Content

Operator Permit to the SAEMSEZ

 Introduction of South Africa Energy
Metallurgy Special Economic Zone

South Africa Energy Metallurgy Special Economic Limpopo river is 30km away from the project site,
Zone (hereinafter referred as “SEZ") is a national which is the important water source for projects in
special economic zone for energy and metallurgy SEZ.
founded according to the law of Special Economic
Zone passed through the legislation of South Africa Projects in SEZ : There will be built 20 million ton coal
parliament and the approval of Government of South washery, 3,000 MW thermal power plant, 5.1 million
Africa, and enjoys the tax benefits of South Africa ton coking plant, 3 million ton steel plant, 3 million ton
National Special Economic Zone and all preferential stainless steel plant, 1 million ton ferromanganese
treatments of foreign investment policy encouraged plant, 3 million ton ferrochrome plant, 450 thousand
by South Africa. South Africa Department of Trade and ton silicomanganese plant, 300 thousand ton
Industry authorizes and issues the operation license Ferrosilicon plant, 450 thousand ton limestone plant.
to Shenzhen Hoimor Resource Holding Co., Ltd. in In SEZ, there will be built supporting government
SEZ, to invest, develop, operate and manage the administration service centers (business
South Africa Energy Metallurgy Special Economic administration, customs, tax administration and other
Zone. SEZ is located in Musina, Limpopo, South functions), employee's living quarters service center
Africa, it covers an area of 60km2, and adjacent to the (dormitory, hotel, shopping mall, hospital and others)
boundary of Zimbabwe and Mozambique, and the and comprehensive logistics service center of
large Coking-Coal open pit mining area in central highway, railway and sea transportation (provide the
Limpopo. This area has more than 12 billion ton whole-course point-to-point nonstop logistics service
coking coal, and has rich iron and steel raw materials- for the project).
mining resources within 200km, including 3 billion ton
iron ore, 1.2 billion ton Chrome ore, 800 million ton
manganese ore, 1 billion ton silicon ore, 500 million
ton nickel ore, 5 billion ton limestone act.. The
national railway, expressway and power supply
network penetrate through SEZ. SEZ has a distance of
500km away from large port of Maputo.
 Introduction of South Africa Energy
Metallurgy Special Economic Zone

In SEZ there will be built mining resource supply Metallurgy projects in SEZ such as Iron making
center to provide the mining resources such as plant, ferroalloy plant, steel plant, stainless steel
various furnace charges for the project plants in plant act. will open to the investors globally, to
SEZ. The integration advantages of energy and introduce the best strategic investors for the
metallurgy of SEZ projects are: Energy and project. We sincerely invite friends from common
metallurgy production through-train process of industries to visit South Africa Energy Metallurgy
coking coal mine → coal washery→ coking plant Special Economic Zone. We are looking forward to
→ power plant→ ferroalloy plant→ iron making work with industrial friends with complementary
plant→ steel plant; the iron and ferroalloy melt advantages, seeking mutual development, to build
are hot delivered for the steelmaking, thereby the most competitive global Energy Metallurgy
greatly reducing the energy consumption of Special Economic Zone.
metallurgy process. The advantage of such
vertical full flow metallurgy process is unique and
richly endowed by nature. South Africa Energy
Metallurgy Special Economic Zone Management
Co., Ltd. provides to the project investors with all
preferential policies, guaranteed and competitive
resource supply and supporting service facilities.
SEZ has mining resources of various metallurgy
raw materials, land and water resources, power
plant, coke chemical plant, sewage treatment plant
and other infrastructures.
 Site selection of South Africa Energy
Metallurgy Special Economic Zone

Traffic location map of South Africa Energy Metallurgy Special Economic Zone
 Site selection of South Africa Energy
Metallurgy Special Economic Zone

Planned surface map of South Africa Energy Metallurgy

Special Economic Zone
Planning points of South Africa Energy Metallurgy
Special Economic Zone
Planning Highlights of South Africa Energy Metallurgy
Special Economic Zone
Planning points of South Africa Energy Metallurgy
Special Economic Zone
 Description for planning and design scheme of project in South Africa
Energy Metallurgy Special Economic Zone

Description for planning and design scheme of project in South

Africa Special Economic Zone for Energy and Metallurgy
Description for planning and design scheme of project in South Africa
Energy Metallurgy Special Economic Zone
Description for planning and design scheme of project in South Africa
Energy Metallurgy Special Economic Zone
Description for planning and design scheme of project in South
Africa Energy Metallurgy Special Economic Zone
Airscape of project in South Africa Energy Metallurgy Special
Economic Zone
 Impression drawing of South Africa Energy Metallurgy
Special Economic Zone

Impression drawing of Coking，Refractory & Limestone

 Impression drawing of project in South Africa Energy
Metallurgy Special Economic Zone

Impression drawing of Electric Power Plant

 Impression drawing of project in South Africa Energy Metallurgy Special
Economic Zone

Impression drawing of Ferrochrome & Ferromanganese

Ichnography of project in South Africa Energy Metallurgy
Special Economic Zone

Ichnography
 Macro-environment analysis

South Africa-Country profile

• It is located in the south of Africa, having a capital of

Pretoria. It is one of BRICS countries. The economic
aggregate accounts for about 20% of that of Africa.
• The land area is 1,220,000km2, and the national
population is about 49,320,000.
• In 2011, the nominal GDP of South Africa was US
408200000000 dollars, the per capita GDP was US
8048 dollars, the actual growth rate of GDP was 3.1%,
and the year-on-year growth of CPI was 5%.
• The output value of the primary industry, secondary
industry and tertiary industry accounts for 12%, 21%
and 67% of GDP respectively. The mining industry,
manufacturing industry, agriculture and service
industry are the four pillars of economy in South
Africa, and account for 21.2%, 16.3%, 14.5% and
13.4% of GDP respectively. But meanwhile, the rate of
inflation and unemployment rate run at high level.
• In 2004-2007, it kept 5% of average annual growth
rate. In 2007-2011, the actual GDP was averagely
grown by 3.6%.
 Overview on condition of mineral
resources in South Africa

