WeeklySA_AdminDEVELOPMENT:As keynote speaker at upcoming energy indaba, he will outline a plethora of investment opportunities available for companies across the energy and power infrastructure sectors…
By WSAM Correspondent
To attract investment in South African oil and gas, Minerals and Petroleum Minister Gwede Mantashe has joined the panel of key speakers to address the African Energy Week’s “Invest in African Energy” conference, which is taking place in Cape Town on November 4 to 8.
Mantashe’s return to the conference aligns with national efforts to drive oil and gas development across the country as the government strives to advance energy security and countrywide industrialisation.
The conference, the largest event of its kind in Africa, seeks to unite African presidents, government and national companies with global investors, project developers and technology providers. It also drives investment across the entire value chain.
South Africa released in April 2024 its draft Gas Master Plan (GMP) – a policy instrument that aims to establish a secure supply of gas by diversifying options from local and international markets – outlining projected demand, infrastructure requirements and targeted capacity.
The GMP supports policies such as the Gas Integrated Power Producer Procurement Program, which targets 2 GW of new generation capacity to be derived from land-based gas-fired power facilities. As a frontier hydrocarbon market, South Africa offers a wealth of prospects for companies in exploration, production and infrastructure development.
Given the pressing need to bring new energy sources online in South Africa, the government is promoting investment in frontier exploration. Offshore, proven potential in neighbouring Namibia has further enhanced the attractiveness of the South African Orange Basin. A string of billion-barrel finds were made in Namibia between 2022 and 2024 and a combination of independent and major energy companies have recently farmed-in to South African blocks in the hopes of unlocking similar discoveries.
Energy majors TotalEnergies and QatarEnergy acquired participating interests in two blocks this year. The transaction provides the companies with a 33% stake and a 24% stake, respectively. Additionally, oil and gas exploration company Eco Atlantic – through its wholly owned subsidiary Azinam South Africa – signed a farm-in deal for a 75% working interest in the Orange Basin. The company assumed operatorship of the block, which is estimated to be one of the largest in the basin. These transactions are just the start, with South Africa’s offshore basins offering a rich combination of undeveloped and unexplored acreage.
Onshore, South Africa is making great strides towards leveraging gas resources for both power generation and fuel-related purposes. The country’s shale formations in the Karoo Basin are estimated to hold as much as 209 trillion cubic feet of gas resources, making it a highly attractive onshore play.
Several projects are underway with Independent energy and petroleum company Panoro Energy, having applied for an exploration right for helium and natural gas in the basin in June 2024. This project scope comprises a three-year work program and will enhance the geological understanding of the basin.
Additionally, gas explorer Kinetiko Energy is progressing with a five-well gas flow testing programme in the Mpumalanga province, expected to start later this year. The campaign aims to identify high-flow rate gas zones in exploration rights.
Beyond exploration, South Africa is seeking partners to invest in energy-related infrastructure, including hydrogen, power generation and transmission, refining and distribution. Gas-to-power has been identified as a priority industry for the country, given rising power demand and emerging resource potential.
The country’s Integrated Resource Plan 2023 – a comprehensive plan to bring new generation capacity online – shows that South Africa requires between 7.2 GW and 8.6 GW of new gas-to-power capacity to support industrialisation and electrification efforts. This highlights a strategic opportunity for both upstream players and downstream investors. “To address its energy crisis, South Africa needs natural gas. Exploration campaigns in both onshore and offshore basins have made clear the significant reserve potential in the market. Yet, lack of investment continues to hinder development in the sector, further restricting the country’s efforts to enhance energy security. It is great to see companies entering the South African side of the Orange Basin, but much more needs to be done to maximise the country’s oil and gas reserves,” stated NJ Ayuk, executive chairman of the African Energy Chamber.
Mantashe’s return to the upcoming energy conference underscores a commitment by the ministry to maximise the development of the country’s oil and gas resources. At the conference, he will connect with investors, technology providers and regional counterparts while driving discussions on investment opportunities, regulatory support and national energy priorities.
