in place to upgrade Margate’s airport and Port Shepstone’s beachfront.

Western region

Also known as the Midlands, this is a fertile agricultural region which hosts the popular annual Royal Show. It produces sugar cane, fruit, animal products, forestry and dairy products. Pietermaritzburg is the provincial capital and home to a major aluminium producer along with several manufacturing concerns, including textiles, furniture, leather goods and food. The city has good transport links along the N3 national highway, excellent schools and a lively arts scene. The Midlands Meander is a popular tourist destination.

Eastern region

Although most of this area is very rural, Richards Bay is one of the country’s industrial hotspots because of its coal terminal, port and aluminium smelters. The Richards Bay Industrial Development Zone (RBIDZ) is a major economic node in itself and with the possibility of a power plant being built, the RBIDZ could become an energy hub. Mining is an important sector in this region.

The other major urban centre is Empangeni which has several educational institutions. The King Shaka International Airport is adjacent to the Dube TradePort, a Special Economic Zone (SEZ) which is attracting investors.

Northern region

The economic powerhouse is Newcastle in the north-west: coal mining, steel processing and manufacturing are major activities. Some old coal mines are being reopened by new coal companies to cater for the country’s power stations’ demand for the fuel.

Game farms, trout fishing and hiking are part of an attractive package for tourists, and Zululand is a popular destination for cultural experiences. The region is rich in Anglo-Boer War history which includes battle sites such as Islandlwana and Rorke’s Drift.

South African oil and gas is ready to compete

Image Credit: Anton Swanepoel

Significant discoveries have been made off South Africa’s south-eastern coastline by Total and its investment partners. Drilling activity such as this could be the kickstart that makes South Africa’s oil and gas sector a major player in the African market.

In successive years, Total and its partners had great news: gas condensate was found in 2019 at a site called Brulpadda off the coast of Mossel Bay and in 2020, the nearby Luiperd prospect in Block 11B/12B delivered more good results.

The block, in the Outeniqua Basin 175 km off the southern coast, covers an area of about 19 000 km² in water depths of 200 to 1800 metres. The exploration was done by the semi-submersible rig Deepsea Stavanger, which journeyed twice from Norway to lead the exploration projects.

The two finds raise the odds of Total investing in what it calls a “world-class” offshore gas site. The drilling campaign employed 195 South Africans with specialist skills but the potential spinoff is enormous if the find leads to drilling and commercialisation.

The new CEO of Petroleum Agency SA, Dr Phindile Masangane, describes the prospect of regular drilling operations off the South African coast as, “A game-changer for South Africa’s upstream oil and gas industry.”

Natural gas lies also lies offshore to the west of South Africa in the Atlantic Ocean (Ibhubesi). Block 2A of the Ibhubesi gas field north-west of Saldanha is estimated to have reserves of 850-billion cubic feet of gas.

If Total goes ahead with further investments, the PetroSA GTL refinery at Mossel Bay (Mossgas) could be revived and the idea of creating a gas market in South Africa would get a massive boost and the country’s four Special Economic Zones (SEZs) at ports would become critical to its utilisation.

Image Credit: Anton Swanepoel

A Gas Utilisation Master Plan (GUMP) is being developed as a part of national energy policy and private companies are responding to this changing environment. The major economic sectors currently using gas are the metals sector and the chemical, pulp and paper sector.

Large quantities of oil are transported around the Cape of Good Hope every year: 32.2% of West Africa’s oil and 23.7% of oil emanating from the Middle East. The long-term prospects for shipping and oil and gas have persuaded national government to pursue Operation Phakisa (with a strong maritime focus) and for Transnet National Ports Authority to spend R2.5-billion on new equipment at South Africa’s eight ports in 2019/20.

At the Richards Bay Special Economic Zone (RBSEZ) a feasibility study is being done on a gas-to-power plant and a large liquid petroleum gas import and storage terminal was recently built for Petredec by Bidvest Tank Terminals.

