Investing in Limpopo province

Diverse mining operations – platinum, diamonds, coal, chrome, copper – contribute more than a quarter of Limpopo’s provincial gross domestic product. The area is also a major electricity generator.

Agroprocessing is a growing industry in Limpopo, thanks to the province's long-established farming sector. (Image: Brand South Africa)
Agroprocessing is a growing industry in Limpopo, thanks to the province’s long-established farming sector. (Image: Brand South Africa)

John Young

Limpopo is strategically located near to the economic heartland of South Africa (Johannesburg is 300km from Polokwane), and on the N1 highway connecting South Africa to its neighbours in the Southern African Development Community to the north through Zimbabwe.

Polokwane, the provincial capital, has an international airport and there are a further two regional airports at Hoedspruit and Phalaborwa. The rail network is mostly devoted to getting the products of the province’s many mines to the coast.

Limpopo province’s landmass of 125 755km accounts for 10.3% of South Africa, and the provincial population of 5.5 million represents 10.4% of the national population.

As a largely rural province, Limpopo’s contribution to national gross domestic product (GDP) is a respectable 7.2% but, as the National Development Agency wrote in 2009, “much more still needs to be done to improve the quality of life” for many of the poor people living in the province. This remains true today.

Good news for the province came from the public entity, Trade and Investment Limpopo (TIL). As of January 2012, TIL reported tracked investment into the province of R7.8-billion, including:

  • R1.2-billion in foreign direct investment
  • R1.5-billion in local investment
  • R200-million in expansions
  • R4.8-billion in capital expenditure by government

A further R1-billion of investment was retained in the province because TIL intervened to resolve issues relating to water and power services.

Companies already successfully established in Limpopo include Samancor (silicon smelting), Eskom (electricity generation), Granor Passi (fruit juices), Bonanza (furniture making), Kanhym (meat processing) and ArcelorMittal (steel).

Manufacturing

Manufacturing in the province is centred on mining areas (smelters and refineries), agricultural estates (juices and concentrates) and Polokwane (which has a strong suit in food and beverages). Coal and platinum mining are the two components of the prominent mining sector that have the greatest potential for growth.

Mining

Mining contributes 27% to provincial gross domestic product (GDP).

Within Limpopo, approximately 400 prospecting and mining licences have been granted across a wide range of minerals. These include the largest diamond mine in South Africa, the biggest copper mine in South Africa, the biggest open-pit platinum mine in the country and the biggest vermiculite mine in the world.

The province has 41% of South Africa’s platinum group metals (PGMs), 90% of South Africa’s red-granite resources and approximately 50% of the country’s coal reserves. Antimony, a highly strategic mineral found in large quantities in China, is another of Limpopo’s major assets.

Major projects

Two of the largest engineering projects in the history of South Africa are nearing completion in Limpopo, and have the potential to boost the region’s economy enormously. The power station at Medupi will add 4 764 megawatts to the national grid and has already given the local economy of Lephalale a massive boost.

The huge De Hoop Dam, which forms part of the Olifants River Water Resources Development Project (ORWRDP), is vital to the province’s future. Access to water is one of the key elements in any discussion of economic growth in Limpopo Province, especially as the mining and agricultural sectors are so important. In terms of the ORWRDP, some 23 platinum mines stand to benefit.

Agriculture

In agricultural terms, Limpopo is very rich. Vast quantities of fruit and vegetables are exported from the province. Almost every kind of subtropical fruit flourishes in the eastern half of the province.

Abundant fields of avocados, mangos, paw-paws, litchis and tomatoes stretch as far as the eye can see. Cotton and potatoes are other major products, while citrus and tea plantations are prevalent in the central and northern areas.

Livestock raising and hunting are carried out in the drier western and northern regions. Several livestock farms have been converted to private game farms in recent years, mirroring a national trend.

Regions

Limpopo has five district municipalities:

Capricorn District

Capricorn is the economic centre of Limpopo, with the provincial capital Polokwane contributing 13% of the provincial GDP. Polokwane has a number of manufacturing concerns. The Zebediela Citrus Estate is one of the biggest citrus estates in South Africa, and the cultivation of potatoes and tomatoes is done on a large scale in the district.

Greater Sekhukhune District

Government is the largest employer in this southern district, followed by agriculture and hunting. The vast majority of households are rural (94%), with a poverty rate of 69.9%. Groblersdal is the district capital.

The region’s fertile lands produce maize, tobacco, peanuts, vegetables, sunflower seeds and cotton on a large scale. Agriculture makes up 25% of the local economy, with the value of the region’s gross production estimated at R250-million. Burgersfort is an important town because of platinum mining.

Mopani District

Giyani is the administrative capital of the district and is key to the local economy. The public sector is one of the largest employers in the district. The key sectors are agriculture and mining.

Mopani has an established food manufacturing industry, in canned, preserved and dried-fruit production and vegetable juices. Phalaborwa is the gateway to the Kruger National Park. It has a good airport and is a tourism hub. Palaborwa Mining Company (Palamin) is the major economic driving force in the area.

State-owned phosphate and phosphoric acid producer Foskor is another major employer. Sasol Nitro Phalaborwa produces phosphoric acid and deflourinated acid. The Marula Festival is held in Phalaborwa in February every year.

A subtropical climate and fertile soils combine to make greater Tzaneen very productive in terms of fruit and vegetables. Limpopo’s second most populous city has a population of 80 000.

The Letaba Valley produces a large proportion of South Africa’s mangos, avocados and tomatoes. Forty sawmills operate in the area, drawing on the heavily forested hills around the city.

One of the major road links between Gauteng and the Kruger National Park also passes through the area, providing excellent links for tourism and business.

Vhembe District

The Vhembe District borders on both Zimbabwe and Botswana. The district’s administrative capital is Thohoyandou. Vhembe’s vast bushveld supports commercial and game farming and the district has considerable cultural and historical assets.

The major economic sector is agriculture, both in terms of commercial and subsistence farming. Game farming is a growing subsector, as is eco-tourism.

De Beers’ Venetia Mine, situated just west of Musina, is South Africa’s largest diamond producer. Situated in the north-east of the province, fairly close to the Punda Maria Gate of the Kruger National Park, Thohoyandou is the administrative centre of Thulamela Local Municipality, Vhembe District Municipality and the University of Venda.

The Tshivhase tea estates are not far from the town and a new project is cultivating exotic trees and ornamental shrubs.

The town is on the Ivory Route and hosts the Venda Cultural Museum. Other attractions include an ancient baobab tree, the Dzata Ruins, the Museum of the Drum, the mystical Lake Fundudzi and Nwanedi Provincial Park.

Waterberg District

The mining sector is the largest contributor to regional GDP, while agriculture is also significant. Several towns in the district are located in the mineral-rich Bushveld Igneous Complex.

The district also features the riches of the Waterberg Coal Fields, iron ore (at Thabazimbi) and tin and platinum at Mookgophong. The town of Lephalale is at the heart of the region’s coal-mining and power-generation sectors.

The area around Mokopane is one of the richest agricultural zones in South Africa, producing wheat, tobacco, cotton, beef, maize and peanuts.

The bubbling hot springs of Bela-Bela mark it as a popular tourism destination, and the district offers many luxury golf estates.

This is an edited version of an article published by Frontier Market Network. Republished here with kind permission.
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Reviewed September 2013