‘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.”