News

Nica Richards
Deputy online news editor
3 minute read
19 Nov 2021
6:25 pm

China ditches controversial Limpopo coal plant plans

Nica Richards

The two biggest Chinese investors in the project jointly committed to investing over $9 billion in a brand new coal plant in Limpopo.

At least 20 industrial plants for processes including coking, coal washing, a coking plant, ferrochrome, ferromanganese and stainless steel, lime and cement plants, would all have been powered by the 3GW coal-fired station. Photo for illustration: iStock

The government of the People’s Republic of China will no longer be funding a planned 3 gigawatt (GW) coal-fired power plant scheduled to be built in Limpopo. 

The news was confirmed by South African fossil fuel disinvestment campaign Fossil Free South Africa earlier this month. 

The new coal plant was set to be built in the upcoming Musina-Makhado Special Economic Zone (MM-SEZ), and involved a number of Chinese institutions. The development was first announced by President Cyril Ramaphosa on his return from the Forum for Africa and China Cooperation in 2018. 

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The two biggest investors in the project, China Huadian Hong Kong Company and Power China International Group, jointly committed to investing over $9 billion.

But in September this year, at a United Nations address, Chinese Premier Xi Jinping announced China would end all funding of overseas coal projects. 

On 9 November, Fossil Free South Africa received a letter from Chinese ambassador to South Africa Chen Xiaodong, who confirmed China “will not build new coal-fired projects abroad”. 

“China is willing to work with all countries, South Africa included, to establish and improve a green and circular economic system development system [and] green and low-carbon energy.”

The news was welcomed by Fossil Free South African coordinator David Le Page. 

“We are delighted China is following through on its ground-breaking commitment to end overseas coal financing by cancelling plans for the ill-conceived Musina-Makhado SEZ 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.”

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Controversy from the start 

At least 20 industrial plants for processes including coking, coal washing, a coking plant, ferrochrome, ferromanganese and stainless steel, lime and cement plants, would all have been powered by the 3GW coal-fired station. 

All processes are notorious greenhouse gas emitters, which would have directly opposed South Africa’s integrated resource plans. Going ahead with such a project would also have made it impossible for the country to meet international greenhouse gas emission reduction standards, Fossil Fuels South Africa said. 

The MM-SEZ, which would be the country’s largest special economic zone, would also have been the first to be run by a foreign operator, not a local one. 

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Fossil Free South Africa also revealed that the foreign operator in question is Chinese company Shenzhen Hoi Mor Resources.

Its CEO, Yat Hoi Ning, is on an Interpol watch list, after being accused of ripping off a mining company of millions of dollars. 

Despite this, however, the investment was still approved by Ramaphosa and the Department of Trade and Industry. 

And, due to the fossil fuel-heavy nature of the power plant, public consultations were limited and elusive. 

The nature of the 8,000 hectare MM-SEZ site location itself is less than ideal, as it covers precious wetlands and baobab forests, and is in an already water-stressed and vulnerable area. 

Going ahead with the project would therefore have exacerbated already threatened communities and vital resources, which would likely have been affected by associated toxic waste emissions.