Petroleum Agency SA: promoting and regulating exploration and production

Petroleum Agency SA evaluates, promotes and regulates oil and gas exploration and production activities in South Africa and archives all relevant geotechnical data. The Agency acts as an advisor to the government and carries out special projects at the request of the Minister of Mineral Resources and Energy.

South Africa’s energy mix is changing to include more gas through importing liquefied natural gas (LNG), using shale gas if reserves prove commercial, and developing infrastructure for the import of LNG. Petroleum Agency SA plays an important role in developing South Africa’s gas market by attracting qualified and competent companies to explore for gas. Another major focus is increasing the inclusion of historically disadvantaged South African-owned entities in the upstream industry.

Currently, natural gas supplies just 3% of South Africa’s primary energy. A significant challenge facing the development of a major gas market is the dominance of coal. Opportunities for gas lie in the realisation of South Africa’s National Development Plan (NDP) and the Integrated Resource Plan (IRP).

As custodian, Petroleum Agency SA ensures that companies applying for gas rights are vetted to make sure they are financially qualified and technically capable, as well having a good environmental track record. Oil and gas exploration requires enormous capital outlay and can represent a risk to workers, communities and the environment. Applicants are therefore required to prove their capabilities and safety record and must carry insurance for environmental rehabilitation.

Contact details

Tel: +27 21 938 3500
Email: plu@petroleumagencysa.com
Website: www.petroleumagencysa.com

 

Mining in North West is finding more value

Impala Platinum (Implats) is a long-time investor in the North West Province and one of the world’s largest producers of platinum and palladium. The operations in Rustenburg include a multi-shaft mining complex and concentrating and smelting plants. Credit: Implats

Pilanesberg Platinum Mines created Community Crusher as a non-profit enterprise, but with 14 employees and a steady set of orders for building projects run by the company, the small business is showing the potential to become a bigger business.

Many mines run similar programmes, sourcing goods and services from local community-based companies and sometimes providing mentoring and advice on how to improve as businesses. Impala Platinum (Implats) has a programme of procurement in which it supports local business and black-owned businesses through enterprise and supplier development programmes.

Pilanesberg Platinum Mines has been active 80 km north-west of Rustenburg for just over ten years. Mining operations are conducted by contractors while PPM manages the concentrator (screen, crush, mill, float, thicken and dry). The operation has annually achieved an average of about 150 000 ounces of platinum group metal (PGM) concentrate.

The Provincial Government of the North West is in talks with several mining companies in the Matlosana Local Municipality area (which includes Klerksdorp and Orkney) as some mines are being closed down. One of the initiatives to extract more value from mining is the proposed Platinum Valley Special Economic Zone. Creating a base for companies to supply the mining industry is one of the key drivers behind the scheme.

The SEZ is intended for Mogwase in the Bojanala District, north of Rustenburg and east of Sun City. When fully developed, 200 ha of land will be taken up by three infrastructure facilities comprising Logistics, Light Manufacturing and Heavy Manufacturing.

The Seda Platinum Incubator (SPI) is an initiative of the Platinum Trust of South Africa and is funded by the Small Enterprise Development Agency (Seda) through its Seda Technology Programme (Stp) with the support of the North West Provincial Government and private companies.

North West mining news

Several mining companies are investigating energy – both in order to power their own operations because of the risk of the national utility failing to supply electricity, and to find new uses for platinum.

Bushveld Minerals has two arms; Bushveld Vanadium and Bushveld Energy which is working on Vanadium Redox Flow Batteries (VRFB). Energy storage is the focus of much research across the globe and Bushveld Energy intends its solar installation at its Vametco mine, supported by VRFB, to answer many questions. Bushveld Vanadium is one of three vanadium producers in the world.

