Bank of China helps fund newcomer to cement industry

Nedbank Capital and the Bank of China Johannesburg have jointly announced the raising of debt capital to fund a new entrant into the Southern African cement industry, namely Mamba Cement.

According to a statement on the Nedbank Capital website, this is one of the first pure limited recourse project finance deals undertaken and funded by Chinese entities on the African continent.

The equity required for the R1.1-billion project was provided by the Jidong Development Group (majority shareholder in the project), the China-Africa Development Fund and WIPHOLD.

“Mamba Cement will manufacture high quality pure cement with the capacity to produce very cost-effective products with a sustainable transport advantage due to its proximity to the major cement demand centres of Johannesburg, Pretoria, Mpumalanga, Rustenburg and Brits,” said Mike Peo, head of infrastructure, energy & telecommunications at Nedbank Capital.

Zhikun Qiu, chief executive at Bank of China Johannesburg, says the deal held particular appeal given the significant economic development potential it holds for southern Africa as a whole. “A new entrant will not only help to instill competition into the market, but also serve to stimulate economic growth and job creation in line with the country’s established development plans. The Bank of China is pleased to have been a key part of such an economically relevant initiative.”

When completed, the Mamba Cement project will have a capacity of more than one million tonnes per annum. Located at an established limestone deposit near Northam in Limpopo Province, Mamba Cement will produce and sell cement into the blended cements, readymix and construction industries across South Africa.