The main resources in South Africa are concentrated in all provinces of the north. There
are 170 main mining projects (including all stages concerning the grass roots, exploration,
feasibility study and operation) through the project accumulation of Ministry of Mines and
inquiry of Intierra system, including 18 iron ore projects (mainly concentrated in Limpopo),
111 coal ore projects (mainly concentrated in Limpopo, Mpumalanga and kwazulu-natal), 15
manganese ore projects (mainly concentrated in Northern Cape), 15 chromium ore projects
(mainly concentrated in North West, Limpopo and Mpumalang), and 11 nickel ore projects
(mainly concentrated in Limpopo and Mpumalanga).
Limpopo North Northern Mpumalanga Kwazulu Gauteng
West Cape -natal

Iron ore 9 0 6 2 0 0
Coal ore 14 0 0 78 18 1
Mangane 0 3 8 2 1 1
se ore
Chromiu 4 7 0 3 0 1
m ore
Nickel 4 3 1 2 0 1
ore
Overview on condition of mineral resources
in South Africa-Iron ore
 Overview on condition of mineral
resources in South Africa-Coal ore
Overview on condition of mineral resources in
South Africa-Manganese ore
Overview on condition of mineral resources in
South Africa-Chromium ore
 Overview on condition of mineral
resources in South Africa-Nickel ore
 Overview on condition of mineral
resources in South Africa

Legend

Coal
Iron
Manganese
Mittal steel
plant Nickel
Chromium
Scaw
Metals
steel plant

Evraz
Highveld
steel plant

Mittal steel
Mittal steel plant
plant
 Overview on condition of mineral
resources in South Africa

It can be seen through the above diagram that, the resource distribution in South
Africa mainly has the following characteristics:
The resources in Limpopo, Northern Cape and Mpumalanga are relatively rich,
including:

1. There are rich coal and iron resources in Limpopo, and the coal resources are
mainly concentrated in the north of this province, most of which are in the
exploration stage and have the big development potential. The iron ore resources
are mainly concentrated in the feasibility study stage (except for Thabazimbi iron
core in production). A certain nickel and chromium resources are provided in the
middle part and south of this province.

2. The main resources in Northern Cape are manganese ore (in production and
exploration) and iron ore in production. The coal resources are relatively lacked in
this province.

3. There are a lot of coal resources (basically in the almost stripper stage) in
Mpumalanga, and meanwhile, a few iron ore and manganese ore resources are
provided.
 Main metallurgy ore type-Iron ore

The iron ore in South Africa is mainly distributed in Limpopo and Northern Cape, wherein the iron ore
project in Northern Cape is mostly mature project in production (for example, Sishen iron ore, is one of top
ten iron ores in production in the world), and the iron ore in Limpopo is mainly concentrated in the previous
pre-feasibility study and feasibility study stage.
Table: Main iron ore in production in Africa
Iron ore Iron ore
Total resource reserve Net content of Fe concentrate in concentrate in
Name of iron mine Country Grade (Fe %)
2011 2010
(t) (t) Output (t) Output (t)
Sishen
South Africa 1,760,400,000 1,020,751,000 57.984 38,900,000 41,337,000
Khumani
South Africa 572,250,000 369,032,000 64.488 8,725,000 8,765,000
Kolomela
South Africa 365,700,000 235,298,000 64.342 1,500,000
Tonkolili
Sierra Leone 12,751,000,000 3,982,902,000 31.236 1,300,000
Tebessa
Algeria 1,300,000 1,100,000

Liberia
Liberia 14,000,000 8,330,000 59.5 1,300,000
mines
Beeshoek
South Africa 121,550,000 77,394,000 63.673 960,000 521,000
Thabazimbi
South Africa 36,900,000 22,834,000 61.88 903,000 2,047,000
Marampa
Sierra Leone 1,078,000,000 336,983,000 31.26 800,000
Note: Other four iron ores in production in South Africa are located in Northern Cape, except that thThabazimbi iron ore is located in Limpopo.
 Main metallurgy ore type-Iron ore

Legend
900,000t iron ore Iron ore in the
concentrate was produced feasibility study stage
in the eighth iron ore in Coal
production in Africa in Iron
2011.
Manganese
Nickel
Chromium

Main iron ore in production in South

Africa
 Main metallurgy ore type-Iron
ore

Iron ore project

1. Palabora project
● It is located in the east of Limpopo.
● The project is in production stage, the iron ore resource is about
240,000,000t, and the average grade is 56%.
● The annual capacity of iron ore is 4,500,000t.
● Currently, it has transportation capability of railway and port.
2. Ferrum Crescent project
● It is located in the west of Limpopo, and close to the large coal field
in the east of Limpopo.
● The project is in the feasibiiyt study stage, the iron ore resource is
about 307,000,000t, and the average grade is 26.9%.
● Ferrum Company is a listed company in Australia, London and
Johannesburg. Up to May 8, 2013, its market value in the ASX
(Australian Securities Exchange) was 4,860,000 Australian dollars.
 Main metallurgy ore type-Coal
ore

The coal ore resources in South Africa are mainly distributed in

Limpopo, Mpumalanga and Kwazulu-natal. Wherein the resource of coal
field in Limpopo accounts for above 40% of coal resource in South
Africa (most of which is in the exploration stage, and have relatively big
resource potential), a lot of coal can provide the high-quality power
station coal and metallurgical coal, and the only disadvantage is that the
infrastructure condition is relatively poor.
In the past, Kwazulu-natal was the flourishing coking coal flourishing,
and currently, the reserves are relatively few, and the inferior coal is
mainly provided, therefore, it is difficult to exploit.
The coal field in Mpumalanga is in the relatively mature stage. The coal
output of this province accounts for 83% of total coal production.
However, most of projects have been exploited for a relatively long time,
and the exhaustion of resource is faced. It is predicted that the biggest
Witbank Coal Field in this province will be used up in 20 years.
 Main metallurgy ore type-Coal
ore
Large
undeveloped coal
field (including
power coal and
metallurgical Legend
coal) having big Legend
potential Coal
Iron
Manganese
Nickel
Chromium

