‘Private sector must invest in infrastructure’

If companies want to capitalise on the opportunities presented across Africa they will have to invest in supporting infrastructure, says Grindrod Freight Services (Ports & Terminals) CEO Dave Rennie. “The outlook for Africa is extremely positive as the demand for commodities will continue to increase. Africa has the highest concentration of minerals in the world and countries such as China and India are looking to diversify their source for imported commodities. Australia, Brazil, Chile and China show the highest depletion of minerals in the world.” Rennie says to capitalise on these opportunities, addressing the challenges the continent faces is crucial. “The lack of rail networks and roads from remote areas in Africa where the mineral reserves are found poses the biggest challenge at present. It is important that we invest in infrastructure if we want to benefit from the opportunities.” In this regard the transformational capital expenditure programme, which will require in excess of R10 billion over the next five years, will result in substantial investment in Grindrod’s strategically positioned ports and terminals capacity, in particular phase 4 of the Maputo Coal Terminal, he said. “To accelerate the group’s pipeline of strategic capital projects in southern Africa, Grindrod and Remgro entered into an agreement to inject R2 billion capital into the business by way of specific issue of new ordinary shares.” As global demand for iron ore is expected to double over the next 15 years and consumption is expected to exceed 1.7 billion tons by 2015, there are major opportunities across Africa in getting these and other commodities from pit to port, he said. Although there is already deficit in the supply of iron ore, despite an expected production boost by Vale, Rio Tinto and BHP Billiton, Africa’s contribution will also have to increase. China, both the biggest producer and importer of iron ore, is making significant investments in Africa, said Rennie. “The global seaborne shipment of coal was 940 million tons in 2010 and is expected to grow to 1 350 million tons in 2014,” he said. “Africa needs infrastructure investment to be able to deliver on these capacities.”