The Multinational Monitor


S O U T H   A F R I C A

French Firms - Including Government Enterprises - Step Up Their Investments in South Africa

Despite Socialist Party promises of a new era, it's business as usual

by Meg Bortin

Despite often-expressed ideological differences between Socialist France and ultraconservative South Africa, commercial relations between the two countries are cozier than ever.

Just 10 days after French President Francois Mitterrand's election last May, Socialist Party chief Leonel Jospin went on record as recommending the "reduction of French imports from South Africa over a period compatible with technical constraints" and "the interruption of all public investment and all aid to private investment." He described as "false and illusory" the "idea that economic development would engender a disintegration of the apartheid system."

But in fact, "trade has increased since President Mitterrand came to power" last May, says Johan Pietersen, the commercial attache at South Africa's Paris embassy. "The figures show it."

French exports to South Africa increased by nearly 50% last year over 1980, reaching nearly $1 billion. More than half of the goods France exported were heavy equipment and machinery needed by South Africa to mine, transport and export its vast underground mineral deposits.

Nearly a year after the Socialist victory, France remains South Africa's fifth largest trading partner, after the United States, West Germany, Britain and Japan. Some 40 French multinationals, many of them stateowned, have major holdings in South Africa; 35 more maintain commercial offices there. And five major French banks have branches there, providing loans for the expansion of the South African economy.

Since the Socialist Party was elected, the following new business deals have been signed:

  • Renault, a French state-owned multinational long present in South Africa, has signed a new contract with the South African branch of British Leyland to assemble and market a new automobile model, the L42, by 1983.
  • CGE-Alsthom, nationalized in February with other major French companies, signed a $290 million contract to supply the generator for a giant coal-fueled power station to be built at Matimba, in the northwest Transvaal.
  • The Franco-German consortium Stein Industrie-EVT, a branch of CGE-Alsthom, won a hard-fought contract worth an estimated $1 billion to supply six 600-megawatt boilers and the turbines for the Matimba plant by 1986.
  • Indosuez, also just nationalized, will finance the Matimba project for some $1.375 billion.
  • Line, a French machine tool company, was saved from impending bankruptcy early this year by signing a contract with the South African railways for supplying computer--controlled equipment for machining railway lines, with the first of three 20-ton machines to be delivered by 1983.

France's strong trade ties with South Africa extend into the controversial area of nuclear exports: the Socialists have continued to help South Africa build. a $2.5 billion nuclear power plant at Koeberg, 20 miles from Capetown. This is South Africa's first nuclear reactor.

A consortium of three French multinationals, Framatome, Alsthom, and Spie-Batignoles, has been constructing the reactor since 1976.

Under a seven year, $2.5 billion contract signed in 1976, Framatome (30% state-controlled, 70% held by Creusot-Loire) is to supply the nuclear technology and equipment for the plant; it is also to provide the fuel. The contract, which the current French government has pledged to fulfill, stipulates that the South African Electricity Supply Commission will supply enriched uranium for conversion by Framatome into fuel pellets.

On November 13 last year, the Electricity Supply Commission announced that it had supplied Framatome with enough enriched uranium to provide for the initial loading of the first Koeberg reactor. The amount was believed to be about 75 tons, but mystery surrounds the source of that enriched uranium. The South Africans claim to have invented a new enriching process at their top-secret Valindaba nuclear center near Johannesburg, but it is not expected to be operational before 1985, so the fuel must have come from outside of South Africa.

South Africa has not signed the Nuclear Non-Proliferation Treaty, thereby making the country ineligible to receive enriched uranium from Western suppliers who have signed the treaty. Critics of South Africa's nuclear program have identified various nations as the source of the enriched fuel, including China, Spain, the USA, and France itself. All of these countries have denied supplying the fuel to ESCOM.

The French Foreign Ministry, asked in late November to specify the origin of the enriched uranium obtained by ESCOM, said only that it had been "procured on the international market." France "has no supervisory rights over the enriched uranium it is sent by South Africa, and has no reason to exercise any such right over a sovereign country," a Ministry spokesman added.

As for the half-ton of plutonium waste to be produced annually by the Koeberg plant - enough to manufacture 100 Hiroshima-type bom6s - French government sources said that under Framatome's 1976 contract, South Africa had neither the right to stock nor to reprocess the plutonium, but was to ship it to a site agreed upon by the two parties. Asked to comment on the destination of the plutonium waste, a Framatome spokesman said only, "This is not Framatome's problem; it is up to ESCOM."

Alsthom is to supply a huge four-turbine generator for both the 900-megawatt reactors at Koeberg. Spie-Batignoles, a branch of the Franco-Belgian group EmpainSchneider, performs the civil engineering on the project.

The first of the station's two reactors is to be operational this year, the second in 1983; the power they generate will fill about 10% of South Africa's electricity needs.

Meg Bortin is a journalist based in Paris.

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