Relatively mature
coal field which is
almost exhausted

The power coal is

main coal field,
and thus, is
exploited with
difficulty.
 Main metallurgy ore type-Coal
ore

Coal project
1. Coal project of Universal Coal
● Two coking coal projects are located in the north of Limpopo.
● The project is in the exploration stage, and the resource is 1,900,000,000t
(exploration + control + speculation).
● It is predicted that the annual capacity is 10,000,000t.
● Universal Coal Company is registered in England, listed in Australia, and is
engaged in the coal exploration and development in the east and northeast of
South Africa. And now, its share price is 0.089 Australian dollars.
2. Coal ore project of Resource Generation
● It is located in the north of Limpopo, and is Waterberg Coal Field.
●The project is in the exploration stage, and the resource is 3,700,000,000t
(which his mainly the power coal, including part of soft coking coal).
● The annual capacity of the first stage is 6,000,000t, and the annual capacity
of the second stage is 25,000,000t.
●Resource Generation Company is a coal exploration and development
company listed in Australia and South Africa. Now, its share part is 0.39
Australian dollars, and the market value is about 100,000,000 Australian
dollars.
 Main metallurgy ore type-
Manganese ore

Now, the manganese ore resources in South Africa are rich, and account for about 75% of
total quantity in the world. Most of deposits are located in the manganese ore belt of Northern
Cape. According to the United States Geological Survey, it is estimated that the reserves of
manganese ore in 2011 in South Africa are 15,000,000,000t. South Africa is the biggest
manganese producing country in the world, and 3,400,000t manganese was produced in
2011.

The manganese ore in South Africa is mainly concentrated in Kuruman, Northern Cape. This
mine area spans 150km ore belt, from Postmasburg in the south to Kalahari in the north, and
has an area of 2331km2. Kalahari mine area was found in the 1960s and exploited, which
mainly produces metallurgical manganese ore, and meanwhile, accompanies the hematite.
The manganese content is 30%-50%. The average grade is 42%, and the phosphorus
content is low (0.03-0.05%).

The manganese ore resources in South Africa are rich, but the infrastructure construction
needs to be strengthened. The port specially used for manganese export in South Africa is
only Port Elizabeth, and this port has a distance of more than 1000km away from the mineral
city. Meanwhile, the stuffing capacity is also limited, and now, it operates at a speed of
4,400,000t/y, and it is estimated that it is difficult to exceed 6,000,000t/y throughput.
 Main metallurgy ore type-
Manganese ore

Legend

Coal
Iron
Manganese
Nickel
Chromium

The manganese ore which is

in production and explored
in South Africa is mainly
concentrated in the
manganese ore belt from
northwest to southeast.
 The main metallurgical mineral:—manganese ore

Manganese project
1. CITIC United Asia manganese project
• The project is located in the manganese ore belt in Northern Cape
• It is applying for mining rights. The amount of resources is 100 million
tons and the average grade is 36%
• CITIC United Asia (CITIC Group wholly-owned subsidiary) holds 51% stock
equity of the project and South African Chinese enterprise Eagle Canyon
International Group Holdings (South Africa) Limited holds the 49%.
2. Kalagadi manganese project
• The project is located in the manganese ore belt in Northern Cape
• The project is in production with the control-level resources of 22.65
million tons and the estimated-level resources of 15.66 million tons.
• Underground mining, with an annual output of 3 million tons of raw ore and
the average grade of 38.55% (2013)
 The main metallurgical mineral—chrome ore and nickel ore

Chrome ore
South Africa is rich in chrome ore. the chromite deposits are
mainly distributed in the Bushville complex in the northeastern
region. The ore body is mainly layered and the amount of
resources is about 3 billion tons accounting for over 60% of
the world's total reserves of chromite.
Nickel ore
South Africa is the country in Africa with the richest nickel
resource whose nickel production accounts for about 2% of
global production. Nickel is produced from the Bushville
complex with the lower grade. It is often accompanied with
platinum, chromium and other metals with the resources amount
of 2.5 million tons.
The main metallurgical mineral—chrome ore and nickel ore

Legend

Coal
Iron
Manganese
Chrome
Nickel
 The main metallurgical mineral—chrome ore and nickel ore

Chrome ore project

1. Sinosteel-Limpopo chrome ore project
• The project is located in the south of Limpopo
• The project is in production with the chrome resources of 50
million tons
• The production of raw ore is 600,000 tons / year and ferrochromium
smelting is 360,000 tons / year
2. Sinosteel-Samanco chrome ore project
• The project is located in the north-west of Mpumalanga
• The project is in production with the chrome resources of 70
million tons
• The production of raw ore is 1,000,000 tons / year and
ferrochromium smelting is 360,000 tons / year
 Global demand of steel and ferroalloy
1.Global steel demand in 2013 was 1.455 billion tons, up by 3.2% caompared with 2012
(International Steel Association estimation) with the growth rate increased by 1.1%. 。
2.Africa's steel demand in 2013 was 27.3 million tons, up by 7.7% with the growth rate
increased by1.9%, accounting for about 1.88% of global steel demand. As for different
regions, the demand of EU-27 returned to growth in 2013 increasing by 2.4% to 148.1 million
tonnes; demand of the Commonwealth of Independent States increased by 3.9% to 57.4 million
tonnes with the growth rate decreasing by 3.1%; demand of North American Free Trade Area
increased by 3.6% to 135 million tonnes with the growth rate decreasing by3.9%; demand of
Central and South America increased by 6.3% to 50.4 million tonnes with the growth rate
increasing by 2.5%; demand of the Middle East increased by 5.9% to 52.8 million tonnes
with the growth rate increasing by 2.4% ; demand of the Asia-Pacific region increased by
2.8% to 948 million tons with the growth rate increasing by 0.4%. Except the North America,
the global steel demand of growth rate in major areas all increased in 2013.
In summary, the growth rate of global steel demand in 2013 is between 4% and 4.5%. The
emerging areas such as the Middle East, Southeast Asia, Africa and Central and South
America has a more obvious growth, especially the Southeast Asia.
3.The demand for steel in South Africa in 2012 was about 6 million tonnes.
4. The total amount of chromite resources in the world is more than 12 billion tons but
with extremely uneven distribution. It is mainly distributed in South Africa, Kazakhstan,
and Zimbabwe. Chrome is mainly used for the manufacture of stainless steel so the
production of stainless steel is directly influenced by chrome ore demand. In recent years,
the stainless steel industry in China went from the rapid growth into a smooth adjustment
period. The stainless steel demand in China will exceed 22 million t in 2020. The
consumption demand of chrome ore will continue to grow significantly. It is expected that
the chrome demand around the World will present to grow in the next few years, and the
demand areas will still be concentrated in the Asian market dominated by China.
 Steel products demand
Table of steel consumption in different industries
in South Africa 2011

