Gas exploration is reaping dividends –mining could be next

A vital refinery could start receiving new feedstock to prolong its life.

Credit: PASA

Welkom 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.

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

include a carbon capture project and a scheme to treat polluted water in such a way that the finished product is useable.

New gas finds Gold mining started in the Welkom area in 1949 and started tapering off from 1989. Renergen, through its company Tetra4, has made good progress on its Virginia Gas Project (pictured) which covers 187 000ha of gas fields across Welkom, Virginia and Theunissen. The company has exploration and production rights and recent finds have confirmed the earlier, very positive, reports about the size and quality of the resource.

Hiring has increased rapidly since 2019 as the project ramps up from the first phase in which a pilot compressed natural gas (CNG) plant was constructed in 2016. The second phase encompasses liquid natural gas (LNG) and helium. Production of helium is expected to grow from 350kg per day to five tons in the second phase.

The first sector to respond to the potential of this gas find was the logistics sector. Bulk Hauliers International Transport (BHIT) has signed an agreement to take LNG to fuel 50 of its trucks, which should lead to lower operating and maintenance costs. South African Breweries is another client. Renergen has signed an agreement with TotalEnergies for distribution and sales.

The exciting offshore discovery was made by Total and its partners at a site called Brulpadda off the coast of Mossel Bay. The nearby Luiperd prospect in Block 11B/12B delivered more exciting news when gas condensate was also found there.

The block, in the Outeniqua Basin 175km off the southern coast, covers an area of about 19 000km² in water depths of 200m-1 800m. The exploration was done by the semi-submersible rig Deepsea Stavanger (pictured), which journeyed twice from Norway to lead the exploration projects.

The two finds raise the odds of Total investing in what it calls a “world-class” offshore gas site. The drilling campaign employed 195 South Africans with specialist skills but the potential spinoff is enormous for the Western Cape and South Africa, if the find leads to drilling and commercialisation.

PASA has noted the significance of international oil companies committing to exploration off South Africa’s coast. In the context of the great interest caused in the global market by discoveries in the Rovuma Basin off Mozambique in 2020, South Africa’s potential is sure to be in the spotlight. More exploration will guarantee that interest is maintained. ■

Credit: Renergen

An intensive new geological mapping programme is underway

Spending on geology is an investment in the country’s economic future, Finding new ways of explains Council for Geoscience CEO Mosa Mabuza. reducing and reusing carbon