Credit: Bushveld Minerals

Sibanye-Stillwater has renamed the mining operation it bought from Lonmin in 2019,
Marikana. The sale was comple-ted in June 2019. This is Sibanye-Stillwater’s second major purchase of platinum assets in the North West, after buying Anglo American’s Rustenburg Platinum Mines Limited.

Between the fourth quarter of 2018 and the fourth quarter of 2019 the global price of platinum slumped, but a later surge in the price of other PGMs such as palladium and rhodium offset this downturn. The fact that the mining industry continued to operate through most of the lockdown that accompanied the Covid-19 outbreak helped to bring some stability back to the sector.

In early 2020 rhodium rose to its highest price since 2008, $8 200/oz, and palladium ach-ieved a new record high of nearly $2 150/oz. Some mining companies discovered that several of the other minerals that are present in their mines (gold, copper and nickel) were surging in price, causing them to investigate ramping up operations.

Some companies chose to sell assets while others have undergone major restructuring. Impala Platinum will spend R2.7-billion over two years to scale down production from 11 shafts to six lower-cost, profitable, shafts. In FY2018 Impala produced 580 800 ounces of refined platinum. Impala Refinery Services (IRS) smelts and refines concentrate and matte and recycles auto catalysts.

The mining sector still makes a big contribution to provincial GDP although that percentage is now below 30%. About 18% of total employment in the province is in mining.

North West mineral resources

The North West Province is aligned with the Western Limb of the Bushveld Igneous Complex, a remarkably rich minerals formation. Mines in the province produce 50% of the platinum produced in the world, and 65% of South Africa’s PGMs. Chromite is the other major mineral mined throughout the province, and there are several ferrochrome smelters and other processing plants.

South Africa produces about 70% of the world’s chrome. Gold and uranium are found along the border of the province with Gauteng and the Free State (in Klerksdorp and Orkney). Diamonds are mined at Christiana, Bloemhof and Lichtenburg. Other minerals include fluorspar, vanadium, rhodium, uranium, copper, limestone, slate, phosphate, manganese, coal and nickel. Limestone quarries run by G&W Base and Industrial Minerals in the Marico District are located next to a PPC cement factory.

One of the last economically viable limestone deposits in South Africa is mined and processed by Sephaku Cement. Sephaku runs a 6 000-ton-per-day clinker plant near Lichtenburg. AfriSam, PPC and Lafarge are active in the Mahikeng/Lichtenburg area, but Sephaku is confident that its clinker and cement-production facilities will be supported by raw materials for at least 30 years. AfriSam has taken measures to reduce carbon emissions at its Dudfield cement plant.

U.S and Western Cape trade and investment partnership launched

On 5 February 2021, the U.S. Consulate General in Cape Town and the Western Cape government jointly launched a Trade and Investment Promotion Partnership which will build on the momentum of the existing economic relationship to promote shared prosperity and economic development.

At the launch event, Western Cape Minister of Finance and Economic Opportunities, David Maynier, and U.S. Acting Consul General in Cape Town, Will Stevens, pledged to deepen cooperation and coordination to promote and increase bilateral trade and investment through various engagements, events, and high-level interactions.

The partnership will leverage the decades of innovative trade and investment promotion through the Western Cape’s agencies such as Wesgro, and the services, resources, and expertise of 17 U.S. government agencies to support U.S. and African businesses, and the African Growth and Opportunity Act (AGOA), which allows duty-free exports of more than 6,500 goods from Africa to the United States.

Speaking at the launch, Minister Maynier said, “The United States is a key tourism and business market for the Western Cape, and the biggest source of foreign direct investment for the Western Cape, so I am excited about the potential for further investment and economic growth for both regions through the Trade and Investment Promotion Partnership.”

Acting Consul General Stevens said, “The trade and investment promotion partnership builds on our strong relationship with the Western Cape and the U.S. government’s commitment to increasing our already robust trade and investment. The partnership also reflects the U.S. private sector’s increasing interest in investing in the Western Cape and the potential for further expanding bilateral trade.”

