China won’t fund coal power for Musina-Makhado Special Economic Zone, ambassador confirms

The government of the People’s Republic of China has confirmed that it will no longer be funding a new 1 320MW to 3 300MW coal-fired power plant for the controversial planned Musina-Makhado Special Economic Zone (MMSEZ), which includes various heavy industries.

This follows the announcement by Chinese Premier Xi Jinping at the UN on 21 September that China would no longer finance new coal power abroad.

After Jinping’s pronouncement, David Le Page, the co-ordinator of Fossil Free SA, wondered about the implications of the announcement for the “giant, very dirty” coal-fired power plant proposed for the Chinese-financed MMSEZ.

He wrote to the Chinese embassy for confirmation that China would no longer be funding the project. His letter read: “We have been most encouraged by the recent announcement by President Xi Jinping stating that China will no longer be funding coal-fired power stations overseas.

“We applaud China’s ongoing commitment to harmony between humanity and nature; green transition and global sustainable development; social equity and justice; and a fair and equitable international governance system based on international law.”

Le Page noted that various Chinese institutions, including the Bank of China, have, until recently, been linked to the funding of coal power and mining developments for the MMSEZ.

In his letter, on 9 November, China’s ambassador to South Africa, Chen Xiaodong, confirmed that China “will not build new coal-fired projects abroad”.

Xiadong noted Le Page’s concern on the possible involvement of Chinese companies in the coal power development planned for the MMSEZ in Limpopo.

“As you mentioned … Chinese President Xi Jinping said at the general debate of the 76th session of the UN General Assembly that China will step up support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power abroad.

“The international community has spoken highly of China’s commitment and believes that this is another major step China has taken to actively promote the development of green and low-carbon energy, and that China has made new contributions to improving global environmental governance.”

China, Xiadong said, was willing to work with all countries, South Africa included, to establish and improve a green and low-carbon, circular economic development system “and vigorously support African countries, including South Africa, in developing green and low-carbon energy.”

He said his country would support Chinese and South African companies in enhancing investment co-operation in the field of green energy and to provide assistance within its capacity for South Africa’s response to climate change and the energy transition.

Le Page said: “We are delighted China is following through on its ground-breaking commitment to end overseas coal financing by cancelling plans for the ill-conceived MMSEZ coal-fired power station. 

“We hope that proposals for development in the area will proceed in a way that honours the rights of local communities and of labour, protects biodiversity and water resources, and are in line with South Africa’s Bill of Rights and international commitments to rapidly reduce and eliminate carbon emissions.”

Red flags for MMSEZ

According to Fossil Free South Africa, the “dirty energy project” was highly controversial from the start. “MMSEZ proposals had included at least 20 industrial plants for processes including coking, coal washing, a coking plant, ferrochrome and ferromanganese and stainless steel, and lime and cement plants, powered by a bespoke giant 3GW coal-fired power station. All these facilities would be very high emitters of greenhouse gases.”

It said the carbon emissions from a 3GW coal-fired plant and associated carbon-intensive industries have been omitted from South Africa’s integrated resource plan planning process, and will make it “impossible for South Africa to meet its international commitments on greenhouse gas emissions reductions”.

“It is the first special economic zone that will be run by a foreign operator and not by a South African [state-owned entity], in what would be the largest of South Africa’s 11 special economic zones. The foreign operator is the Chinese company Shenzhen Hoi Mor Resources. Its chief executive, Yat Hoi Ning, is on an Interpol watchlist — but was somehow still approved by the department of trade and industry.”

Public consultations, it said, have been limited and exclusive. “The 8000ha MMSEZ site, between Musina and Makhado municipalities, covers precious wetlands and baobab forests. The water demands of the project, in an already water-stressed and warming region, would profoundly threaten the water rights of vulnerable communities in the area.

“There are no viable proposals for the safe disposal of the massive amounts of toxic waste likely to be produced by these plants,” it said.

Most jobs in the MMSEZ, it said, will be too specialised to immediately benefit locals, and “the promised final job numbers have been highly inconsistent”.

Special economic zones around the world, said Le Page, generally “water down protection for labour”, whereas the right to strike and organise are guaranteed in the Bill of Rights. 

According to the Life After Coal campaign, the plan to construct a 3300MW coal-fired power plant, which forms the backbone of MMSEZ, would emit about one billion tonnes of CO2 greenhouse gas, taking up about 16% of South Africa’s carbon budget.

MMSEZ coal plant downscaled — final EIA

Earlier this month, the final environmental impact assessment (EIA) for site clearance was submitted to the Limpopo department of economic development, environment and tourism. 

It described how the objective of this special economic zone ultimately aims to create 53 800 jobs, “of which 95% will be local jobs”. The total capital investment is estimated to be about R247-billion. 

The assessment, prepared by the project’s new environmental consultants, EnviroXcellence Services, noted that the final master layout plan has been amended to reduce the overall footprint of the project to 3 862ha, “committing over 51% of the original site for conservation and ecological linkages”. 

It described how, for now, the best available energy sources are regarded as a “combination between renewable energy (for future administration buildings) and a scaled-down, independent, coal-fired power plant [1320MW]  … that will enable power generating capacity outside Eskom”, powered by ultra supercritical “clean coal”.

Le Page said, “there is no such thing as clean coal. To run any kind of carbon capture facility, you have to literally burn more coal to come up with the power to do that. Sasol has been looking at plans for so-called clean coal in South Africa, and they basically conceded that it’s completely uneconomic.” 

The assessment said that three main water supply projects and options are planned for the area. This includes the planned Mutasshi-Musina Corridor bulk water supply, “whereby at least 30-million cubic meters [of] water is planned to be transferred from the Zhove Dam”, located in Zimbabwe to South Africa; development of the Musina Dam; and access to groundwater. 

“It is understood that access to a dedicated water supply will need to be secured to allow for further development of the metallurgical hub of the MMSEZ south site.” 

Shavana Mushwana, the spokesperson for the MMSEZ, told the Mail & Guardian: “The Chinese development will not have any impact on the development of the MMSEZ power project. The development of the power station will still go on making use of green energy and technology supported by the Chinese investors.”

The decision by the Chinese, he said, has been a “blessing in disguise” because it has escalated the plans of the MMSEZ to “transition from a fossil fuel energy (coal fired power station) generator into a renewable energy generator.

“There are various sources of energy generation that will be considered to provide uninterrupted and cheaper energy to support the MMSEZ metallurgical complex and ensure security of supply. Upon conclusion of the investment agreement with our Chinese partners, a public announcement will be made thereafter.”

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Sheree Bega
Sheree Bega is an environment reporter at the Mail & Guardian.

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