Flat steel products Long steel products

Building steels 36% Building steels 46%
Tube and pipe 24% Machinery and equipment 21%
Mine, energy, water, chemical and
Package 16% 19%
natural gas
Automobile manufacturing 13% Automobile manufacturing 7%
Mine, energy, water, chemical
4% Agriculture 4%
and natural gas
Furniture and home appliances Furniture and home appliances
3% 3%
manufacturing manufacturing
Machinery and equipment
manufacturing 2%
Agriculture 1%
Transportation 1%
Data sources：BSi Steel Sasfin Showcase presentation, May
2012
 Steel production
At present, steel products production in
South Africa is about 10 million tons
(unofficial statistics);
The crude steel production in South
Africa is 7.12 million tons in 2012 (The
data published by South African Iron and
Steel Association South African Steel &
Steel Institute published shows that the
steel products production is about 800
million tons), accounting for about 60%
of Africa's overall production;
Steel imports in South Africa in 2012
were 850 000 tons with year-on-year
decrease of 15.8% (100.47 million tons
in 2011with year-on-year increase of
52.4% is the peak of the 36 years). The
importing country is Korea, China, China
Taiwan, Turkey and so on.
At present, South Africa's domestic
demand for steel is 600 million tons and
parts of the domestic production of
steel products are exported.
 Steel production
South Africa has a complete range of manufacturing industry with more advanced technology. The production value
of manufacturing industry accounts GDP for nearly 20% among which the iron and steel industry is the most
significant with six major steel joint company and more than 130 steel enterprises.

（A） ArcelorMittal (South Africa)

1. Situation of products
The production of liquid steel in 2011 was 5.45 million tons decreasing by 4% compared with 2010 production of
5.67 million tons. The rate of capacity utilization fell from 71% in 2010 to 68% mainly affected by four major
production disruptions.
2. Situation of production
There are four production plants with the main products of flat steel and long steel.
2.1 The main production of flat steel is located at Vanderbijlpark and Saldanha factory under Mittal, with an annual
capacity of about 5.6 million tons of liquid steel, which makes Mittal South Africa become the largest flat steel supplier
in the African continent. The Vanderbijlpark plant has an annual capacity of 4.4 million tons, which is basically able to
meet 78% of the market demand for flat steel products in South Africa, including hot-rolled sheet, hot-rolled round,
cold-rolled, hot-dip galvanized, electro-galvanized, color coated steel sheet, tinplate coils and steel sheets.
The Saldanha plant is the most advanced and environmentally friendly steel mill in the World producing ultra-thin hot-
rolled coils for domestic and some high-end export markets. The plant has an annual output of 1.2 million tons of
steel.
2.2 Newcastle and Vereeniging plant under Mittal South Africa supply about 50% of the long steel products of the
market in South Africa, as well as some export products. The two plants together have the capacity of 2.2 million tons
of steel, of which 20% is basically used for export.
In addition to the above-mentioned capacity, Mittal South Africa also has 1.6 million tons of rolled products, 90,000
tons of seamless steel pipe and 20,000 tons of forging products. 80% of the long steel products of Mittal South Africa
are from the Newcastle factory which is a traditional integrated iron and steel plant, and Vereeniging factory mainly
produces electric furnace.
2.3 Mittal South Africa also owns the coke plant and the chemical products business in Tetris.
 Steel production

（B）Evraz Highveld steel and vanadium factory

Highveld is the second largest steel mill in South Africa whose parent company Evraz
Group is one of the largest vertically-integrated producers of steel, vanadium and mining
industry. The corporate owns the Hantai magnetite mine in Limpopo, South Africa, and the
mine is located in the area of Roossenekal, named as Mapochs. The mine product is used to
supply its steel mills in eMalahleni (formerly known as Witbank), Pumalanga to produce
vanadiferous steel slag, iron and steel.
In 2011, the steel output fell by 13% to 670,000 tons compared with 770,000 tons in 2010.
The decline in production was mainly because of the disruption of power supply caused by the
conversion of No. 7 furnace into open slag pit technology and two-week strike of Seifsa
suppliers.

（C）Scaw Metals South Africa

Scaw Metals South Africa is a leading manufacturer of integrated steel products, mainly
serving for mine construction and other industrial areas. The group mainly contains four main
business areas: dyed steel balls, wire products, castings and rolled products. Its main
production is located in South Africa and Australia, as well as part of the smaller business
operations in Zimbabwe and Zambia.
In 2012, its steel product output was 677,000 tons decreasing by 5% compared with 2011.
 Steel production

