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On the opening day of the 5th BRICS Summit held in KZN the Chief Executive Officer of the National Empowerment Fund (NEF) Ms. Philisiwe Mthethwa who also sits as a member of the board of trustees for the Industrial Development Corporation (IDC), while speaking alongside the joint-CEO of Standard Bank Group Mr Sim Tshabalala, invited BRICS member countries to partner with South Africa and Africa at large in its infrastructure development and industrialization. This is in line with the pledge made at the 2011 summit in Sanya China, where leaders of the BRICS countries pledged their commitment to Africa’s industrialization.
Ms. Philisiwe Mthethwa outlined opportunities valued at more than R33 billion which is equivalent to US$ 3,5 billion. She further stated that within the NEF these are deals that have been created to seek competitive opportunity for the South African economy and the inclusion of black participation in opportunities during early stages of projects as opposed to participating during equity closure.
Ms. Mthethwa reiterated that such investments hold lucrative opportunities for foreign direct investment (FDI). It is projected that these investments will yield between 150 000 to 200 000 decent jobs.
In accordance with the countries macroeconomic policy, the NEF uses a sector-targeted approach in developing its portfolio, these sectors include mining, mineral beneficiation, agro-processing, tourism, renewable energy, business process outsourcing and infrastructure projects.
Among the opportunities enlisted by Ms. Mthethwa, is the Rare Metals Industries (RMI) project valued at R15 billion (US$1,6 billion) which is an investment that will result in the establishment of the first integrated specialty metals beneficiation complex, producing, Zirconium, Hanium, and Silicon.
According to Ms. Mthethwa 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 tons of Titanium, 2,000 tons of Zicornium, 8,000 tons of Silicon, 50,000 tons of magnesium and is expected to generate annual revenue in excess of US$2bn. This plant will enable South Africa and its BRICS partners to create downstream beneficiation clusters.
“Within Telecommunications and Broadband, is a project valued at US$97 million (R900 million). This project aims to deploy Last Mile Fibre Optic cables across the national landscape of South Africa. The infrastructure that will be deployed is 4 times faster at less than half the cost of normal fibre.
“An initial capital investment of US$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,” says Ms Mthethwa.
She added that the IDC has a total value of transactions under consideration worth R53 billion, which is equivalent to $US5,7 billion. These include FibreCo, which is a joint venture between Cell C, Convergence Partners and Dimension Data, and looks to build a long-haul open access fibre optic network.
The network will connect both the major commercial centres, rural and underserviced areas along its route, and will ultimately result in the creation of over 2 500 direct and indirect job opportunities across the country through the construction and into the operations and maintenance periods.
A Chinese company, ZTE, will be the primary subcontractor for phase 1 of the project and is likely to continue into phase 2. Funding from Chinese sources is also being considered to assist in replacing the phase 1 vendor finance with funding also being sought to fund phase 2. The funding of the project is estimated at R2.4 billion.
Another IDC project is a R2 billion project to produce bioethanol in the Eastern Cape, the project is expected to construct a 100 million liters per annum bioethanol production plant, utilizing 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,” says Ms Mthethwa.
Four Summits have been held so far; the first in Yekaterinburg, Russia, on June 16, 2009; second in Brasilia on 15 April 2010, the third in Sanya, China on 14 April 2011 and the fourth in New Delhi, India on 29 March 2012. BRICS Leaders have also met on the sidelines of other multilateral meetings. South Africa has 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.
Security has been tightened around the venue, with 3 000 law enforcement officers deployed in Durban for the duration of the event. More than 5 000 delegates are expected to attend the summit, which South Africa hosts for the first time since joining the group of emerging economies in 2010.