PPC plans Western Cape mega plant

PPC is planning to build a new large-capacity plant in the Western Cape, South Africa. The company is expected to make a formal announcement about the new works next year, according to Business Report.

Johan Claassen, interim CEO of PPC, said the company had decided to carry out a feasibility study on a larger-than-previously planned facility at its Riebeeck works.

The environmental impact assessment (EIA) of the previous project had been approved, but the revised scope of the new plant requires a new EIA to be submitted. "What has changed is that we thought at the time we would run De Hoek and Riebeeck. But the better way of doing it will be to build a bigger plant at Riebeeck and mothball De Hoek in the meantime. When you require De Hoek, you start it up again.

"That required a different size of plant and that is why we are in the EIA phase right now," he said.
The new plant would use about 25 per cent of the equipment in the Riebeeck unit. "It's not a traditional US$230 (ZAR3190) per installed tonne equipment plant but something less, probably south of US$200, which is good from a capex point of view," he added.

Mr Claassen said banks that PPC had already spoken to had indicated that they would "gladly" finance the project. However, he said there was "actually a chance that we would not borrow that much" if PPC realised the envisaged debt maturity profile it was currently working on and continued generating the cash in its South African operations.

However, the South African market is currently seeing demand down and combined with excess capacity, prices are depressed. However, it is expected that by 2020 some 3Mta of capacity would need to be decommissioned as it would no longer meet emissions regulations.