Location map of existing steel

mills in South Africa
Scaw Metals Steel
Mill

Mittal Steel Mill

Evraz Highveld
Mittal Steel Mill Steel Mill

Mittal Steel Mill

Mittal Steel Mill

 Development plan

The Iron Ore and Steel Report issued by South African Cabinet Office
accociated with Working Group (the report has been adopted by the South
African Cabinet in December 2012) Recommends: Due to the rapid industrial
development in South Africa, it will help to increase the competitiveness in
the field of steel to construct a new steel mill. The South African
Industrial Development Corporation (IDC) has completed a pre-feasibility
study on the new mill project, which concluded that new steel would reduce
the price of flat steel and long steel products in South Africa by about 10%.
Another conclusion is that the Ministry of Economic Development should
revise the South African Antitrust Act to ensure that major steel producers
enjoy preferential policies in iron ore and other industrial chains but the
downstream users will also be benefited. Moderate power will be given to the
relevant authorities to determine the pricing mechanism, compliance
regulation and sanctions against noncompliant objects.
An additional proposal in addition to the feasibility study report ensures
that the domestic market in South Africa has sufficient scrap iron and steel
supply and works to reduce waste and abuse of the scrap.
 Infrastructure

【Road】South Africa has the longest road network in Africa extending in all directions. The
network not only covers the country, but also connects with neighboring countries, which makes the
travel very convenient. The total mileage is about 754,000 km.
【Railway】The railway network and road network in South Africa supplement each other
constituting a complete land transport system. The railway connects to Zimbabwe, Mozambique,
Botswana, Zambia, Malawi and other countries with the total mileage of 34,000 kilometers, taking
the tenth in the world and accounting for 35% of the total railway mileage in Africa. 95% of the
railway is used for freight under the management of Transnet.
【Air transportation】 The air transportation in South Africa is relatively developed with 10
existing major airports, respectively, located in Johannesburg, Cape Town, Durban, Bloemfontein,
Port Elizabeth and other major cities. South African Airways is Africa's largest airline.
【Water transport】South Africa has the largest and most the most efficient sea shipping
network with the most complete facilities in Africa with its 96% of the exports conducted through the
sea shipping. The main ports include Richard Bay, Durban, East London, Port Elizabeth, Nqqura,
Mossel Bay, Cape Town and Saldanha Bay, which are managed by the National Ports Authority under
Transnet.
【Communication】The development level of telecommunications in South Africa is high and
the telecommunications network has basically achieved datamation with data microwave and fiber-
optic cable as the main transmission medium. Internet users are more than 8.5 million which is
expected to break through 10 million by the end of 2012. The postal service is monopolized by the
South African Post Office with advanced postal network and the business scope covering the whole
country.
【Electric power】South Africa is a big country of electric power in Africa supplying 2/3 of all
African power. There are 13 coal-fired heat power stations generating 88% of the total, a nuclear
power station, two pumped storage power stations, 6 hydropower stations and 2 fuel power stations.
In 2008, the annual electricity generation was about 238.3 billion kilowatts, and more than 95% of
the electricity was supplied by the South African Electric Power Company (Eskom). But with the
continuous development of the economy, the problem of electricity shortage in South Africa has
become increasingly prominent.
 Infrastructure
Responsible institutions for railways and ports: The Transnet Group is the exclusive monopoly of the South
African railway freight industry. The only shareholder is the South African government and is managed by the South
African Government Public Enterprise. All of its related assets and operations management are owned and managed
by their subsidiaries. Its subsidiaries include: freight rail companies, railway engineering companies, the State Port
Authority and port companies.

The Transnet Group's development plan is consistent with the South African National Infrastructure
Development Plan. The plan mainly includes upgrading existing infrastructure such as ports and railways. Specific
content will be prepared by Transnet Group to develop market demand strategy.
The Strategic Plan for Infrastructure Market Demand was proposed by President Zuma in February 2012: The
government plans to spend another 300 billion rand in seven years to build and upgrade infrastructure projects such as
railways, ports and oil pipelines, of which 205 billion rand for railway projects and 151 billion for the development of
freight railways.
One of the major challenges facing South Africa is that the existing rail system has reached its service life. Due to lack
of funding, 35% of the total mileage of the South African railway has been for long years out of repair. Only 3928 km of
the road can run at full capacity. 。

In April 2011, Deputy Minister Cronin of South AfricanTransport Ministry said in Johannesburg: The
South African government has approved a total investment of up to 970 billion rand to development plan of
railway infrastructure.
The plan will be launched in 2014 with a construction period of 18 to 20 years. At present, the South African
Engineering Board has completed the project feasibility study and program development for procurement, financing,
operation and maintenance, for which it takes reponsibility. According to reports, the project designs three important
high-speed railway.
current development:
- the United States GE won the bid in the locomotive tender of Transnet, while requiring 37% of the localization;
- another corporation China Southern Locomotive also won the bid;
- China Development Bank provides 45 billion rand loans;
- another joint venture company won the bid to build a railway line connecting Swaziland with the total of about 17
billion rand.
 Infrastructure
South Africa has eight major commercial ports: Saldanha Bay, Cape Town, Mossel Bay, Port Elizabeth,
Ngqura, East London, Durban and Richards Bay。 The above ports are managed by the National Ports Authority,
which is the affiliate of Transnet .
Port function design:
(1) Some design functions of the ports are primarily for bulk cargo, such as the Port of Saldanha serving for
iron ore exports and oil imports;
(2) the other is mainly for some certain important industries, such as Mossel Bay serving for the offshore oil
industry;
(3) There is also one kind that is to focus on a certain kind of freight as well as variety of import and export
commodities. Durban Port was used to be the largest container terminal in the Southern Hemisphere (recently
replaced by Jakarta), which is also the largest oil loading and unloading port in South Africa and has the capacity
to handle other bulk commodity dry goods and mixed freight.