What is the mandate of the Council for Geoscience (CGS)? Our legislative mandate is to be the custodian of geoscientific Council for Geoscience CEO, Mosa Mabuza, is excited about new research on knowledge in the Republic. There are five dimensions to our work.carbon capture and is intent on expanding his organisation’s relevance to the South African economy. The first one is minerals and energy. Society always suspects that we are an exploration company of sorts but we are much more than that. The second one relates to seismic events such as the tremors felt between Johannesburg and Alberton. It is the responsibility of the Council for Geoscience to record those events, to study them, communicate with the public and to indicate the risks and How will the Council for Geoscience (CGS) carbon capture and the storage project in Mpumalanga expand South Africa’s energy mix and decrease the country’s carbon footprint? work closely with the National Disaster Management Committee. We abbreviated the project to CCUS: Carbon Capture for the two Cs, U There is an example of this in the Carltonville area. Our for utilisation, storage as the last stage. Once the carbon is captured it has preliminary results suggest that there might have to be a relocation numerous applications. Not only would you be able to reduce the carbon of a village. It’s not a small place, those are villages that were content that is emitted into our climate, but you can also apply it in fertiliser supporting the gold mines. The nexus between deep gold mining, manufacturing and in a number of other applications. Mosa Mabuza, CEO dolomites, acid mine drainage as well as non-maintenance of water We see it as a scientific intervention that gets us as a country to breathe infrastructure, all of that is causing this proliferation of sinkholes. Now you can’t apportion the blame on this one alone or that one alone and I don’t think blaming will help but it’s good to know what life into the climate mitigation measures, in terms of the international climate protocol that we have committed to. If the science is proven, the problem is so that it is never replicated. not only will South Africa meet but it will go far beyond the minimum We are also doing a land susceptibility mapping exercise. commitments that we have made as a country. BIOGRAPHY When we had continuous rain in KwaZulu-Natal there were But we’ve got to let the science take place, we’ve got to let the pilot many properties and road infrastructure that collapsed. If you do the study today, not when it rains, then you either don’t develop it here or if you were to develop it here, then make sure that you reinforce the infrastructure. Environment and water management is the third main area of our brief. Then we have Geosciences Innovation where we are After qualifying as a geologist from Wits University, Mosa held various positions at De Beers and Anglo American and worked in jurisdictions as varied as West Africa and project prove that indeed, it is a sensible scientific intervention, that the economics make sense, that science and the intentions are met. Only once we have proven all of those three attributes, would we be confident enough to say that, indeed, we can continue. We think that, if it is proven, then coal can continue to play a critical role in our energy mix. Mosa Mabuza, CEO Canada. From his appointment as now beginning to use artificial intelligence applications. It is a fantastic new area. The last one is “geosciences for diplomacy” – the Director of Mineral Economics Is this pilot at one site or is it multiple sites? this relates to exchanges in geosciences where we connect with in the former Department of MinerThe first one is on one site. We have chosen a pilot very close to the major our international counterparts.als and Energy, he was promoted to emission sites in Mpumalanga where there is a higher concentration of BIOGRAPHY What are your priorities at the CGS? Deputy Director-General of Mineral Policies and (Investment) Promotion power stations, as well as the Sasol plant. If we get that right we can have our contribution to carbon pollution reduced by between 60% in 2012. He has been CEO of CGS since 2017. and 80%. After qualifying as a geologist from Wits University, Mosa held various positions We have not yet mapped the country at the right scale of 1:50 000. Our predecessors have done a fantastic job of mapping the entire at De Beers and Anglo American and What are the other priorities of the CGS in Mpumalanga? worked in jurisdictions as varied as 34 The CGS mandate is that we are the custodians of geoscientific information West Africa and Canada. From his and knowledge in the country so we have quite a number of programmes in appointment as the Director of Mineral Mpumalanga. One of them which is really very exciting and is at an advanced Economics in the former Department stage of development is the passive treatment of polluted water. This is getting

country at a scale of 1:250 000. They have handed the baton to us and we have now made the political leaders appreciate the importance of mapping the country at that scale.

Our key priority is what we call the integrated multi-disciplinary mapping programme. If an area does not have water, we can quickly look at the geology at that scale and say that you can complement your water resources supply with groundwater. Until we get there, these are the kinds of questions that are difficult to answer.

The team is moving at an incredible pace. When we started, we were just under 5% coverage and we are targeting to reach 9.5% at the end of this financial year.

Do you have the necessary resources? The political leadership has started to appreciate the importance of science so that they can make science-based decisions. I have the utmost support of the Minister. We recently presented in parliament and they are fully behind us. They are arguing on our behalf that the social programme is not sustainable if we are not investing in economic catalysing activities today. Geology is a national investment; it is not a cost.

Do you have other priorities? The blue economy. We have not even begun to map our oceans. If there is one thing that embarrasses us as a nation it is that we do not have a single map from our oceans. For the first time, we published a number of marine geology maps. Marine research is showing us exciting things, and once you have the information then you can make informed choices.

We are opening our eyes to a whole frontier economy right under our noses which we have not exploited optimally. When we looked at the geological work that has been done, we found that there was limited information there. We have put forward an aggressive plan to map offshore.

I recently had a very productive meeting with the chief of the navy. We have struck a partnership with the navy so that we can have a collaboration to leverage their vessels so that we can fast-track the mapping. That will help us to accelerate the mapping and help us to catch up.

The same would apply to Department in Fisheries vessels. We have amazing expertise of marine geology at the Council for Geoscience, and we are beginning to unleash that potential.

How important is the CGS carbon capture and storage project in Mpumalanga? We have abbreviated it to CCUS, with the U representing utilisation, and storage as the last stage. Once the carbon is captured it has numerous applications. Not only would you be able to reduce the carbon content that is emitted into our climate, but you can also apply it in fertiliser manufacturing and in a number of other applications.

We see it as a scientific intervention that gets us as a country to breathe life into the climate mitigation measures, in terms of the international climate protocol that we have committed to. If the science is proven, not only will South Africa meet, but it will go far beyond the minimum commitments that we have made as a country.

