Aliwal was so named by Sir Harry Smith, Governor of the Cape, to commemorate the battle in which he defeated the Sikhs of India in 1846.The town lies on a strategic ford on the Orange River, which was used by the Bushmen and the Voortrekkers.
Aliwal North developed as both a health resort and transport centre simultaneously, with the railway from East London reaching the town in 1885. This prompted its rapid development as a commercial centre for the north-eastern region of the British colony.
Aliwal North is the centre of a prosperous farming community whose main products are wool, maize, wheat, beef and dairy. The town's principal assets are two popular hot mineral springs, which have extremely high concentrations of minerals and gases. The concentration of gas is so high that the first restaurant built here was able to maintain its cooking fire from gas funnelled from the springs.
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