Investing in the Northern Cape
The Northern Cape is the largest of the nine provinces, taking up 30.5% of South
Africa's land area. Its borders on four other provinces, as well as the Atlantic Ocean to
the west and the countries of Namibia and Botswana to the north, making it an ideal
gateway to western African markets.
The province lies to the south of its most important asset, the mighty Orange River,
which provides the basis for both a healthy agriculture and an alluvial diamond
industry.
The province offers profitable investment opportunities in minerals and metals
processing, agriprocessing, fishing, mariculture and tourism.
Four investment corridors have been developed:
Namaqua corridor
Karoo corridor
Diamond field-Kalahari
corridor
Orange River basin
The major infrastructure to support these developments include the Buchu Bay-Doring
Bay deepwater harbour, Upington airport, and the Gamsberg to Loop 10 railway line.
Mining
The Northern Cape is rich in minerals, with the country's major diamond pipes found
in the Kimberley district. Alluvial diamonds are found on the opposite, western, side
of the province, washed westwards by the Orange River into the Atlantic Ocean,
where they are extracted from the beaches and sea between Alexander Bay and Port
Nolloth.
The province accounts for some 7% of global diamond exports, 13% of all zinc and
lead exports and more than 25% of the world's manganese exports. Mining giants
such as Mittal Steel, Samancor, Gold Fields, PPC Lime, Alpha and Assmang operate in
the Northern
Cape.
The region also supplies most of the country's iron ore production. Other important
metals and minerals include copper, limestone, gypsum, rose quartz, tiger's eye,
mica, verdite and semi-precious stones. These metals and minerals are mostly
processed outside the province, so there are opportunities for investors to establish
value-adding beneficiation plants inside the Northern Cape.
Agriculture and agriprocessing
The Northern Cape produces some of the highest-quality agricultural products in South
Africa. Produce ranges from grapes, lucerne, cotton, wheat, corn, carrots, potatoes,
ground nuts and soya beans. The
province is fast becoming a significant exporter of
table grapes, raisins and meat.
The establishment of fruit and vegetable processing operations would add value to the
province's agricultural products. There are opportunities for the production and
processing of dates, olives, rooibos tea and citrus products.
Growth in agriculture-related industries would also create a market for related
businesses such as fibre sack and cardboard carton manufacturing. The Northern Cape
is also large producer of sheep and goats, with specialist products such as ostrich
meat on the rise.
Tourism
The Northern Cape is richly endowed with natural beauty and resources that appeal to
tourists who appreciate the vast open spaces and serenity it provides. The area is
known worldwide its spectacular annual explosion of spring flowers which,
for a short
period every year, attracts thousands of tourists.
The long sun-drenched days, the silence of the veld, the extremes that range from
rolling sand dunes to stark and craggy lunar landscapes are features that are
attracting increasing numbers of tourists. The tourism industry exhibits significant
growth potential.
The province has a wealth of national parks and conservation areas. The Kgalagadi
Transfrontier Park, Africa's first cross-border game park, joins South Africa's Kalahari
Gemsbok National Park to the Gemsbok National Park in Botswana. It is one of the
largest conservation areas in southern Africa, and one of the largest remaining
protected natural ecosystems in the world. The park provides unfenced access to a
variety of game between South Africa and Botswana, over its land area of more than
3.6 hectares.
Investment is required to upgrade accommodation facilities, develop new attractions
and entertainment centres - like theme parks
- and upgrade air transportation
networks.
A R160-million retail, leisure and entertainment complex is currently under
construction at Kimberley's Big Hole - the largest hand-dug mining excavation in the
world, and itself a major tourist attraction.
Fishing
Port Nolloth is the hub of the fishing industry on this stretch of the west coast.
Because most of the fish caught in the Northern Cape waters have until recently been
landed and processed outside the province, development of the fishing industry has
been slow. This is all set to change, with the increased quotas that will be awarded to
land and process fish in the Northern Cape.
Stricter enforcement of quota rules, as from 1998, means that at least 65% of the
catch, which totals 7 085 tons
(mainly hake), are landed in the Northern Cape. This
opens up the possibility for more fish processing plants around the expanded harbour
at Port Nolloth.
A burgeoning mariculture industry with, among others, abalone being farmed for
export to the Far East, is also being established in the region.
Value-added processing
For those who want to export to Southern Africa, Northern Cape borders the important
markets of Botswana and Namibia and is the closest South African province to Angola,
which is undergoing phenomenal economic growth of around 19% a year.
The specific opportunities for companies that want to make locally sourced products
are numerous. These include carrot and fruit juice processing, vegetable canning,
ground nut and wheat processing, meat and leather processing, cotton and wool-based
textiles, wine-making, sunflower oil production and soya-based products.
In the minerals sector there is diamond cutting and
jewellery manufacturing plus other
specific projects such as an iron reduction plant, a steel mill, a zinc smelter and a
ferro-manganese smelter.
These energy-intensive industries could be especially interesting following the
discovery of Namibian natural gas fields. The new source of energy could see power
prices tumble when the Kudu gas fields are developed.
The development plans for Port Nolloth will help facilitate exports of both processed
minerals and fish. The R905-million project, which welcomes foreign investment, will
provide the province with its own deep-water port serving key export destinations in
Europe and the Americas. This would prevent the need for exported products to leave
Northern Cape via another South African province or Namibia.
Other advantages
Access to raw materials, cheap energy, and upgraded communications infrastructure -
most of the conditions are already in place for competitive value-added processing in
Northern Cape. The only key criterion missing from this list is labour. Here, again, the
province scores highly. Labour is among the cheapest in South Africa.
- Download the Department of Trade and Industry's Provincial Economic
Overview (1.8 MB) here.
SAinfo reporter
The Nchwaning manganese mine in the Northern Cape produces about 1.5-million tons of the mineral every year (Image: Assmang)
The Northern Cape takes up 29.7% of South Africa's total land area (Image: Mary Alexander)
Map: Department of Environment and Tourism
