Zinc project team disbanded pending the signing up of a new technology partner
IN ONE of the strongest signals to date that the Billiton zinc refinery at Coega is under threat, the company has disbanded its zinc project team pending the signing up of a new technology partner.
With Japanese company Mitsui having pulled out Billiton has said that it is still interested in the project, but that it needs a technology partner. Negotiations are awaiting the passing of the industrial development zone legislation in parliament.
In the meantime there is little more for the team to do, so members have been assigned to other projects, but remain on call for Coega.
That call could be a long time coming.
While Finance Minister Trevor Manuel and his Trade and Industry counterpart Alec Erwin are said to have reached agreement on additional investment incentives, such as longer tax holidays and a shorter depreciation write-off period, the finance ministry is sticking to its Gear guns and insisting on these incentives being applied to greenfields projects only.
This has seen the somewhat ludicrous situation of neither Volkswagen nor Delta in the Eastern Cape qualifying for the full package of incentives despite multi-billion rand investments, purely because they were extending existing factories.
A rival like Daewoo would, however, qualify.
Eastern Cape Finance and Economic Affairs MEC Enoch Godongwana is fighting for an industry specific option, arguing that the Eastern Cape does not want new motor manufacturing companies to site themselves in the Province.
It does, however, want to encourage those in existence to restructure and expand with a specific view to exports.
Godongwana remains confident that the Coega development will happen, but does not expect construction to start this year - partly because of Billiton's search for a new technology partner.
He is, however, very upbeat about the prospects for the project that will flow from the counter-trade on offer in South Africa's military procurement programme.
An announcement has already been made of the R1-billion steel mill at Coega that is part of the counter-trade offer from the German consortium that is the favoured bidder for the supply of submarines.
BY ED RICHARDSON
