KATHU INDUSTRIAL PARK


PROJECT LOCATION

District: Gamagara Local Municipality
City/town: Kathu
Physical address: Farm Sekgame, 461 Kuruman Road
GPS coordinates: S27° 42’ 52.5” E23° 02’ 33.8”

INVESTMENT VALUE

Total Project Cost: R1.5-billion (pending Phase 2-3 business model and timing)
Phase 1 estimate: R530m

PARTNERSHIPS
• Private Sector • Industrial Development Corporation • Provincial government • Local government


PROJECT NAME AND BACKGROUND
Kathu Industrial Park: The Sishen Iron Ore Company (Pty) Ltd (SIOC) and the Industrial Development Corporation (IDC) have funded various studies to assess the feasibility of developing an industrial park to stimulate sustainable long-term economic development for the Northern Cape region. The envisaged development will attract a variety of tenants delivering industrial goods and services within a synergistic environment supported by centralised services and complemented by a business incubation and training complex.With the mining industry being the largest real economic sector in the Northern Cape economy (based on contribution to GDP), the town of Kathu – located in the Gamagara Local Municipality (GLM) – is the preferred location due to its central proximity to the Postmasburg-Hotazel iron-ore/manganese belt and various established and pending REIPPPP projects. It is envisaged that the Kathu Industrial Park (KIP) serve as a catalyst for accelerated growth of other economic sectors. The bankability study has not only confirmed extensive interest from businesses with a vested interest in the Northern Cape region (ie potential tenants), but has also confirmed the support of various key stakeholders as well as the commitment of investors and financiers. This development, located on the R380, is easily accessible from the N14 – a major service route between Johannesburg, the West Coast of South Africa and Botswana – and the Kathu airport. The study process has included an assessment of infrastructural requirements and has confirmed integration with GLM planning.



TARGETED SECTORS

The KIP targets all economic sectors requiring serviced industrial space in the region, but with the major portion of the initial tenant makeup (study phase uptake) primarily serving the established mining sector, by virtue of the KIP’s central proximity to the Postmasburg-Hotazel iron-ore/manganese belt. The KIP is also well positioned to serve the emerging REIPP sector in the region. In addition to the ongoing development of business opportunities within the tenant supply chains, it will be the role of the KIP business incubator to expand coverage of the KIP into other sectors. Study phase tenant engagement and commitment to the project has covered all possible prospective tenants, regardless of size or level of development. The KIP development caters for every kind of tenant facilities, from large customised facilities through to smaller economically efficient mini-factories.

DESCRIPTION OF THE PROJECT
The KIP development comprises the following:
• Central Hub: This will comprise various facilities and the associated infrastructure network supporting KIP management structures. The scope of facilities is envisaged to include: central administration offices, conferencing facilities, an auditorium, a security office, a restaurant and other social facilities. These are to be located in a hub within the park, ie a centrally located single-level building, with visitors parking and appropriate landscaping
• A Business Incubation Centre and Training Centre
• Customised warehouses and industrial buildings and (standard specification) mini-factories
• Security fencing and lighting
• Additional infrastructure envisaged for the functionality of the KIP includes: internal roads (tarred and paved), storm-water systems and an internal water reticulation system

PROJECT FINANCED BY

Phase 1 (R530m): R410m debt and equity commitment provisionally secured from private sector (mining stakeholders) and public sector (IDC). Engagement is ongoing with Northern Cape Provincial Government and Department of Trade, Industry and Competition (dtic) to resolve funding shortfall and crowd out IDC equity investment. Phase 2-3: Current indication is that tenant uptake surplus to Phase 1 will support a further phase of at least R500m but with this position likely to increase substantially once project is launched and also subject to the nature of further demand (ie rental vs ownership options).

PROJECT STATUS

Bankability Study, Project Development Plan, Environmental Permitting, Land Re-zoning and various scope re-alignment and market studies completed. Investor Engagement Phase substantively completed (including investor term sheets and KIP formational agreements), with provisional commitment secured from IDC, Kumba, SIOC-CDT, Assmang and South32, but with a funding shortfall of R120m still to be resolved prior to concluding KIP Formation and undertaking Phase 1 design development.

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