SPECIAL FEATURE
Gas exploration is reaping dividends — mining could be next A vital refinery could start receiving new feedstock to prolong its life. A similar focus is needed in the mining sector to unlock the country’s resources for economic growth. Studies have shown that South Africa is currently attracting just 1% of global spending on mining exploration, a figure that normally reaches R160-billion annually. Several industry leaders have expressed concern about the low level of exploration activity but in 2020 they were joined by the Economic Transformation Committee (ETC) of the African National Congress (ANC), the country’s majority political party. The ETC sees exploration as a way of broadening the scope of ownership within the mining industry. Gwede Mantashe, South Africa’s Minister of Mineral Resources and Energy, wants to see South Africa attracting at least 5% of global exploration. For exploration to expand a reliable cadastre is required. A cadastre is a record of property boundaries and ownership. Drone technology could take the mapping process forward, allowing for more exploration at a lower cost. In his 2019/20 budget vote, Mantashe noted that about 4 000 permanent jobs would be created by the recent investment of about R45-billion through projects such as Exxaro’s Belfast expansion (coal), Sasol’s coal mine replacement programme and Vedanta Resources’ huge zinc mine in the Northern Cape. The Council for Geoscience, another of the agencies of the Department of Mineral Resources and Energy (DMRE), develops and maintains the national geoscience knowledge infrastructure for both the onshore and offshore environment. The Council for Geoscience provides data which is used in exploration for minerals and has found signs that there might be a future for gold mining in Mpumalanga. In addition, the council is actively involved in several projects which could help to take mining into the cleaner energy future. These
Credit: PASA
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elkom in the Free State used to be a thriving town, based on gold mining, but it lasted only four decades. The economy of the coastal town of Mossel Bay relied heavily on the gas-to-liquids refinery on the town’s outskirts before the gas ran out. The depletions were expected in both cases but when the gold price experienced a drop of $600 in 1989, the writing was on the wall sooner rather than later for many gold mines. The lack of feedstock for Mossgas, the refinery run by the country’s national oil company, PetroSA, came to a head when the Central Energy Fund reported to parliament that reserves were expected to run out by December 2020. The Fund stated, “there is still no sustainable techno-economic long-term solution for the gas-toliquid refinery”. Since that gloomy report, two gas drilling projects have indicated that both towns could boom again. Petroleum Agency South Africa (PASA) is in charge of oil and gas exploration and one of its goals is to increase the percentage of gas used in the South Africa energy mix. Licences issued for offshore drilling off the southern coast off Mossel Bay and onshore at Virginia near Welkom have both paid off, with discoveries indicating significant reserves.
SOUTH AFRICAN BUSINESS 2022
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