African governments see SEZs as a way to contain the harmful effects of the mining industry while retaining the economic benefits.
The mining industry plays a key role in the development of nearly all of South Africa’s SEZs. Several South African SEZs have been specifically created for the purpose of fostering innovation in the mining sector.
The Musina-Makhado Special Economic Zone in northern Limpopo will be home to a Chinese coal-fired steel refinery. Chinese companies locating in the zone will be allowed to benefit from South Africa’s industrial incentives. Conversely, the South African government hopes that the zone will help the country retain more of the steel supply chain domestically. Proponents hope that the project will create 11,000 jobs. Opponents worry about the project’s environmental impact and ties to the Chinese government.
Other South African zones like the Fetakgomo-Tubatse Industrial Hub also hope to primarily target the mining industry.
The government of Zimbabwe granted chrome and platinum miner Tharisa SEZ status on land where one of their mines was located. SEZ status means that Tharisa will receive reduced tax rates, duty-free importation of raw materials and equipment, and benefits from less strict currency exchange rules. AVZ minerals is attempting to receive a similar designation for its mines in the Democratic Republic of Congo. Other countries such as Senegal and Nigeria are creating new SEZ frameworks specifically targeting the mining industry.
The growing trend of creating mining-centric SEZs will play a major role in the African mining industry in years to come.