B Sonjica: Information workshop conducted for National African Federated
Chamber of Commerce (NAFCOC)

4 march 2009

The Executive Mayor of Nelson Mandela Bay Municipality, Comrade Nondumiso
Maphazi
The CEO and President of PetroSA Mr Sipho Mkhize
The CEO of Coega Development Corporation Mr Pepi Silinga
The President of National African Federated Chamber of Commerce (NAFCOC) Nelson
Mandela Bay Mr Kutloano Headbush
Officials from government departments and distinguished guests
Ladies and gentlemen

Thank you for the deployment and support. My responsibility makes me serve
the country and compromise family, this time, the Eastern Cape.

Thank you Mr Headbush, the president of NAFCOC Nelson Mandela Bay Metro, for
inviting me to this information session. We indeed meet at very interesting
times, both from a global economic perspective as well as politically on the
domestic front. The global economic downturn does require us to engage and
compare notes whilst ensuring that we remain on course to achieving our set
goals. At times like these, the resolve of the collective of a nation always
gets tested. I am confident that once again, South Africans will be at the
forefront in finding solutions to the current economic challenges.

A task team has been set, led by the President, involving all stakeholders,
to look at ways of mitigating against the economic meltdown. In due course the
necessary announcements will be made in this stead.

From a South African perspective, I believe that this global crisis also
presents an opportunity for us to redefine the economic landscape of our
country. I would like to applaud initiatives such as this one, which brings
together some of the best business minds in the Metro for us to share
possibilities on the potential of the petroleum sector to contribute to the
economic development of this region and province. A vibrant and thriving
business community can only serve to bolster political stability by creating
employment and decent jobs and thereby combat poverty.

It is proper that we should take stock of the other developments that are
taking place at the Coega Industrial Development Zone and ask ourselves very
difficult questions such as, how do all these developments benefit the local
people? How many of our people’s lives have we changed since these activities
started here in Coega? Is there still an opportunity to change more lives?
Local Economic Development (LED) is about empowering and changing the lives of
local people.

As a contribution to the answering of these and other questions, I asked
officials from my department to work with NAFCOC in organising this information
session so that PetroSA, CDC, Eskom and other investors can make presentations
on business opportunities that the locals can prepare themselves for. I am very
happy that these organisations have responded in the positive, as usual. I have
also brought their executives to be here with us today. Thank you once again
and your presence here is very much appreciated. I am very much sure that the
local business people who are gathered here will indeed take advantage of the
business opportunities and change other people’s lives through partnerships and
employment.

In 2007, I presented an energy security master plan, which amongst others,
identified the need to build a crude oil refinery as well as the expansion of
related port, pipeline and storage infrastructure. I am glad that location
studies that were conducted by government for the implementation of the master
plan concluded that the best location for the crude oil refinery would be Coega
in this Metro-pole. You will hear more from PetroSA about the project, I don’t
want to steal their thunder. However, I need to indicate that for the people of
this region this presents an opportunity to change the economic landscape
forever. This is a long-term investment that generations of our people will
continue to reap benefits thereof, for very long time. For it to succeed, the
collective creativity and wisdom of the people of this region will be
required.

The petroleum controller in the DME has issued the first manufacturing
license to PetroSA to go ahead with the construction of the refinery. This
refinery initiative, currently known as project Mthombo, will produce 400 000
barrels of fuel per day. It would be one of the first in the world with the
ability to refine a particular type of crude oil known as "sour crude". It is
envisaged that the crude would be sourced from Venezuela, Brazil, Cuba as well
as West African oil producing nations such as Angola and Nigeria. I would like
to point out that PetroSA has already commissioned a training centre, as part
of skills development, in the Jongilizwe Secondary School in Butterworth and
the establishment of other such centres would be accelerated. This demonstrates
some of the spin-offs which will accrue to the province as a whole.

The Coega Industrial Development Zone has a location advantage in that it is
situated mid-way between the major markets in the East and West. Therefore,
access to these markets becomes easier. Furthermore, government, through the
Department of Trade and Industry, has created conducive and enabling
environment for local economic development to take place by attracting
investments. Department of Trade and Industry (the DTI) supports investments
through more than 90 grants and incentives, such as double taxation avoidance
agreements, customs and excise duty refunds and drawbacks, wear and tear
allowance etc. The Coega Industrial Development Zones (IDZ) has attracted
investors in the electricity supply, information communication technology
(ICT), Port Ngqura, rail and road networks, telecommunications infrastructure
and voice and data connectivity fields.

There is no doubt that government is doing everything possible to encourage
investors to come here, and now the local people must also benefit. Therefore,
it is very important that you engage with the presenters, ask questions and
make sure that you understand what you need to do to take advantage of the
business opportunities. The ball is now firmly in your court to make the best
use of this opportunity.

On electricity, four substations, including cabling have already been
completed by Alstrom Power Systems, consolidated power projects and African
Cables, as part of the bulk electrical supply infrastructure. Furthermore, the
Environmental Impact Assessments (EIA) studies for two Independent Power
Producers (IPPs) have been completed and negotiations are underway with the
project developers in this regard. The two IPPs, namely Suez and Avon combined,
would generate 1000 megawatt (MW). I am sure that these projects would also
contribute to job creation and more business opportunities for the local
communities.

I am aware that the Nelson Mandela Metro has an electrification backlog
mainly due to the fact that we have diverted investment to bulk infrastructure
for upgrading and refurbishment to enable the system to take additional load. I
would encourage the municipality to continue working together with the DME and
Eskom to ensure that we reach universal access as we have promised our
people.

On the mining front, the Eastern Cape is a poor region as far as the scope
for the development of large mines is concerned. Mineral occurrence is mostly
limited to the so-called construction materials. Most mining activities in the
region and in Nelson Mandela Bay Metro particularly, can be classified as small
scale with construction materials as target minerals. The exception is salt
which is being mined from the sea by two of the bigger suppliers in the
country. There are 13 Old Order Mining Rights in the Uitenhage area whose
applications for conversion to rights in terms of the Mining and Petroleum
Resources Development Act (MPRDA) are expected before 30 April 2009. I trust
they have incorporated Black Economic Empowerment in their conversion
applications.

In conclusion, let me take this opportunity to thank the organisers of this
information session, particularly the officials from NAFCOC for organising this
session. To my officials, imparting of information is a service that is
required of us. To the participants, I would like to appeal to you to take this
opportunity with both hands and learn as much as you can, so that when you
leave here, you are empowered to firm-up up your business plans to take
advantage of business opportunities in the Coega Industrial Development
Zone.

Remember, that if you do not take advantage of the opportunities that exist
in your backyard, somebody will. I am sure that NAFCOC will monitor the
progress of all of you after today and in the future. Let this be the beginning
of a continuous engagement between your organisation and us, aimed at improving
the lives of all our compatriots particularly the indigent.

I thank you.

Issued by: Department of Minerals and Energy
4 march 2009