But we’ve got to let the science take place, we’ve got to let the pilot project prove that, indeed, it is a sensible scientific intervention, that the economics make sense, that science and the intentions are met and only once we have proven all of those three attributes, would we be confident enough to say that, indeed, we can continue. We think that, if it is indeed proven, then coal can continue to play a critical role in our energy mix.

Schematic illustration of a proposed CCUS plant near Leandra, Mpumalanga Province

Is this pilot at one site or is it multiple sites? The first one is on one site. We have chosen a pilot very close to the major emission sites in Mpumalanga where there is a higher concentration of power stations, as well as the

A geo-environmental baseline study for gas in the Karoo has recently been completed and the report is being compiled.

Sasol plant. If we get that right we can have our contribution to carbon pollution reduced by between 60% and 80%.

What role is the CGS playing in the debate over the just transition? We will not be driving the whole debate but the carbon capture utilisation and storage is a scientific intervention that asks the fundamental question – does transition necessarily mean transition from coal or does the transition mean we are making a commitment to transition from high carbon to low carbon?

Over many years we have developed the capacity to generate our base load from coal, we still have vast of resources of coal in South Africa and we have installed generation infrastructure. On the other hand, we have correctly made commitments to be part of climate change protocols. There is no debate on the contribution of carbon in accelerating the climate change, there’s absolutely no debate there.

As the Council for Geoscience, our contribution in the main is limited to the science. The Council for Geoscience must also play a prominent and critical role as a leader in mobilising society around a particular position that takes into account South Africa’s specific societal circumstances.

What are your goals with regard to staff? Our biggest competitive advantage is our human capital. We have around 500 people in total and two thirds of them are geoscientists. We intend to create at least 10 A-rated geoscientists on the global scale in the next five to 10 years because once you have created a capable institution then all these other things become very easy. Anything and everything is possible when you have competent, agile, committed world-class rated scientists. Currently, 37% of our scientific staff have Master’s degrees and doctorates. We have a very ambitious target of 60%.

What is CGS doing in terms of regulating the sector? We have realised that since the current legislation that governs us was enacted we have not developed the regulations to provide the framework for how to handle that data. Regulations clarify the provisions of the legislation.

Historically, we have a disconnect where mining companies were collecting geological information and very few of them were making it available to the state. Now some of them have closed shop and left South Africa and that information is nowhere to be found. We are trying to correct that. Draft regulations were published in April 2021 and we requested comments.

An absolute priority is to have the regulations finalised in the current financial year. Where information is commercially sensitive for active projects, we will give reassurance that the information is treated as such. We are not nationalising geoscience. It is global best practice that a condition of your right is that you must provide the geological information you have collected. You bank the information with the “library” and the library promises not to sell it to someone else until such time as your project is finished.

Are your teams finding new areas of potential? Unless we study the geology, we will not be able to know what we have. Our scientists have now confirmed rare earth element (REE)-

The Council for Geoscience has launched its own research vessel, RV Nkosi, named for a renowned mineralseparation technician who passed away in 2019. Mapping the oceans is being done in support of the national Blue Economy programme.

bearing rocks in the Northern Cape. Rare earth elements are vital in new industries such as renewable energy.

We are looking at Northern Cape base metals like nickel, copper and chrome by adopting a mineralising system approach. We are investigating findings suggesting that the Wits Basin extends further into Mpumalanga and possibly the Free State area.

The geo-environmental baseline study for gas in Beaufort West in the Karoo is complete and is being written. An environmental baseline study does not cover economic modelling but if the amounts of shale gas that we believe we have are indeed present, this may have a huge impact on our national fiscus. Are discussions taking place about a new Cadastre for SA mining? The Cadastre is the responsibility of the Department of Mineral Resources and Energy (DMRE) but we are having conversations as to where is the best place for it. Now a Cadastre without geological information is not complete. People want to be able to go onto that system and click there within your right and say well let’s see what geology is there. That currently doesn’t exist.

We are not legislators, we are a science council. But we have geological information which is a critical component. Bridging that gap is what we have to resolve but we are having a conversation around that. The goal would be to have a geologically informative Cadastre. ■