The conference is a platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit http://www.AECWeek.com for more information about the event.
MANTASHE ‘WORRIED’ OVER MINING SECTOR’S JOB CUTS
REVIEW:Talks pending to avert imminent move by Sibanye-Stillwater to retrench more than 11 000 miners from its workforce…
By Lehlohonolo Lehana
Mineral and Petroleum Resources Minister Gwede Mantashe has expressed concern over the recent retrenchments in the mining platinum sector.
This follows Sibanye-Stillwater mine’s move to cut over 11 000 jobs from its workforce over the last year and a half.
Sibanye-Stillwater CEO Neal Froneman says “the future of Stillwater remains in the balance. It’s as simple as that. If there is no correction in price, as strategic as it (the mine) is, we will have to put it on care and maintenance, “he said at the London Indaba conference earlier this month.
Stillwater, which produces palladium and platinum, was one of the first of Sibanye-Stillwater’s operations to be restructured. In November the company cut about 287 employees including 187 contract workers at the mine.
A year earlier Sibanye-Stillwater delayed an expansion of Stillwater to 700 000 ounces a year.Then it abandoned the expansion, and set a production target of between 440 000 to 460 000 oz for the 2024 financial year. However, Froneman has been reluctant to shut Stillwater. “The good news is we are Ebitda positive at Stillwater,” he said.
“We are not cash-flow positive, but we won’t close it. If you think about taking out 400 000 ounces (in annual PGM production) out of the market … no, it’s not happening. It’s too strategic,” he said. One concern for Froneman is the optics of cutting jobs in a country where it’s proposing to build a lithium/boron mine (Rhyolite Ridge).
In response to these job losses, we have pulled our social partners together and are in discussions to craft an approach to minimise them,” Mantashe said, delivering the Department of Mineral Resources and Energy’s Budget Vote in Cape Town.
He said significant progress has been made by the National Energy Crisis Committee (NECOM) and National Logistics Crisis Committee (NLCC) who have formed partnerships with industry players to improve the state of infrastructure to support mining.
“The department is currently drafting amendments to the Mineral and Petroleum Resources Development Amendment Act (MPRDA) aimed at ensuring that areas that have been identified as weak and those that have been challenged legally are strengthened against international best practice.
“The amendments will also review the licensing regime to reduce red tape and improve the business environment for investors while keeping in sync with South Africa’s social and economic fabric,” Mantashe said. He said the amendments are a continuation of the regulatory and policy adjustments initiated during the sixth administration.
“Given South Africa’s endowment with considerable mineral reserves of strategic significance to the global economies, we are convinced that increased exploration will enable the country to meaningfully benefit from its global advantage.
“To enable this the department, guided by the country’s exploration strategy, has in partnership with the Industrial Development Corporation (IDC) established an exploration fund to support emerging and junior miners,” Mantashe said.
Government intends to intensify engagements with several fund managers and the investor community to secure additional financing to sustain the fund into the future.
The department has allocated R72 million to fund artisanal and small-scale miners, including women and youth-owned companies.
Mantashe said the health and safety of mine workers remains at the centre of government’s work. “Owing to our strategic partnership with our social partners we have improved our performance towards the zero harm goal,” he said.
The Minister said this is demonstrable in the decline in mine fatalities, injuries and occupational diseases as evidenced by the 49 fatalities being the lowest on record in 2022.
“Although we had set our sights on beating this record in 2023, the regrettable disaster at the Impala Rustenburg that killed 13 mineworkers and many other fatal incidents contributed to the regression resulting in 53 fatalities reported in 2023.
“We have also noted with great concern the emerging trend of fatalities related to motor accidents and disasters involving illegal miners.
“To this end, the department has entered into an agreement with the industry on the development of minimum standards and guidelines to mitigate against road fatalities, while intensifying the fight against illegal mining,” the Minister said.
In the 2024/25 financial year, the department has been allocated at least R8.84 billion, of which R6.4 billion is earmarked for transfers to public entities, municipalities, and other institutions or implementing agents.
