Business / 20 April 2019, 09:00am / Network Reporter
DURBAN - The recent announcement of Richards Bay Minerals’ (RBM) R6.5billion investment is expected to have a substantial positive impact on the economy of the province.
Last week, Rio Tinto, the international holding company for RBM, announced it had approved the next stage in the development of RBM in South Africa through the construction of the Zulti South project.
The company said the investment would sustain RBM’s capacity and extend mine life.
RBM operates four mines in the Zulti North lease area, a mineral separation plant and smelting facility. The Zulti North orebody grade is declining, so the Zulti South mine is required to maintain the output of high-margin zircon and rutile, and provide ore to support TiO2 sales.
The Zulti South mine (Phase 1) will underpin RBM’s supply of zircon and ilmenite over the life of mine.
Construction is scheduled to start in mid-2019, subject to the granting of all necessary permits, with first commercial production expected in late 2021.
Rio Tinto chief executive J-S Jacques said: “Rio Tinto has a long history in South Africa, and today's investment underscores our commitment for the coming decades and beyond. Zulti South is one of the best undeveloped minerals sand deposits in the industry, and will significantly extend RBM’s position as a world-class, first-quartile asset.”
Rio Tinto Energy & Minerals chief executive Bold Baatar said the company's investment in Zulti South would ensure it maintained its contribution to the province and partner communities.
“We want to recognise the support from the government of South Africa, the KwaZulu-Natal provincial leadership and, most importantly, the invaluable support of our host communities - Mbonambi, Sokhulu, Mkhwanazi and Dube - in securing the future of this world-class business.”
Durban-based economist Bonke Dumisa said the investment was “very significant” as the country needed as much investment flow as it could it get.
He added that any investment should follow the proper planning and approvals and lead to job creation.
KwaZulu-Natal MEC for Economic Development, Tourism and Environmental Affairs Sihle Zikalala said it was encouraging that more business organisations such as RBM continued to express their commitment to the growth of the provincial economy.
“The investment by RBM is a major vote of confidence in the Richards Bay Industrial Development Zone, one of our two special economic zones that have attracted R11.9bn of investments since its inception a few years ago,” said Zikalala.
He said companies were investing in KZN because government had created a conducive environment for businesses.
“We call on the people of KZN to continue working with us in ensuring that we make investors feel that this is a province where they can come and settle.”
He said KZN was targeting business prospects worth more than R200bn, which was announced when the province launched its investment booklet recently.
Minister of Mineral Resources Gwede Mantashe also welcomed the RBM investment announcement.
“The investment is an affirmation of South Africa’s attractiveness as an investment destination. It confirms South Africa's stable and predictable policy and regulatory environment,” he said.