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March 20, 2008

Australian company makes soya-based biodiesel investment in South Africa

Australian-owned firm Rainbow Nation Renewable Fuels (RNRF) was in the "final stages" of applying for a licence from the South African government to produce 288-million litres a year of biodiesel from a R1,5-billion plant it was building at Coega in the Eastern Cape, it said this week.

The plant would be the biggest in Africa, using one-million tons of soybeans to produce 250 000 tonnes of soybean oil and 800 000 tonnes of animal feed.

It would use a portion of the oil to produce the biodiesel, provided it received a licence to do so from the Department of Minerals and Energy.

RNRF MD Geoff Mordt said that the company had already secured the 48 MW of power it required to run the plant, to be commissioned late 2009.

Initially, the bulk of the plant's soybean feedstock would come from abroad, with South Africa's current production at some 300 000 t/y, but Mordt said that the plant will support local commercial and small-scale farmers to grow the country's production.

He added that within five years, the company targeted sourcing nearly 100% of the soybean feedstock from South Africa.

RNRF had yet to conclude the sale of a stake in the company to a black-owned company, required by South African law.

The operation would create 350 new direct permanent jobs, and 725 indirect jobs, the company said in a statement.

RNRF's biggest shareholder is Australia-based National Biofuels Group.

Engineering News

AGRO-PROCESSING in the Eastern Cape received a major boost with the announcement of a R1.5billion bio-fuels processing plant.
The plant – to be located in the Coega Industrial Development Zone – is expected to commence production of bio-diesel and pharmaceutical glycerine from soya beans from South Africa and abroad in the last half of 2009.
The Rainbow Nation Renewable Fuels Ltd (RNRF) project is expected to generate R4.5 billion in turnover annually and create 350 new permanent jobs.
An additional 725 employment opportunities in related sectors and 800 jobs during the construction phase are also expected to be created.
RNRF managing director, Geoff Mordt said the investment would provide a significant boost to the South African and Eastern Cape economies. “We currently are involved with farmer co-operatives for the supply of soya beans and we will offer technical expertise to emerging farmers,” said Mordt.
The facility will consume one million tons of soya beans annually, providing consistent local demand for SA farmers. Mordt said 30000 tons of soya beans are expected to come from the Eastern Cape in the first year, and 3000 from other parts of SA, while the balance of the 800000 tons required will be imported initially.
The investment is in line with Asgisa – the provincial government Accelerated and Shared Growth Initiative of SA scheme – which relies heavily on biofuel production from grains, including soya and canola.
Mordt allayed fears that bio-fuels was a threat to food security. “Soya beans are an ideal bio-diesel feedstock in SA, helping to ensure the nation’s food security.
“Growth of the local soya bean industry will strengthen local agriculture and rural development, adding a key source of protein to the human food chain as well as providing a sustainable feedstock for premium quality bio-diesel,” said Mordt.
Mordt said markets are opening up for the use of bio-diesels in the transport and mining sector, with the latter exploring alternative energy sources as the electricity crisis has required it to cut power by 10 percent.
He said RNRF was already in “high-level” negotiations with end-users in mining and transport. Licensing negotiations with the government was in the final stages.
However, he added: “We are looking at other agricultural businesses and commercial farmers throughout the country. RNRF is committed to empowering historically disadvantaged South Africans by allocating 26% of equity in the company to Broad-Based Black Economic Empowerment Entities,” said Mordt.
Chief executive Dr John Purchase, of the Agricultural Business Chamber (ABC), said the bulk of the soya feedstock will initially be imported but added that there were market opportunities for “farmers of all races” when production commences. “This initiative and investment in the broader agricultural sector and agri-business, as well as renewable fuels sector, is indicative of the excellent opportunities that agriculture and the fledgling South African renewable fuels industry offer.”
Coega business development executive Khwezi Tiya said economic spin-offs expected were in line with the Coega Development Corporation’s strategic objectives of advancing socio-economic development and transformation in the EC.
The announcement came a day before Coega launches a national marketing initiative aimed at promoting itself as a strategic location for expanding SA companies.
The campaign is scheduled to start in Johannesburg today.
Daily Dispatch
WIDESPREAD benefits, ranging from the creation of farm jobs in rural areas to the production of an alternative fuel, were promised yesterday at the announcement of plans for a R1,5-billion soya bean plant at the Coega Development Corporation industrial development zone.
The Rainbow Nation Renewable Fuels Limited (RNRF) announcement came as a welcome development for the IDZ after Rio Tinto-Alcan said last week that its planned R21-billion aluminium smelter would be delayed because of doubts over Eskom‘s ability to supply power.
