Thursday, February 9, 2023
South Africa reveals recovery plan for mining and energy sector

South Africa reveals recovery plan for mining and energy sector

Government has tabled a recovery plan to restore business confidence, stimulate investments, safeguard and create jobs in the mining and energy sector.

“The Mining and Energy Recovery Plan intends to restore and restructure the industry within the context of a renewed, sustainable minerals and energy complex, pivotal in the reindustrialization of the country, while transforming the mining and energy industry,” said tourism minister Mmamoloko Kubayi-Ngubane.

Kubayi-Ngubane said this on Tuesday delivering the Budget Vote Speech of the Minister of Mineral Resources and Energy, Gwede Mantashe, who is recovering from COVID-19.

Energy sector

According to Kubayi-Ngubane, South Africa has embarked on the Liquefied Petroleum Gas (LPG) Expansion Initiative.

“LPG is the most efficient form of energy for cooking, space heating as well as water heating, yet its contribution is below par. We will set a target to double consumption of LPG in South Africa over the next five years.

“This will alleviate pressure on the Eskom power supply. To ensure orderly development, all role players in the value chain will have to be registered with the department,” the minister said.

The energy sector will work with the Department of Trade, Industry and Competition to localise the manufacturing of gas cylinders and appliances.

Following the announcement of the gas condensate discovery in February 2019, Total and its partners are continuing with their drilling programme and have since procured the services of the Stavanger rig.

“The Nowergian rig will hit South African shores next month and will drill up to 18 months with a total investment of R1.5 Billion. This investment could not come at a better time and it will have massive multipliers on other economic sectors like tourism, fuel supply and the hospitality sector,” Kubayi-Ngubane stated.

On South Africa’s plans to tackle the effects of climate change, the minister further disclosed that a resolution has been taken to appoint the Council for Geoscience (CGS) as the implementing state agency of the Carbon Capture Utilisation Storage (CCUS) project, previously implemented by the South African National Energy Development Institute (SANEDI), a project co-funded by the South African government and the World Bank.

“Concerns around climate change and the just transition have necessitated a deliberate investment in research for clean coal technology that considers the carbon capture, sequestration and utilisation in order to reduce the nation’s carbon footprint, in accordance with our ratification of international climate change protocols,” she said.

Mining sector

With regard to the mining sector, Kubayi-Ngubane said mining sector’s economic recovery plan will focus on the implementation of the Small Scale Mining (SSM) Framework; forming partnerships with aligned departments and entities to leverage on their resources and experiences for maximum impact.

Artisanal, small-scale mining policy

The Department of Mineral Resources and Energy intends to develop an artisanal and small-scale mining policy.

“Currently the Mineral and Petroleum Resources Development Act (MPRDA) does not define artisanal and small-scale mining (ASM) concepts and does not sufficiently cater for the artisanal mining industry. Small scale miners are virtually treated the same as large scale miners in terms of environmental, water use, health and safety and financial provisioning requirements,” the minister said.

Small scale projects

She said as of 1 April 2020, the department has approved R38 million towards rehabilitation costs, exploration and capitalisation of small scale projects.

The department has already drafted a paper on a set of interventions to revive and increase the competitiveness and sustainability of the ferrochrome sector.

“This paper will soon be presented to Cabinet for approval. These interventions will ensure that we derive maximum benefit from the comparative advantage of our mineral wealth, save jobs and place this sector on a new growth path,” the minister stated.

Kubayi-Ngubane said a reconnaissance assessment of the Molteno-Indwe coalfield in the Eastern Cape and the Ga-Ramokoka Carbonatite Complex in the North West Provinces has been concluded.

“Preliminary results in the Molteno-Indwe coalfields show an estimated economically exploitable coal tonnage of 320 million tonnes, with a value beneath the ground of R122 billion, using a conservative estimate of R350 per ton.

“The Ga-Ramokoka Carbonatite Complex hosts numerous minerals that span an estimated tonnage of Rare Earth Elements at 470 thousand tonnes, phosphates at 300 thousand tonnes and copper 30 thousand tonnes. The potential value of a suite of minerals in the carbonatite is estimated at R1.4 billion,” the minister said.

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