SA Government in talks over Karoo shale gas licenses

Pretoria- The Department of Mineral Resources is in negotiations with the Department of Science and Technology with regards to the future of issuing licenses for shale gas exploration, Mineral Resources Minister, Ngoako Ramatlhodi, said on Tuesday.

“We are in negotiations with the Department of Science and Technology on a few issues that have to be sorted out …. because you have the SKA in the desert in the Karoo and [the SKA and the exploration of shale gas] are more or less in the same place . They overlap with one another and we want to ensure that there is a balance,” he said.

The minister was speaking during a briefing ahead of the department’s budget vote in Parliament.

In February the Department of Mineral Resources announced that the country will soon start fracking – a method of gas extraction – in the Karoo. The department has published the technical regulations for the development of shale gas for public comment.

Deputy Mineral Resources Minister, Godfrey Oliphant, said in addition to consulting with the Science and Technology Department, it was important that they also engage communities in the area.

“Shale gas is game changer for us and we want to ensure that we do it properly with the buy-in of all stakeholders,” he said.

There were mainly three areas under discussion, including the impact on water, the environment and the SKA.

The Square Kilometre Array (SKA) project is an international effort to build the world’s largest radio telescope.

Minerals and Petroleum Resources Development Act

In March this year the National Council of Provinces (NCOP) approved the Minerals and Petroleum Resources Development Act (MPRDA) Amendment Bill, paving the way for it to be signed into law by President Jacob Zuma.

It was first approved by the National Portfolio Committee on Mineral Resources on March 6, after which Parliament approved the Bill on March 12.

One of the main amendments to the bill relate to state participation in petroleum licences. Earlier versions of the bill entitled the state to a free carried interest of 20% and a further participation interest of 30%, with the total state interest capped at 50%.

It was reported that the version that Parliament approved removed the reference to a 30% participation interest as well as the limit of 50%.

The Act, said the minister, provided the department with a turning point on sectoral transformation in legislation.

“We intend to drive a full democratic process, involving a consultative process with all stakeholders to develop this new foundation,” said the minister.

Minister Ramatlhodi said an inter-ministerial committee had been set up and was chaired by him. It would be evaluating and encouraging continued investment in the mining sector.

Platinum mines

On whether the minister had held talks with platinum mines on retrenchments in the sector following the five-month strike by mine workers in the platinum belt, Minister Ramatlhodi said it had not been brought to his attention.

“However, there is a meeting scheduled with the chamber to begin to review what happened. After that meeting there will possibly be further consultation with the unions and everybody else,” he said.

On 30 June, South Africa’s Anglo American Platinum said it was reviewing options for its Rustenburg operations.

Amplats’ parent, Anglo American, signalled its intention to possibly dispose of some its aging platinum assets in South Africa.

On Tuesday, the minister said the group was not leaving the country.

“Yes, they are selling in Rustenburg but I’m not informed that they’re leaving the country. I’ve had a meeting with them. They are not leaving the country they will be investing much more in the land, particularly in Limpopo and other areas,” said the minister.