Introduction of important ports 1-Richards Bay ：Founded in 1976, the main coal export port in
South Africa, is also the world's second largest bulk port. It has a total of 21 berths with the
maximum depth of 19.5 meters. There are various loading and unloading equipment such as shore tackle,
ship loader and tugs. The maximum weight of ships which can berth against the port is 37 million
tons. In 2010, the annual throughput of the port was 85 million tons (which is planned to be
expanded to over 100 million tons in 2019).
The port has become the most important place to load and unload bulk cargo dry goods, dealing with
dry bulk with the growing types, new bulk stock and bulk cargo. Bulk cargo handling is concentrated
in the following four areas: coal exports; bulk cargo; dry bulk and wet bulk. A large part of the
freight business at Richard Bay come from the port of Durban with the relative advantage of
sufficient storage space and less serious port congestion. It also has the capacity to load and
unload a small amount of containers. Richard Bay currently has 21 berths in operation, which
includes coal handling centers and small supporting wharf for dredger and tugs berthing at ports.
The coal processing center with 5 berths is privately owned by Richard Bay Coal Terminal.
 Infrastructure
Richards Bay – Inland transportation
It is known as the Richcor coal line from the southernmost end of the port to the South Dunes train
loading center, the entire line serving the RBCT. The northern part of the harbor is connected by
rail to Swaziland and the North Shore, Nsezi. John Ross, which is undergoing transformation, is
directly accessible by the rail to N2 motorway. The road by N2 connecting to Durban and N3 connecting
to Gauteng province is in good condition. Another road with large capacity directly connected to
Gauteng province needs to be built in the future. Richards Bay - Short-term planning for future dry
bulk and multi-purpose distribution centers is included in The Richards Bay Capacity Development
Plan. It plans to take the opportunities to increase the handling capacity from 14 million tons per
year to 24 million tons per year, with the help of a ring railway, new port equipment, stockpiling
sites, rail infrastructure and more rational port operations. The new Coal Export Distribution Center
plans to replan the 600 series berths at South Dunes and construct additional berths. The wet bulk
cargo handling capacity will be enhanced through the completion of the 208 berth and the increase in
the storage area, which provides the possibility to add an operating machine.

1、Umlazi water front

2 、 dry bulk and multi-purpose
distribution centers
3、Bayside smelter
4 、 Richards Bay coal
distribution centers
5. South Dunes area
 Infrastructure
Introduction of important ports 2-Saldanha Bay：It has a capacity of 8,000 tons per hour and the
annual throughput of 50 million tons (in 2019 planned to be expanded to 80 million tons), as the
main iron ore transport terminal. The iron ore distribution center has two berths and it can berth
two 35 tons of cargo ship.
The harbor is the deepest port in South Africa and can berth ships with 21.5 meters of draught.
The terminal is 900 meters long containing two iron ore berths connected to the causeway with full
length of 3.1 kilometer. At the end of the iron ore terminal there is another tanker berth with 365
m length. The iron ore exporting equipment comprises a tilting device for unloading ore from a
train, an apparatus for unloading the iron ore to a heap, and a conveyor belt. This conveyor belt
can carry the raw materials to the cargo ship in the terminal 7km away .
Inland transportation: The port is connected by the Sishen-Saldanha railway to the iron ore
field of Northern Cape. There is also a railway leading to Cape Town, then Cape Corridor and the
hinterland of Gauteng. The N7 motorway allows the Saldanha port to be connected to the entire
national road network. Liquid fuel piping connects the port and storage equipment outside the
harbor and can be transpoted to the refinery in Cape Town

1. Iron ore distribution center (contains

ore deposit site, 2 berths, and the end
of the Sishen-Saldanha heavy rail
corridor)
2. Multi - purpose distribution center
3. The liquid bulk cargo berth at the end
of the terminal
4. Mossgas oil and gas field
5. Berth bay for small boat
 Infrastructure
The electricity market in South Africa is exclusively operated by the national electricity company
Eskom, with a capacity of 42 million kw accounting for 60% of Africa. In addition to meet home needs, the
South Africa's electricity also exports to neighboring countries. South Africa is rich in coal resources with
the production ranking the first in Africa, which provides a natural advantage for the development of coal
power plants.
GDP growth rate of South Africa is expected to reach 4%. In the next few years, The gap between
supply and demand of South Africa's electricity will gradually widen. As can be seen from the figure
below, according to the existing power supply capacity, due to equipment aging and other factors, the
total capacity will continue to decline while the electricity demand is rising rapidly. The electricity supply
could not meet the peak demand in 2012 and by 2018, the gap will reach 9500MW.
 Infrastructure
The South African government has introduced a new electricity policy to encourage
independent power providers (IPP) to enter the market, and 30% of new installed capacity
will be built and provided by IPP in the market of South Africa. The operation of the
power plant of IPP is required to subject to standardization and internationalization.
Eskom plans will add 17,000 MW by 2014 and double the current capacity to 80,000 MW
by 2025. Approximately 50% of the added 40,000 MW is nuclear power followed by coal and
gas power plants, and eight hydropower stations with total installed capacity of 5.1
million kilowatts.
From the beginning of 2007 and in the next five years, Eskom plans will invest 150
billion rand (22 billion US dollars) for power facilities. Eskom plans 50 billion rand
from its own funds, and the remaining 100 billion rand are financed by external
financing among which half comes from domestic financing and half from foreign financing.
Taking into account the inflation factor, the investment is expected to double to 300
billion rand (44 billion US dollars) in 5 years. The picture below: Eskom power plant
construction planning
 Investment policy
1.Overall evaluation - the investment environment is good.. South Africa has established a
comprehensive policy system to attract foreign investment and promulgated a number of laws and
regulations to encourage and regulate investment such as South African Ministry of Trade and Industry,
specifically responsible for investment supervision providing "one-stop" investment services and
international trade management committee, replacing the original tax office, responsible for
management and supervision of industrial preferential policies.
2.The government encourages foreign investment. The South African government vigorously introduced
foreign investment with all industries open to the outside and took a series of policies and measures
such as the establishment of industrial development zones (IDZ), implementation of regional
development plan (SDI) and tax incentives for foreign investment to encourage foreign investment.
Foreign enterprises enjoy the same national treatment as if they were local enterprises .
3.The Government of South Africa provides subsidies or support to the following projects to guide the
direction of domestic and foreign investment.
• Technical training subsidy. For enterprises investing in South Africa, the government will provide
training subsidies equivalent to 50% of the cost of labor and technical training within three years.
The total amount of subsidies shall not exceed 30% of the total project cost;
•Subsidies for infrastructure projects. For important infrastructure investment projects, the
government will give local governments or investors subsidies up to 50% of the construction cost;
•Production equipment import subsidies. Where investors outside the Southern African Customs Union and
the Southern African Community introduce production equipment from overseas, the government shall
provide a cash subsidy equivalent to 15% of the value of new machinery and equipment with the total
amount not more than 3 million rand;
•Industrial Innovation Support Program. In order to encourage investment enterprises to carry out
technological innovation and new product development, subsidies of 50% of R & D costs shall be
provided depending on the assessment.
4. China and South Africa signed taxation agreements. In April 2000, government of China and the
government of South Africa signed the Agreement between Government of the People's Republic of
China and the Government of the Republic of South Africa on the Avoidance of Double Taxation and
the Prevention of Fiscal Evasion with respect to Income.
5. South Africa is a country with a "long" strike history. Workers have strong awareness of rights
and the labor costs are high while the foreign workers are hard to enter South Africa, a country
with high unemployment.
 Investment policy
Main tax type Tax rate
General industry：28%
Corporate income tax Branch of foreign corporation：33%
Special economic zones 15%
VAT 14%
Dividend tax 15%
Corporate juridical person 50%；
Capital gains tax Natural person 25% （ calculated by maximum 40% of individual
income tax）
Estate and gift tax 15%
Interest tax 0.75%
Stamp tax 1-3%
Where the Corporation is established or the authorized share
Corporation tax capital is added, it shall be taxed by 0.5% of the capital or
the increase of the share capital
6. BEE Act-26% of the ownership of the enterprise must be held by local blacks
In 2001, the South African government promulgated the Black Economic Empowerment Act. The Act stipulates that
26% of the ownership of the enterprise must be held by local blacks and also the proportion of local blacks in management
has been regulated, which means that foreign ownership is limited to less than 74%.