The economic relationship between the United States and the Western Cape is robust and growing. The Western Cape’s diverse and dynamic economy attracts investment from U.S. companies—big and small—and the United States has been the top foreign direct investor in the Western Cape for many years. U.S. companies have invested in the province, have created tens of thousands of jobs, offer training and skills development, and support local communities through outreach and humanitarian programs in the Western Cape.

Bilateral trade between the United States and the Western Cape is increasing. Over the last 20 years, trade has risen by 335 percent and is currently valued at approximately 17 billion Rand annually. In 2020, bilateral trade grew despite the COVID-19 pandemic. This growth included a 68 percent increase in citrus exports and a 78 percent increase in wine exports to the United States. Hundreds of companies in the Western Cape export to the United States as part of this reciprocal trade. Western Cape companies are also setting up operations in the United States or forming commercial partnerships with U.S. companies.

Download the United States and Western Cape Trade and Investment Partnership Fact Sheet

Putting North West on the road to growth

The R512 Pampoennek Road. Credit: SANRAL

Two major transport projects in the North West will create conditions for better mobility to and from the province and within its principal city. The South African National Roads Agency Limited (SANRAL) opened the R512 Pampoennek road in September 2020 and the elements of the Rustenburg Rapid Transport scheme are coming together to promise enhanced movement around the province’s most populated urban centre.

The R512 connects the towns of Brits in the North West and Randburg in Gauteng via Hartbeespoort, providing a good connection to the N4 highway. The cost of the road project through Pampoennek was R377-million and the road was opened by Transport Minister Fikile Mbalula.

“This road gives expression to the notion that transport is the heartbeat of the South African economy, playing an integral part in the country’s economic growth. Roads are an essential part of South Africa’s transport system and are important infrastructure to enable economic activity and access to social amenities,” said Mbalula at the ceremony.

Skhumbuzo Macozoma, CEO of SANRAL (left), and Fikile Mbalula, the Minister of Transport, celebrate the opening of the Pampoennek Road in the North West.

SANRAL is currently working on other roads in the North West, including the N14 and N12 highways. SANRAL’s Horizon 2030 strategy aims to ensure that local communities benefit when roads are built in their areas. Construction of the Pampoennek route generated 209 permanent jobs for locals with R27.4-million spent by August 2020. About 180 people were offered training and 12 subcontractors were employed on the project.

Moving Rustenburg

Rustenburg is one of the fastest-growing cities in South Africa. With a population of more than 500 000, city planners have turned their attention to improving the quality of life for commuters through an integrated and intelligent public transport system.

Rustenburg Rapid Transport (RRT) aims to manage and allocate road space more efficiently, to reduce the number of vehicles on the road and ultimately to provide a better user experience for people using public transport and for people working and walking in the inner city.

Bus Rapid Transit (BRT) is one of the elements of the RRT system. There are two main BRT corridors where passenger volumes are high. The corridors will have dedicated bus lanes with walkways and stations which allow for easy access.

The RRT system is designed to cater for up to 75 000 commuters daily when operating at full capacity. Construction of the RRT project’s road network has begun and various other projects have been undertaken related to the project, including traffic lane upgrades and the installation of dedicated traffic lights and signals. Cycle lanes and walkways for cyclists and pedestrians have been constructed to complement the RRT system.

In June 2020, the Rustenburg Local Munici-pality welcomed the first Yarona Bus at a session held at the Rustenburg Civic Centre. The RRT project will begin with a testing and training phase and the first bus will be used by the Rustenburg Rapid Transport team to train drivers, and test various infrastructure components including stations and priority traffic lights in a build-up to the main launch.

The Rustenburg Rapid Transport programme forms part of the road-based component of the national Bus Rapid Transport Strategy, overseen by the National Department of Transport. Its goal is to ensure swift movement of large numbers of people between parts of a city in a quick and safer way.

