Lesotho plans to build a R400m Cement Plant
Lesotho plans to build a R400m cement plant producing 200‚000 tons a year to supply the cement needs for construction of the dams and houses for the second phase of the LHWP.
Lesotho plans to build a R400m cement plant producing 200‚000 tons a year to supply the cement needs for construction of the dams and houses for the second phase of the Lesotho Highlands Water Project (LHWP)‚ Lesotho National Development Corporation (LNDC) CEO Joshua Setipa says.
“We are keen on getting phase 2 going as that would stimulate demand and provide much-needed infrastructure‚” Setipa says.
“The 2008 global financial crisis hurt Lesotho‚ with many job losses as demand in our export destinations dropped off. We are now close to the pre-2008 levels in clothing and textile exports in volume terms and have exceeded the 2008 level in value terms‚” he says.
“What we are looking for is to leverage the demand arising from phase 2 construction activity to build a cement factory in Lesotho so that we no longer remain dependent on South African cement. That holds true for a range of products that will initially benefit from phase 2 activity and then continue for decades to come.”
Lesotho has begun talks with major cement producers about the possibility of building a R400m cement plant that would satisfy Lesotho’s normal annual cement consumption of 200‚000 tons.
The Chilanga cement factory in Zambia was built in the late 1950s to supply the cement needs of the major Kariba dam‚ and more than 50 years later it still supplies Zambia’s cement needs.
The LNDC functions like SA’s Industrial Development Corporation‚ providing finance such as loan guarantees and expert advice for both foreign direct investment (of which about 80% originates in SA) and domestic investment. Where necessary‚ it will take an equity stake to mitigate risk.
The LNDC seeks to use Lesotho’s competitive advantages such as its high altitude and cool climate‚ but Setipa is well aware that the landlocked country would be uncompetitive in bulk commodities‚ where having a port is a prerequisite.
He says it costs twice as much to ship a container from Port Elizabeth to Maseru as it costs to ship it from Port Elizabeth to New York. “That is why we focus on high value goods and where we can use our natural advantages.
“If you take trout for instance‚ we can produce 12 months of the year‚ whereas in SA it is only two or three months before it becomes too warm for the fish. That is why we produce around triple the volume SA does‚” he says.
Water-stressed SA has for decades sought ways to supplement the natural water of Gauteng‚ the industrial heartland. Feasibility studies undertaken in the 1950s showed the water supplied by gravity feed from Lesotho was more economically viable than trying to pump water from the lower-lying Orange River to high-altitude Gauteng.
Droughts in 1983 and 1985 brought home how dire the need was‚ with water having to be pumped from the Vaal River to Mpumalanga’s coal-fired power stations‚ and a treaty between Lesotho and SA was signed in 1986.
The original treaty envisaged several phases but so far only phase 1A (the Katse Dam and water transfer tunnel to SA) and phase 1B (the Mohale Dam and water transfer tunnel to Katse) have been completed.
The infrastructure to build the Katse Dam‚ such as roads‚ made a huge impact in opening the less accessible Highlands area and a similar impact is expected from phase 2. That should help to stimulate smallholder farming activity in such high-value goods such as asparagus and organic vegetables.
The LNDC would help by providing access to credit for farming inputs such as seed and fertilisers and would also provide support services such as crop insurance and marketing.
Helmo Preuss was hosted in Lesotho by the Lesotho Highlands Development Authority.