7. Three important development fields. 2012-2015 industrial policy development plan issued by South
African Ministry of Trade and Industry pointed out: there are three fields which has a very important role in
industrialization process and economic development of South Africa, namely:
field 1 - qualified new development field. To realize the potential of metal processing, capital and transportation
equipment, especially the implementation through large public infrastructure projects; upstream industries for oil
and gas; green energy and energy saving industries; Food processing industry related to agricultural products
prices and food security; shipbuilding industry;
 Investment policy
8.Special economic zone. In 2000, the South African government began to
implement industrial development zone policy. The aim is to stimulate direct
investment at home and abroad to promote the development of export-oriented
manufacturing and services industry, thereby boosting economic growth and
increasing employment opportunities.
Between 2001 and 2010, South Africa has set up four industrial development zones:
the Coega Industrial Development Zone, the East London Industrial Development Zone,
the Richards Bay Industrial Development Zone and the Or Tambo International Airport
Industrial Development Zone. Coega, East London and Richards Bay are all under
operation located in the eastern coastal areas. Or Tambo is the only inland
industrial development zone, not putting into operation. Four operators have been
awarded the industrial development zone operator license by the South African
Ministry of Trade and Industry. From 2002 to 2010, the four industrial development
zones attracted 40 investors and 11.8 billion rand investment.
The South African Industrial Development Zone is one of the innovative programs
pursued by the Ministry of Trade and Industry to enhance the international
competitiveness of the manufacturing sector. The program is to select a specific
area closely linked to international airports and harbors, invest in the
construction of a sound infrastructure, provide investors with convenient customs
clearance and tax incentives and establish export-oriented intensive production
base. The program mainly includes the following: to establish a special service
department under the Customs Department of Customs and Trade Office, responsible
for the provision of professional tariff services and policy advice; provide tax
exemption for the import tariff of raw materials related to production in the area
and preferential tax rate on machinery and other fixed assets investment projects;
levy zero VAT to the procurement of raw materials inside South Africa by
enterprises; have priority to enjoy various subsidies implement by government;
provide one-stop convenience services for the application and establishment of
enterprises and other procedures and reduce operating costs; improve the
infrastructure facilities, provide a world-class hardware for the operation of
enterprises; provide efficient supporting services to facilitate the operation of
investors in the development zone, optimize the soft environment of operation;
implement export-oriented strategy to promote the final product exports.
South African Wildlife Park
 Significance of South Africa Energy Metallurgy base

1. Make use of resources for deep processing, increase added value,

increase employment and in line with domestic industrial
development strategy in South Africa.
2. Industrial agglomeration, integration of the upstream and
downstream of the industry chain; Conducive to the local
infrastructure construction.
3. Products to meet the global market demand, support the African
economic construction.
4. Develop the advantages of China-Africa B&R production cooperation.
5. Transfer China's excess steel capacity to reduce China's high
energy consumption.
 Macro-environment analysis

Year 2007 2008 2009 2010 2011

Nominal GDP（100 million dollar） 2727.3 2752.8 2827.5 3635.2 4082.4

GDP per capita（dollar） 5614 5642 5665 7277 8084

Actual GDP growth rate（%） 5.5 3.6 -1.5 2.9 3.1

Inflation rate（%） 7.2 11.5 6.2 3.7 5

Merchandise export（FOB 100
751.8 853.7 775.9 994.2 1176.8
million dollar）
Merchandise import（FOB 100
773.9 995.6 637.6 801.4 N/A
million dollar）
Current account balance（100
-207.2 -23.7 -13.5 -13.7 -13.9
million dollar）
Foreign exchange reserve（100
188.64 305.84 352.37 381.75 425.95
million dollar）
Foreign debt total（100 million
752.7 718.1 785.6 985.4 1034
dollar）
Exchange rate（ZAR/dollar） 7.1 8.3 8.5 7.3 7.3
Institutional rating:
1. According to Sinosure National Risk Rating Report (2010), the rating of South Africa was 5 in grades from 1 to 9, from low to
high. South Africa's rating is in the middle, which means the risk level is high.
2. The China Development Bank has a credit rating of A for South Africa and a risk limit of $ 10 billion. The rating outlook is
stable.
3. International rating agencies for South Africa's sovereign rating
Rating agency Foreign exchange Home currency Time of adjustment
S&P BBB+ A+ 2011-10
Moodys A3 A3 2010-11
Fitch Ratings BBB+ A 2010-10
 Macro-environment analysis
Year 2007 2008 2009 2010 2011

