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New plant planned in South Africa

World Cement,

In South Africa today, China’s Jidong Development Group and the China-Africa Development Fund (CADFund) have signed an MoU with Women Investment Portfolio Holdings (Wiphold) and Continental Cement (Conticem), a limestone mining firm. The MoU relates to the construction of a R1.65 billion cement plant to be located 85 km north of Brits in Limpopo.

The JV will be divided so that Jidong and CADFund hold 51%, Wiphold 23.9% and Conticem 25.1%. Construction of the 2500 tpd plant is set to begin in November, following the financial close of the deal in October. Once operational, the plant will provide some 170 jobs; during construction some 600 people will be employed. The cement produced is intended for the local market.

The plant’s 17 MW power requirement is to be met by utility provider Eskom if talks – which are already at an advanced stage – are completed successfully. Raw materials are on hand: Conticem’s deposit includes 81 million t of cement grade limestone and a further 120 million t of resources. The plant will be located adjacent to Conticem’s quarry. Commissioning is scheduled for 2012.

Market demand in South Africa has slowed in recent months, and Pretoria Portland Cement (PPC) has expressed concerns over the short term future of the local industry, as demand continues to decline. However, Conticem CEO Anton Weavind has said that he believes the market to be healthier than portrayed by PPC, and he is optimistic that demand will have normalized by the time the plant is ready to go online. Recent news from the EIB shows that infrastructure development in South Africa is still receiving financial backing, suggesting that there will still be a market for cement.

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