Finance and Economic Opportunities
Question by:
Hon Cayla Murray
Answered by:
Hon Mireille Wenger
Question Number:
11
Question Body:
- How will the memorandum of understanding (MOU) between the Freeport Saldanha Industrial Development Zone and Sasol contribute to the economy of the (i) Saldanha area and (ii) province as a whole, (b) what are the timelines associated with the MOU and (c) what financial costs are associated with the implementation of this MOU?
Answer Body:
I have been advised the following:
- The Saldanha Bay area is a strong strategic fit with Sasol's ambition to be a leading driver and contributor to the development of South Africa’s green hydrogen economy. To facilitate the development of a green hydrogen hub in Saldanha Bay, Freeport Saldanha has signed a memorandum of understanding (MOU) with Sasol, whilst Sasol and ArcelorMittal have signed a joint project development agreement to look at the re-invigoration of the Saldanha steel plant.
- The Saldanha area is not quantified in detail yet, as the prefeasibility studies are still in progress and no project value and job estimates are available yet, specifically for the Sasol project. It needs to be considered that these are industrial mega-projects and likely capex investment will be R10bn +. For AMSA the impact is more quantifiable, as AMSA stated earlier that the revitalization of the plant (based on scrap metal inputs) could recover more than 600 of the 1000 direct jobs lost when the plant was placed under care and maintenance in 2020.
- The Western Cape opportunity is still a matter of detailed investigation, however the indications from international studies are that the overall green hydrogen opportunity is very significant. According to the recently published World Bank Country Climate and Development Reports, published early November 2022, promoting green hydrogen exports could add another 6 percent to the South African GDP by 2050. However, the technology is still in its infancy, and promoting the production of green hydrogen will require even more investments in renewable energy. References: https://www.news24.com/fin24/climate_future/news/sas-growth-rate-would-expand-if-it-moves-away-from-coal-world-bank-20221101, https://www.worldbank.org/en/publication/country-climate-development-reports
(b) The MOU between Sasol and Freeport Saldanha is valid for 5 years.
(c) I am advised by the Department that no financial obligations are placed on Freeport Saldanha in terms of the MOU.
Date:
Friday, October 28, 2022