Nominal GDP（100 million dollar） 2727.3 2752.8 2827.5 3635.2 4082.4

GDP per capita（dollar） 5614 5642 5665 7277 8084

Actual GDP growth rate（%） 5.5 3.6 -1.5 2.9 3.1

Inflation rate（%） 7.2 11.5 6.2 3.7 5

Merchandise export（FOB 100
751.8 853.7 775.9 994.2 1176.8
million dollar）
Merchandise import（FOB 100
773.9 995.6 637.6 801.4 N/A
million dollar）
Current account balance（100
-207.2 -23.7 -13.5 -13.7 -13.9
million dollar）
Foreign exchange reserve（100
188.64 305.84 352.37 381.75 425.95
million dollar）
Foreign debt total（100 million
752.7 718.1 785.6 985.4 1034
dollar）
Exchange rate（ZAR/dollar） 7.1 8.3 8.5 7.3 7.3
Institutional rating:
1. According to Sinosure National Risk Rating Report (2010), the rating of South Africa was 5 in grades from 1 to 9, from low to
high. South Africa's rating is in the middle, which means the risk level is high.
2. The China Development Bank has a credit rating of A for South Africa and a risk limit of $ 10 billion. The rating outlook is
stable.
3. International rating agencies for South Africa's sovereign rating
Rating agency Foreign exchange Home currency Time of adjustment
S&P BBB+ A+ 2011-10
Moodys A3 A3 2010-11
Fitch Ratings BBB+ A 2010-10
 Summary of project economic and technical parameters
Investment output
Capacity in each phase
Total Construction scale value Gross
Plant UOM workers Remarks
Capacity Construction time （Million （Million margin
phase Capacity
period USD） USD）
Phase I 2018-2019 6 Million t/a 300 2 years 50 180 33%
2 years
01 Coal Washery 2000 Phase II 2019-2020 7 Million t/a 350 50 180 33%

Phase III 2020-2021 7 Million t/a 350 2 years 50 180 33%

Phase I 2018-2020 1.7 Million t/a 500 3 years 200 600 35%
Coke chemical
02 510 Phase II 2020-2022 1.7 Million t/a 500 3 years 200 600 35%
plant
Phase III 2022-2024 1.7 Million t/a 500 3 years 200 600 35%

Phase I 2018-2021 2*300 MW 300 4 years 600 165 33%

Coal-Fired
03 300 Phase II 2021-2024 2*600 MW 500 4 years 1200 330 33%
Power Plant
Phase III 2024-2027 2*600 MW 500 4 years 1200 330 33%

Phase I 2018-2020 1 Million t/a 4300 3 years 500 1200 35%

Ferrochrome
04 300 Phase II 2020-2022 1 Million t/a 4300 3 years 500 1200 35%
Plant
Phase III 2022-2024 1 Million t/a 4300 3 years 500 1200 35%

Phase I 2018-2020 0.3 Million t/a 1200 3 years 150 300 35%
Ferromanganese
05 100 Phase II 2020-2022 0.35 Million t/a 1300 3 years 150 300 35%
Plant
Phase III 2022-2024 0.35 Million t/a 1300 3 years 150 300 35%
 Summary of project economic and technical parameters
Investment output
Capacity in each phase
Total Construction scale value Gross
Plant UOM worker Remarks
Capacity Construction time （Million （Million margin
phase Capacity
period USD） USD）
Phase I 2018-2020 15 Million t/a 600 3 years 80 150 35%
Silicon
06 manganese 0.5 Phase II 2020-2022 15 Million t/a 600 3 years 80 150 35%
plant
Phase III 2022-2024 15 Million t/a 600 3 years 80 150 35%

Phase I 2018-2020 10 Million t/a 500 3 years 100 120 32%

Ferrosilicon Phase II 2020-2022 10 Million t/a 500 3 years 100 120 32%
07 0.3
plant
Phase III 2022-2024 10 Million t/a 500 3 years 100 120 32%

Phase I 2018-2020 100 Million t/a 2000 3 years 200 500 32%

08 Steel Plant 3 Phase II 2020-2022 100 Million t/a 2000 3 years 200 500 32%

Phase III 2022-2024 100 Million t/a 2000 3 years 200 500 32%

Phase I 2018-2020 100 Million t/a 2000 3 years 400 1500 33%
Stainless
09 steel 3 Phase II 2020-2022 100 Million t/a 2000 3 years 400 1500 33%
plant
Phase III 2022-2024 100 Million t/a 2000 3 years 400 1500 33%

Phase I 2018-2020 150 Million t/a 1000 3 years 100 250 33%

10 Lime plant 4.5 Phase II 2020-2022 150 Million t/a 1000 3 years 100 250 33%

Phase III 2022-2024 150 Million t/a 1000 3 years 100 25 33%

Total 18300 2640 7560

 Special Economic Zone Occupation Institute
Main Technical And Economic Indicators Table

Indicator
No. Indicator UOM Remarks
Phase I Phase II

Construction Period Project

A Year 2018-2020 2020-2023
Planning

B Scale

1 Number Of People Training person/a 2000 2000

2 Number Of Teachers Person 100 100

C Area Covered M2 100000 10000

D Construction Area M2 50000 50000

Office Building
1 M2 5000 5000
Academic Building
2 M2 20000 20000
Laboratory
3 M2 5000 5000
Library
4 M2 800 800
Other Supporting Facilities
5 M2 12000 12000
South Africa Energy Metallurgy Special Economic Zone
Occupation Skill Training Schedule
(2018 -2019)
South Africa Energy Metallurgy Special Economic Zone
Occupation Skill Training Schedule
(2018 -2019)
South Africa Energy Metallurgy Special Economic Zone
Occupation Skill Training Schedule
(2018 -2019)