The local taxi industry has been working closely on the programme and affected taxi operators will create and run a bus-operating company (BOC). Several milestones have already been reached in this sphere, namely the creation of Taxi Negotiating Forum and the signing of a Memorandum of Agreement.

There are further plans for public transport to become more integrated in the future. This might involve co-branding and a single fare system.

On the topic of regulation, Executive Mayor Mpho Khunou says that a “fully-fledged transport entity” is being discussed for the future. “As things stand, the only people who will participate in this new system are going to be those who are affected,” says Khunou.

“The idea moving forward is to involve other parts of the industry, then you can then regulate all forms of transport in the city. That is something we are looking in to that will happen a bit further into the future.”

 

Spatial planning is at the heart of plans to expand the economy of the North West

Credit: Sun City

Development corridors, a proposed Special Economic Zone (SEZ), industrial parks and agri-parks with differentiated focus areas are among the interventions planned to stimulate the regional economy and create employment opportunities.

The North West Department of Economic Development, Environment, Conservation and Tourism (DEDECT) has committed to entering partnerships with the Automobile Industry Development Council (AIDC) and the Industrial Development Corporation (IDC) to revive industrial parks in the province and create industries that will target niche markets.

The creation of district agri-parks is intended to boost primary production which in turn will increase the amount of raw material that can be processed. Companies making car seats within the province’s active automotive parts sector would be a ready market for treated hides from the huge provincial cattle herd.

The province’s strategic location goes beyond the obvious benefit of its proximity to the province of Gauteng: the major roads linking trade on an east-west axis pass through the province, as does the major railway line which runs from Cape Town in the south to Zimbabwe and beyond in the north. These advantages will be enhanced by four Provincial Strategic Development Corridors, two of which are:

The Eco-Tourism Corridor, Bojanala District. This corridor extends beyond the tourism sector (which includes the Hartbeespoort Dam to Sun City, game lodges and game reserves) and will be supported by the Platinum Valley Special Economic Zone, the automotive industry in the Madibeng area and the mining opportunities that occur throughout the district.

The proposed PVSEZ in the Mogwase Indust-rial Area will be designed to create space for
enterprises which supply the mining industry. Other targeted sectors are capital equipment manufacturing, renewable energy, agro-processing and general manufacturing. Discussions are underway with the National Department of Trade, Industry and Competition (dtic) for the licensing and commissioning of the SEZ.

The N12 corridor in the Dr Kenneth Kaunda District. By promoting residential and commercial activity along this route, it is intended to integrate the economies of the towns of Matlosana and Tlokwe. Private developers are thinking of regional links for their new development in Vryburg, which is at the intersection of the N14 highway (Johannesburg-Upington) and the N18 highway which connects Kimberley to Mahikeng. Twin City Development and Vuno Developments are spending R290-million on the town’s first retail mall, which will serve as a regional attraction. Twin City Development is partnering with the Moolman Group in the construction of the new Rustenburg Mall.

Spatial thinking requires infrastructure to underpin it. In 2020 the North West Department of Public Works and Roads was busy with 13 road construction projects valued at R900-million.

New roads such as this link to the North West from Gauteng are important parts of infrastructural development. Credit: SANRAL

North West Provincial Economy: Overview

Geography and economy

The North West is bordered on the west by the Republic of Botswana and on the east by Gauteng, the engine of the South African economy.

The North West province makes up 6.8% of the population of South Africa (3.6-million), 8.7% of the land mass (105 076 km²) and accounts for 5.8% of economic output in terms of gross value added.

The Vaal River runs along the province’s south-eastern border with the Free State, and the province also shares borders with the Northern Cape to the south and Limpopo in the north.

The mineral reserves in the province are enormous. Platinum group metals (PGMs) predominate but there are significant deposits of gold, uranium, diamonds, copper, vanadium, fluorspar and nickel. Stone and limestone are also found in large quantities. Mining beneficiation takes place at many places, with Rustenburg being particularly strong in this sector. The economy of the town is closely linked to the fortunes of platinum mining, with the sector contributing about 70% of the city’s gross geographic product.

