Investment opportunities for fellow Brics nations in infrastructure development and industrialisation in South Africa were valued at over R33-billion, or $3.5-billion, National Empowerment Fund (NEF) CEO Philisiwe Mthethwa told delegates on the opening day of the fifth yearly Brics Summit, in Durban, on Tuesday.

This was the result of several “deals” created by the NEF to seek competitive opportunities for the South African economy and ensure black participation in the early stages of projects, as opposed to during equity closure.

Mthethwa, who also sat as a member of the board of trustees for the Industrial Development Corporation (IDC), projected that these investments would yield between 150 000 and 200 000 decent jobs.

“Investment in the country would be in line with the pledge made at the 2011 Brics summit in Sanya, China, where leaders of the Brics countries pledged their commitment to Africa’s industrialisation,” she stressed.

In accordance with the country’s macroeconomic policy, the NEF used a sector-targeted approach in developing its portfolio, which included the mining, mineral beneficiation, agroprocessing, tourism, renewable-energy, business process outsourcing and infrastructure industries.

Rare Metals

Among the opportunities referenced by Mthethwa were an investment in the Rare Metals Industries (RMI) project, which was valued at $1.6-billion, which would result in the establishment of the first integrated speciality metals beneficiation complex to produce zirconium, hafnium and silicon.

“South Africa is the world’s largest producer of titanium slag, but does not manufacture titanium metal or titanium components.

“At full operational capacity, the plant will produce 5 000 t of titanium, 2 000 t of zirconium, 8 000 t of silicon and 50 000 t of magnesium and is expected to generate yearly revenue in excess of $2-billion,” she said, adding that the plant would enable South Africa and its Brics partners to create downstream beneficiation clusters.

Telecommunications
In the telecommunications and broadband sector, a project valued at $97-million aimed to deploy last-mile fibre-optic cables across the national landscape of South Africa.

The infrastructure deployed was four times faster at less than half the cost of normal fibre infrastructure.

“An initial capital investment of $33-million will lead to the establishment of a South African last-mile fibre-optic infrastructure company, LinkAfrica. The project will increase broadband access, thus having a huge impact on the liberalisation of broadband access in South Africa,” Mthethwa said.

Moreover, she added that the IDC had transactions under consideration worth $5.7-billion, which included FibreCo, a joint venture between Cell C, Convergence Partners and Dimension Data, and which was rolling out a long-haul open-access fibre-optic network.

The network would connect the major commercial centres, as well as the rural and underserviced areas along its route, and would, ultimately, result in the creation of over 2 500 direct and indirect job opportunities across the country through the construction and operations and maintenance periods.

Chinese company ZTE would be the primary subcontractor for Phase 1 of the project, while funding from Chinese sources was being considered to assist in replacing the Phase 1 vendor finance with funding also being sought to fund Phase 2.

The required funding for the project was estimated at R2.4-billion.

Biofuel
Another IDC opportunity was a R2-billion project to produce bioethanol in the Eastern Cape, which would involve the construction of a 100-million-litre-a-year bioethanol production plant using grain sorghum as feedstock.

"This will be the first significant production facility for biofuels in the country and will create jobs for 3 200 people during the construction and operational phases. The IDC will be looking for an equity partner in due course,” Mthethwa said. 

South Africa had a direct interest in extending Brics cooperation to support Africa’s development agenda, particularly by increasing financial aid to build infrastructure and industrial capacity, and increasing imports of value-added manufactured products from the continent.