Rainbow, whose head office is in Australia, said its plant – planned to be up and running by the end of next year – would process the beans to produce meal and oil. It also said it would develop capacity to process the soya bean oil into biodiesel and pharmaceutical glycerine.
The investment will create about 400 permanent jobs, and an estimated 800 during the construction phase, according to executives. A further 725 jobs will be created by manufacturing industries related to the plant.
Managing director Geoff Mordt said South African soya bean farmers, and especially existing and potential growers in the rural Eastern Cape, stood to reap enormous rewards from the business. “South African soya bean farmers and livestock industries such as poultry, pork, dairy, beef, and aquaculture producers stand to reap enormous rewards.
“The facility will consume one million tons of soya beans annually, providing a consistent local demand that South African farmers can rely on year after year,” he said.
In turn, the company would produce about 800000 tons of soya bean meal, which is used mainly by farmers as feed. “Our local facility‘s soya bean meal production will help improve the nation‘s balance of payments. South African imports of soya bean meal reached 812000 tons last year,” said Mordt.
Talks were already under way with farmers, agricultural co-operatives and emerging farmer groups to increase the local supply of soya beans, he said.
In addition, Mordt said, increasing local production of soya bean meal fell in line with the government‘s policy on food security. “Growth of the local soya bean industry will strengthen local agriculture and rural development, adding a key source of protein to the human food chain.”
Agriculture MEC Gugile Nkwinti said there was no better way to welcome RNRF‘s investment than to ensure that local farmers, in particular those in rural areas, were the primary suppliers of high-quality soya beans.
“We expect that rural-based co-operatives will sign off agreements with RNRF and therefore benefit directly from this initiative. More business opportunities are expected to emerge from the value chain activities linked to the biofuels industry,” he said.
Simpiwe Somdyala, chief executive of Asgisa Eastern Cape, said his office, RNRF and district municipalities would develop comprehensive support and mentorship programmes for emerging farmers and co-operatives.
CDC business development manager Khwezi Tiya said the project “is expected to create upstream and downstream opportunities which will mostly benefit the agricultural sector”.
In due course, Mordt said, the company would announce its empowerment partners, who would acquire 26 per cent of RNRF.
The Herald - SA
WILL the soya beans for the proposed new Coega soya processing plant come from a sustainable source – and how much will the South African government be funding the project?
Those are the two main questions from the Third World Investment Gateway (Twig), an East Londonbased agricultural and environmental activist group which was contacted yesterday for comment on the R1,5- billion Rainbow Nation Renewable Fuels project.
The project envisages a facility that will process soya into meal and oil and then use this to make biodiesel and glycerine.
Twig founder Mark Wells said his understanding was that a similar facility in the East London IDZ was already consuming a large amount of soya and there was no surplus soya available in the country, let alone the estimated two million hectares a year needed to supply the Coega plant.
If this was the case and it was necessary to import soya beans then exactly where they would come from was important, he said. “In Europe, right now, there is a move from governments and NGOs to put a moratorium on biofuels because large tracts of virgin bush in developing countries are being flattened to grow the feed stock. The Amazon in Brazil is of particular concern.”
Most of the soya grown around the world was also genetically modified (GM) and 70 per cent of these GM crops were Roundup-ready, engineered to grow only with Roundup pesticide. Twig quoted World Health Organisation studies which show that Roundup contaminates the soil so farmers who agree to use it cannot revert to other cropping. It could also enter plant, animal and human systems, damaging reproductive and immune systems, Wells said.
“Right now we are trying to develop a fish farm at Mooiplaas and one requirement is our feed must not include soya from Roundup-ready crops.
“When we consider this new Coega project, I think we should demand to know exactly where the source feed is going to come from and if it was planted and farmed in an environmentally sustainable manner.”
Even if Roundup was not used soya bean farming usually relied heavily on fertilisers and herbicides and heavy equipment to plant, harvest and transport. “Fertilisers and herbicides are by-products of the oil industry which necessitates the burning of a fossil fuel. So, when we consider that one of the goals of this project is to produce biodiesel, in search of a cleaner more sustainable fuel option – we need to think about the energy balance.”
Wells said the project should detail up front who was funding it. “Will the government commit millions of taxpayers‘ rands to kick-start a project?”
Twig was also calling for clarity on where the biodiesel would be supplied to, he said. “If it is going to be shipped out of South Africa and the source feed is being imported, then this will be another case of us giving over our dwindling supply of cheap electricity and not getting anything out of the project.”

The Herald

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