Mbabane: King Mbandzeni, also known as Dlamini IV, Umbandine or Umbandeen ruled Swaziland (Eswatini) from 1875 until 1889.
History has it that during his kingship, King Mbandzeni, granted many mining, farming, trading and administrative concessions to white settlers from Britain and the Transvaal just for bottles of Scottish’s best whiskies and gin. These concessions granted with the help of Offy Sherpstone eventually led to the conventions of 1884 and 1894, which reduced the overall borders of Eswatini. King Mbandzeni might be gone but His Majesty King Mswati III’s Government appears to be in a mission to relive his (King Mbandzeni’s) unpopular decision- giving white settlers lucrative concessions which cost the country dearly for almost nothing. With Eswatini Government’s recently publicised intentions of giving in to the proposal of the Indonesia Government’s expression of interest in supporting Eswatini build her section of the multibillion Lothair – Sidvokodvo Rail Link Project.
Local dailies – Times of Eswatini and Swazi Observer, reported In October 2019 that Eswatini would repay Indonesia with the iron ore at Ngwenya, adding that it is a win-win proposal that was submitted by the Indonesia Minister of Trade, Enggartiasto Lukita, during talks with Commerce Industry and Trade Minister Manqoba Khumalo on Saturday.
Should this proposed deal goes ahead, Eswatini could lose more to the Indonesians just like what happened when King Mbandzeni gave the mining concessions to the white settlers. According to a latest study compiled by the Ministry of Natural Resources and Energy’s Geological Survey and Mines Department, which Independent News has seen, there are 190 197 557 million tonnes at Ngwenya. Of these tonnes, 26 million are the dumps which were left uncleared by Salgaocar Swaziland and there are about 164 197 557 mineable tonnes of iron ore at Ngwenya, which brings the total tonnage to over 190 million.
Using the latest iron ore prices in world markets, a tonne averages at E1 854.47 (U$125.77). The exchange rate used here was correct as at Tuesday, October 22. Mathematically, the worth of iron ore available at Ngwenya Mine is E352 715 billion, provided we are using the current price. In sharp contrast, the proposed Lothair-Sidvokodvo rail line was projected to cost government E20 billion. These were projections made about six years ago.
Based on the Indonesia Government proposal to Eswatini Government, it means the former would invest more or less than E20 billion and then benefit over E350 billion. This then beats the impression presented by Indonesia Government and paradoxically accepted by Eswatini Government through minister Khumalo that they were looking for a win-win situation.
Firming up the possibility of an iron ore trade deal that might see Eswatini becoming the biggest loser was minister Khumalo’s assertion that the proposal will now form part of further engagements proposed by himself and his counterpart that will see the two countries signing a cooperative agreement. Notably, Indonesia is reportedly also emphasising beneficiation by seeking to ban the export of iron ore effective January 2020.
Minister Khumalo supposedly said they spoke strongly about iron ore during their engagement with their counterparts which was preceded by a meeting with the Indonesia Chamber of Commerce. He said Indonesia had a State owned enterprise almost similar to Eswatini Railway.
This enterprise has grown to such an extent that they are doing rail projects internationally so they are eager to help with our rail project. What they are looking for is a win-win situation where they could construct our rail project and we then use that rail line to transport the iron ore which is in great demand here,” Khumalo was quoted as saying.
According to both the Times of Eswatini and Swazi Observer reports, Khumalo went on to say that the iron ore would be used to offset the cost of constructing the Eswatini section of the Rail Link Project.
“However, I emphasised that we wish to develop a smelter at Ngwenya to make steel as value addition to our natural resource. They were amenable to that as long as there would be mutual benefit to both parties,” Khumalo said.
It was also reported that an invitation has been extended to Indonesia Chamber of Commerce to send a business delegation to Eswatini across the different sectors discussed which include infrastructure development, textile and iron ore mining. Again, minister Khumalo disclosed that a cooperation agreement between Chamber of Commerce of Indonesia and Business Eswatini, adding that they started working on the agreement way before coming to Indonesia through Business Eswatini.
Additionally, minister Khumalo and Eswatini Investment Promotion Authority (EIPA) Sibane Mngomezulu were hosted to a Trade to a Trade and Investment Expo by his counterpart – Enggartiasto Lukita. It was reported that the meeting reiterated the discussions with the Chamber of Commerce, but was escalated to a government level that raised the need for an economic cooperation agreement between the two countries.
An official from Eswatini Railways who commented on condition of anonymity because he is not mandated confirmed to Independent News that the projected cost of the on the cards rail link was E20 billion, adding that the move by Indonesia invest in the project in exchange for iron ore at Ngwenya. In his view, Eswatini stands to benefit more from the imminent deal as there would be more jobs that could be generated during construction up until the operationalization. “In my opinion, this would be a win-win situation and Eswatini could benefit more because the investment could create jobs for a long term, meanwhile Indonesia’s benefits could be short-term because mine have life spans,” the official said.
Other than, iron ore, Eswatini had been found to be denying emaSwati 2 800 direct jobs which could subsequently benefit over 19 700 people by not giving interested investors licences to mine coal. This is despite a high youth unemployment rate of 44.15 per cent and a national unemployment rate of 22.5 per cent. As defined by the International Labour Organization, “unemployed workers” are those who are currently not working but are willing and able to work for pay, currently available to work, and have actively searched for work.
According to a report compiled by the Ministry of Natural Resources and Energy’s Geological Survey and Mines Department, Eswatini has 143 million tons of mineable coal deposits, which are currently unexplored. Areas with coal deposits in the country are Mhlume (Area 1, Area 2-Mpaka, Area 3 –Sumcor), Maloma and Lubhuku.
According to the report, the mineable but unexplored coal deposits can be mined over a period of 205 years combined. Independent News has established that there are investors who are busy on the ground trying to get a mining licence.
The delay in exploration of coal is slowly but surely rendering the valuable stones worthless. With the United Nations Climate Action pushing for countries to reduce fossil fuel emissions by 2020 and reach the ambitious target of carbon neutrality by 2050. Under the Paris climate agreement, countries are expected to commit by 2020 to more aggressive climate plans, known as nationally determined contributions (NDCs), than those they set in 2015 when the agreement was signed.
The push by the UN for carbon neutrality will definitely renders the unexplored coal a worthless mineral more so because the price will drastically fall as markets would no longer be interested to buy. According to the Geological Survey and Mines Department report, Eswatini’s washed coal from Mpaka Mine, which is found within the Area 2 coal deposit was successfully sold to Kenya where it was used for cement manufacturing. Some coal consignments from Mpaka Mine were sent to the Asian markets (Japan, South Korea, etc.) where it was used for manufacturing smokeless briquettes for domestic heating and cooking. The bulk of the coal could be used for electricity power generation.