Limpopo Business 2016-17 edition

SPECIAL FEATURE
Special Economic Zones
In July 2016 the national cabinet approved the
Musina-Makhado Special Economic Zone (SEZ).
Located in the far north of Limpopo in the Vhembe
region, Musina is strategically located near the border
of Zimbabwe and on the Great North Road,
which links South Africa to the broader southern
African region.
Special Economic Zones are created in terms of
the Special Economic Zones Act of 2014 (Act 16
of 2014). The act defines an SEZ as “geographically
designated areas of the country that are set aside for
specifically targeted economic activities and supported
through special arrangements and systems
that are often different from those that apply to the
rest of the country”. Lower corporate tax rates and
duty-free imports are among the advantages that
accrue to investors.
Infrastructure at an SEZ supports the specific
industry and attracts foreign investors with a strong
focus on beneficiation of local produce or materials.
Skills transfer is another stated aim behind the SEZ
programme.
The location of the Musina SEZ, with links to
Zimbabwe, Botswana and Mozambique, promotes
the Trans-Limpopo Spatial Development Initiative.
Logistics will be one of the key focus areas of the SEZ.
Other sectors that will be concentrated on include
agri-processing, energy and mineral beneficiation.
De Beers’ giant Venetia diamond mine is nearby.
The company’s most recent life-of-mine expansion
project, worth about R30-billion, will result in the
mine producing until 2046.
The national Department of Trade and Industry
(dti) is the lead agent in SEZ creation, which in turn
feeds into the national Industrial Policy Action Plan
(IPAP). SEZs are designed to attract investment,
create jobs and boost exports.
Soon after the announcement of the designation
of the SEZ, the dti said that a consortium of Chinese
investors, Sino, has agreed to put R40-billion into
the Musina SEZ where they will operate the mineral
beneficiation operations.
The first phase of this is to build a power plant.
The dti estimates that the completed SEZ could
create more than 20 000 jobs.
A second application for an SEZ at Tubatse is
pending. Tubatse is in the Sekhukhune District
Municipality and hosts a number of mining operations.
The SEZ in Tubatse will focus on the beneficiation
of platinum group metals and mining-related
manufacturing. The province of Bashkortostan in
Russia has also expressed an interest in the SEZs
of Limpopo. More details on the SEZs follows on
pages 26-31.
Infrastructure
In August 2016, Unit 6 of the Medupi power station
came on stream. The Medupi power station project
is one of the biggest engineering projects under-
25 LIMPOPO BUSINESS 2016/17