Companies / 12 November 2014, 10:05am / Moloko Moloto.
Johannesburg - A R39 billion power station to help ease South Africa’s energy demand is expected to be built in Limpopo.
Premier Stan Mathabatha revealed this in an interview with The Star along with the news that a deal was clinched during his two-week trip to China recently.
The planned power station is set to be the fifth operating from Limpopo.
It will supply electricity to new industry in Limpopo that is in the planning phase.
Eskom operates the coal-fired Matimba power station, a 3 990 megawatt plant, at Lephalale – the same area where the Medupi power station is being built.,
Two privately operated photovoltaic power stations, the Soutpan Solar Park and the Witkop Solar Park, each produce less than 30MW.
Mathabatha said the Limpopo Economic Development Agency (Leda), which is a provincial state entity, and Chinese corporation Hong Kong Mining Exchange Company had entered into the deal.
The premier said Leda was better positioned to elaborate on specific details regarding the agreement.
He said its economic spin-offs would trickle down to ordinary people.
“That project has the capacity to employ 19 000 people; it’s going to be in the vicinity of Musina,” said Mathabatha.
Leda managing director Lesley Masia said the power station would supply electricity to plants that processed mineral resources into finished metal products.
He said there had not been any discussions for the new power station to supply electricity to Eskom for the national grid.
He believed the new power station would help reduce electricity costs and guarantee a secure power supply for the envisioned metal plants.
Masia said the province would not spend a cent on the power station even though it would hold an equity stake that was yet to be determined.
“We will use coal to generate electricity for the metallurgical cluster project. The only difference is the deployment of modern technology that will result in less carbon emission.”
Masia said the metallurgical cluster was an assortment of mineral processing plants that transformed resources into beneficiated products.
“It is premised on alloy plants that process resources at various stages into different finished products that will then be exported.”
Masia said the beneficiating plants would be created through a joint venture with the investors based on technical, financial and managerial collaboration.
Mathabatha tried to allay fears that the Chinese were interested only in taking profits out of the country.
He cited the Dilokong chrome mine deal struck between the Beijing-based Sinosteel Corporation and Leda’s predecessor, the Limpopo Development Agency (Limdev), as an example of the cordial relations between the province and China.
“Limdev then came into the picture with a dormant mine that was not working, which did not have facilities. The Chinese came with all the capital and we then demanded that we take 40 percent (ownership), with the intention of increasing it to 49 percent, despite the fact that we did not have capital.”
Mathabatha said the Chinese mission also attracted a separate R2bn deal from the Jidong Development Group to augment the R1.6bn Mamba cement manufacturing project under way in Thabazimbi.
Jidong is the majority shareholder in the Mamba cement project.
Other equity holders include the China Africa Development Fund and two South African firms, Women Investment Portfolio Holdings Limited (Wiphold) and Continental Cement (Conticem).
“On that project alone, 100 artisans will be sent to China for training. We will not be importing labour from China, only scarce skills,” said Mathabatha.