South Africa’s newest deep-water harbour, Ngqura, was poised to integrate the Eastern Cape into South Africa’s key resources sector and thereby incorporate it into the mainstream economy of the country, President Jacob Zuma said on Friday.

Transnet, which built the R10-billion greenfield harbour, was moving ahead with a plan to relocate the existing manganese terminal from Port Elizabeth to Ngqura by 2016, and had also made a decision to direct all future manganese exports through the new Eastern Cape port, rather than through Saldanha Bay.

Public Enterprises Minister Malusi Gigaba, who accompanied Zuma to the official launch of the harbour, said the decision to create manganese export capacity at Ngqura was final, despite the unhappiness being expressed by manganese exporters, which believe Saldanha would offer a more cost-effective route to market.

Gigaba added that the onus was on Transnet to engage with the industry so as to communicate the rationale for the decision and prove to them that they would not be prejudiced by the move to open a south-eastern mineral-export corridor.

This view was strongly supported by Eastern Cape Premier Noxolo Kiviet, who argued that the province was keen to emerge as a new mineral "gateway", despite limited mining activity in the province itself.

She told Engineering News Online that those opposed to the diversion of manganese exports through Ngqura would not remain "unhappy for long" once they became aware of the benefits.

She also pointed out that the province was keen for the coal terminal being proposed for East London to move ahead, arguing that it would be implemented in such a way that it could not contaminate the automotive products already produced in the area.

Gigaba added that, once the rail and port infrastructure was in place to facilitate the development of a manganese export terminal at Ngqura, there would be an opportunity to build a new car terminal in Port Elizabeth and release additional property for leisure and tourism in the city.

The plan also involved an incremental increase in the exported volumes of manganese from around five-million tons a year currently to over 20-million tons.

Transnet Freight Rail CE Siyabonga Gama told Engineering News Online a model had been developed whereby the volumes would increase in stages, with the rail link to the Eastern Cape being reinforced to allow it to operate on heavy-haul principles. However, the initial volumes would not be sufficient to justify a full-blown heavy-haul line.

Gama said engagements were under way with the manganese industry and gave the assurance that the prevailing efficiency and tariff fears were misplaced.

Transnet CE Brian Molefe indicated that the mineral export programmes formed part of the group’s R300-billion investment programme between now and 2019. He also stressed the capital investment plan could be funded by a combination of internal resources (R200-billion) and local and foreign borrowings (R100-billion).

Addressing the formal function, Zuma also said the Presidential Infrastructure Coordination Commission, or PICC, would not only oversee infrastructure roll-out, but also seek to actively divert capital from the tertiary sector to the primary and secondary sectors, such as agriculture, mining and manufacturing.

In an earlier address to businesspeople in Port Elizabeth, Zuma said government wanted the whole country to be turned into a "huge construction site" to help unlock the natural resources of the country and build the economy.

This would involve government playing an "active" role in the economy and in facilitating strategic projects that could "get South Africa working, growing and moving".

Transnet chairperson Mafika Mkwanazi indicated that the Ngqura port itself had been implemented as a strategic project.

It had proceeded on the basis of a "five line" shareholder instruction to Transnet signed by then Deputy President Zuma in the late 1990s.

The investment could not have been justified by economics alone and the instruction, which had been based on a desire to support the development of the Eastern Cape, had been critical to the project decision.

Mkwanazi also indicated that Transnet stood ready to participate in future strategic projects and would use its experience as a freight logistics utility to ensure these were turned to economic and development account, as had been the case at the Port of Richards Bay, in KwaZulu-Natal.

By: Terence Creamer
Edited by: Creamer Media Reporter