Close

The SADC’s mining industry is booming – great news for their economies and the sector. The long-term success for the industry however remains dependent on infrastructure.

The current population of the SADC region, which is at approximately 272 million, will grow at a rate of about 2% per annum to reach approximately 350 million by 2027, meaning the region is already not satisfying current infrastructure requirements. Despite this, new mines are cropping up with speed, making infrastructure issues a top priority.

Fortunately, the relevant SADC heads have been looking into and addressing this problem for some time now, and have come together to outline an infrastructure programme aimed at addressing infrastructure needs. The immediate outcome of the event should see billions of US dollars invested over the next five years just to address short term needs.

The SADC Council of Ministers attended a three day even at the Joaquim Chissano International Conference Centre in Maputo, Mozambique last week, to oversee the development of a SADC Regional Infrastructure Development Master Plan (RIDMP) – aimed at delivering on infrastructure requirements by 2027. It was first validated by SADC Ministers responsible for infrastructure in June 2012 in Angola.

It was hosted by the Government of Mozambique with the coordination of the SADC Secretariat and the support of Trademark Southern Africa. The theme was: Accelerating investment in SADC infrastructure though Sustainable and Innovative Financing. The key note address and official opening statement were made by H.E. Armando Emilio Guebuza, president of the Republic of Mozambique and chair of SADC.

Infrastructure is the bedrock of our economic development and the deepening of our regional integration. It is therefore critical that, as Summit, we accord all our support to the implementation of the RIDMP. I note with great pride that, as part of our roadmap, a SADC Infrastructure Investment Summit has been pencilled for next year. I urge you all to accord this process considerable priority and indeed support. Angola is proud to not only have been party to this process, but to have led and guided it to successful conclusion,” HE José Eduardo Dos Santos, President, Republic of Angola and outgoing SADC chairperson said in summary of the event.

While mining is a critical sector in desperate need of infrastructure, the RIDMP aims to scale up implementation of regional infrastructure in numerous areas, including energy, transport and water, and will be implemented in a short (2013 – 2017), medium (2017 – 2022) and long-term (2022 – 2027) plan.

The short term action plan, presented by director of infrastructure and services for the SADC secretariat, Remigious Makumbe, presented the short term infrastructure master plan, talking directly to potential investors, funders of infrastructure and key international cooperating partners. The plan requires US$64 billion to be spent to meet initial targets.

According to the executive summary of the RIDMP, the study has identified 73 power generation projects to increase generation from the current 56 000 MW and surpass the projected demand of 96 000 MW by 2027. Power supply is critical for the mining sector. Three major interconnecting projects would facilitate the interconnection of Angola, Malawi and Tanzania to the SAPP. The estimated investment cost of all planned electricity generation projects is US$62 billion for the short term (2012 – 2017), US$39 billion for the medium term (2017 – 2022) and US$72 billion for the long term (2022 – 2027), totalling US$173 billion.

According to the RIDMP report: “The SADC railways generally operate well below their original design capacity, yet they cannot increase their volumes because of poor track condition, lack of locomotive and wagon availability and low operating capital. The Sector Plan suggests projects to revitalise the existing railways, build missing links (especially those serving the mining sector) and rehabilitate the Sena line to Beira and Malawi, the Lobito line in Angola and of the SNCC system in the DRC.”

In summary, the report concludes: “The current 4-7% economic growth in the SADC region is propelled by rising external demand, high international metal prices, rising global income, resurgent capital flows and the sound macro-economic policies of SADC member states. New investments in mining and mineral outputs are increasing, and fiscal discipline and abundant natural resources have combined to attract Foreign Direct Investment (FDI) into the region. Continued growth will, to a large extent, depend on the diversification, greater beneficiation and value addition of commodities, which will in turn create local employment. There is a critical requirement for improved intra-regional distribution networks, strengthened institutional capacity to attract sustained capital and increased domestic savings and investment. Efficient, integrated, cost-effective infrastructure is a prerequisite for harnessing opportunities in the global economy.”

For more info on the RIDMP report, go to: http://www.sadcfrc.org/assets/files/documents/executive_summary.pdf

 

 

 

Additional Reading?

Request Free Copy