Banking group Nedbank Capital and the Bank of China’s Johannesburg branch on Tuesday announced a R1.1-billion debt capital raising to fund new entrant to the South African cement industry Mamba Cement.

The funding for the Mamba Cement project, which would include the construction of a cement production facility in Limpopo, its ongoing operations and the mining of limestone, was provided by China building materials enterprise Jidong Development Group, the China-Africa Development Fund and investment group Women Investment Portfolio Holdings.

Mamba Cement would manufacture high-quality pure cement with the capacity to produce cost-effective products. It was expected to produce a highly sought after product both from a quality and versatility perspective, with a sustainable transport advantage owing to its proximity to the major cement demand centres of Johannesburg, Pretoria, Mpumalanga, Rustenburg and Brits, Nedbank Capital said.

Once completed, the Mamba Cement plant would have a capacity of more than one-million tonnes a year.

“A new entrant [into the cement market] will not only help to instil competition into the market, but also serve to stimulate economic growth and job creation in line with the country’s established development plans. The Bank of China is pleased to have been a key part of such an economically relevant initiative,” Bank of China Johannesburg CEO Zhikun Qiu commented.

Meanwhile, Nedbank Capital infrastructure, energy and telecommunications head Mike Peo said this project finance deal was testament to the two banks’ ability to work together.

“In addition, providing the South African and Chinese sponsor grouping with a seamless and professional service offering augurs well for the possibility of similar collaborations in the future,” he said.

Peo added that, based on the success of the Mamba Cement project, Jidong had approached Nedbank Capital and the Bank of China Johannesburg to act as its banking partners in its expansion efforts into the rest of the continent.