Automotive components firms are clustered in Brits, which in turn is close to the automotive manufacturing hub of Rosslyn (Pretoria) in Gauteng. Towns like Klerksdorp (agro-processing and engineering) and Potchefstroom (food and beverages) also have manufacturing capacity.

The North West is a major producer of maize and sunflower seeds and many other agricultural products. About 20% of South Africa’s maize comes from the province, as does 15% of its wheat. The dry western part of the province is home to beef cattle, game ranching and hunting. The normally well-watered eastern and north-eastern regions carry varied crops, many of which are sold in Johannesburg and Pretoria.

The agricultural sector also generates large-scale storage and logistics operations, particularly in Klerksdorp, Vryburg and Brits, together with a number of agro-processing plants. Senwes is one of the biggest with extensive silo infrastructure while Suidwes has 17 retail outlets and MGK makes full-fat soy at its manufacturing plant. Lichtenburg-based NWK makes liquid fertiliser and animal feed, processes sunflower seeds and runs 37 silos and three grain mills.

The province’s three Technical and Vocational Education and Training (TVET) colleges and the well-respected North-West University all have several campuses catering to a wide range of educational disciplines. The university has a strong reputation as a research institution.

Major towns

The capital city of the North West Province, Mahikeng, lies on the banks of the Molopo River. Situated in the north-west sector of the province near the Botswana border, the city has a strong services sector and a population of approximately 300 000.

The city’s main sectors are financial services, services, transport and trade. The Garona District houses the North West parliament and government buildings. The arts are promoted by the Mmabana Cultural Centre, while the North West Institute of Hotel and Tourism Management is one of three tertiary institutions in the city.

North-West University’s Graduate School of Business and Government Leadership is located in the city, and Unisa has a presence. Other institutions are the Taletso TVET College and the International School of South Africa.

The town is well served by hotels such as the Mmabatho Palms, Hotel and Casino Convention Resort. White rhino and giraffe can be found at the Mahikeng Game Reserve.

The city of Potchefstroom is administered by the Tlokwe Local Municipality. A large campus of North-West University and its business school is located in the city, as is the Vuselela TVET College and the Potchefstroom College of Agriculture. More than 120 000 people regularly attend the annual Aardklop Festival. The city has a population of about 173 000. The sports facilities of North-West University are world class and have been the base for Spain’s soccer team and Australia’s cricket team in world cups. Tlokwe is a hub for the strong commercial agriculture of the region and has several food and beverage manufacturers including Nestlé.

Some of the bigger enterprises include fertiliser companies such as Kynoch, munitions manufacturers, and food processors like King Food. An army base contributes to the economy, and the airfield formerly used by the military is now run by the municipality.

The N12 Treasure Route passes through the city and holds potential for further development of tourist highlights such as Boskop Dam and the Mooi River on which the town is located.

Rustenburg is a local municipality within the Bojanala Platinum District Municipality and the headquarters of both bodies are in the city of about 625 000 residents.

Rustenburg straddles the N4 “Platinum Highway” about 120 km west of the cities of Pretoria and Johannesburg in the Gauteng Province, the economic hub of South Africa. The N4 stretches across South Africa from Mozambique in the east, to the Botswana border in the west and, as the Trans Kalahari Route, ultimately to Namibia.

At the foot of the Magaliesberg Mountain Range, Rustenburg is only 50 km from one of the country’s premier tourist resorts, Sun City, which in turn is adjacent to the 550 km² Pilanesberg National Park and Game Reserve which has a small airport.

Orbit TVET College has a campus in Rustenburg, Unisa has a regional office and the Agricultural Research Institute’s Industrial Crops Division is also located in the city.

The Royal Bafokeng Sports Palace hosted five group matches in the 2010 World Cup. Platinum mining began in 1929 and has driven the city’s growth ever since.

 

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