The success of South Africa’s latest attempt to turn more of its mineral wealth into locally manufactured products depends on whether the country can fix its electricity and infrastructure problems, says XA Global Trade Advisors director and trade expert Donald Mackay.
The warning comes as the government designated R52.6 billion to the Fetakgomo Tubatse Special Economic Zone (FT-Sez) in Limpopo, a flagship industrial project aimed at boosting mineral beneficiation, manufacturing and green energy production in one of the world’s richest mineral regions.
Speaking to Sunday World this week, Mackay said special economic zones remained an important tool for attracting investment, particularly in rural areas. However, he warned that beneficiation could not flourish without reliable electricity, water, transport and logistics infrastructure.
“I’m a fan of the Sezs programme, conceptually, but we must understand that SEZs are just one instrument of policy. Sezs don’t really fix everything. The Sezs that work really well provide functional infrastructure in areas that are often very poor,” he said.
Development of an industrial hub
His comments come as the government positions the FT-Sez as a key vehicle to reverse South Africa’s long-standing pattern of exporting raw minerals while importing higher-value manufactured products.
Trade, Industry and Competition Minister Parks Tau designated the FT-Sez through a government gazette issued on May 22, paving the way for the development of a 1 000 hectare industrial hub in Limpopo’s mineral-rich Sekhukhune District.
The area hosts more than 40 operating mines and contains some of the world’s largest deposits of chrome, platinum group metals and vanadium.
Government hopes the project will help ensure that a greater share of the value created from those minerals remains in South Africa through local processing, manufacturing and industrial development.
Infrastructure and industrial capacity
However, Mackay argues that South Africa should pair ambition with efficient energy tools.
“We used to be the world’s largest producer of ferrochrome. We have the largest reserves of ferrochrome and now China is the world’s biggest producer. We need to go back and ask ourselves what occurred that allowed that to happen,” he said.
While South Africa remains one of the world’s most mineral-rich countries, much of the downstream manufacturing linked to the resources has taken place elsewhere.
Mackay said China had not simply become dominant because of mineral access but rather, because it had built the infrastructure and industrial capacity required to support manufacturing.
“When South Africa’s electricity prices shot through the roof and when our electricity became unstable, we bled ferrochrome smelting capacity to China. If that had not happened, China would have had to cut back on their stainless steel production, which is not going to happen.”
Mackay said special economic zones, however, remained an important mechanism for attracting investment, particularly in regions that had historically struggled to industrialise.
Mineral wealth
The Department of Trade, Industry and Competition’s acting deputy director-general for Investment and Spatial Industrial Development, Maoto Molefane, said the FT-Sez was specifically designed to retain more mineral wealth in communities.
“The Sekhukhune District is endowed with critical minerals with more than 40 operating mines.
“The world’s largest chrome deposit is found in the area. Platinum group metals and vanadium are in abundance.”
Government has identified a number of downstream industries it hopes to attract to the zone, including hydrogen production derived from platinum group metals, vanadium redox flow battery manufacturing, pyrometallurgical products, steel manufacturing and chrome-
finished products.
Investments and jobs
The project has also attracted significant investor interest. About 46 companies form part of the FT-Sez investment pipeline, representing a combined investment value of about R52.6 billion.
The development is expected to create about 8 000 jobs in the short term and more than 20 000 jobs over the next decade.
“Nine of these investors are firmly secured with a projected investment of R10 billion in the next five years. These investments are in the mineral beneficiation, pharmaceuticals and green energy sectors.”
Limpopo Economic Development, Environment and Tourism MEC Tshitereke Baldwin Matibe described the project as a major catalyst for economic transformation and job creation.
“As a provincial government, we have been making significant strides towards creating jobs and improving the economic outlook of Limpopo. The efforts of this seventh administration have seen GDP growth higher than the national average and a considerable decline in the unemployment rate – from 35% in 2025 to just over 28% today,” Matibe said.
“Our Sezs, particularly the Fetakgomo-Tubatse Sez, place our mineral beneficiation and rural economic development endeavours on queue for achievement.”
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- South Africa has allocated R52.6 billion to develop the Fetakgomo Tubatse Special Economic Zone (FT-Sez) in Limpopo, aiming to boost mineral beneficiation, manufacturing, and green energy in a mineral-rich region.
- Trade expert Donald Mackay emphasizes that the success of this project hinges on solving the country’s electricity, water, transport, and logistics infrastructure challenges.
- The FT-Sez targets retaining more mineral value locally by attracting industries such as hydrogen production, vanadium battery manufacturing, steel, and chrome products.
- The project has attracted 46 companies with potential investments totaling R52.6 billion, expected to create around 8,000 jobs short-term and over 20,000 jobs in the next decade.
- Limpopo’s government highlights the FT-Sez as a key driver of economic growth and job creation, contributing to reduced unemployment and higher GDP growth in the province.
