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Mineral resources & energy minister Gwede Mantashe. Picture: GCIS
Mineral resources & energy minister Gwede Mantashe. Picture: GCIS

Mineral resources & energy minister Gwede Mantashe has reiterated his call to encourage investment in mineral exploration.

“Exploration is needed to determine where new mineral reserves are located,” Mantashe said at a mining and energy investment conference in the North West province Tuesday. He warned of a “loud” anti-development movement that was emerging in SA. “Their theme is that they will kill investment through the courts and they are funded heavily by foreign entities.”

In December, the Makhanda high court granted an urgent interdict halting further seismic exploration for oil by Shell on the Eastern Cape’s Wild Coast that had been sought by a coalition of Wild Coast communities. Australian Geoscience data company Searcher now faces a similar legal challenge from communities in the Western Cape seeking to interdict its proposed seismic survey in the area.

The minister said that investment spending for exploration in SA had declined over the years and warned that if the country failed to protect the rights of companies to explore for minerals and other resources it would not succeed in growing the mining industry.

SA’s share in global exploration spending had fallen below 1%, a figure which was “not in line with the rich endowment of minerals that SA has”, according to Mosa Mabuza, CEO of the Council for Geoscience, who also spoke at the conference.

The government wanted the country to attract at least 5% of global exploration spend, Mantashe said.

Details about how SA would attract more investment in exploration activities would be contained in the draft exploration strategy that would serve as a road map for the country’s exploration programme, he said.

One of the arguments used to oppose further exploration was that mining was a “sunset industry” for SA, said Ntokozo Ngcwabe, the department of mineral resources & energy’s deputy director-general for mining, minerals and energy policy. But, she said, this argument was based on the decline of gold mining and ignored the fact that SA had more than 53 mineral commodities.

The Council for Geoscience estimated the gross in situ value of SA’s known mineral reserves to be about $9.6-trillion (R147.91-trillion). Almost half of this value could be attributed to the country’s coal reserves, said Mabuza.

Given the large reserves of coal in the country, instead of moving away from coal-fired electricity generation, coal had to navigate SA’s energy transition, Mantashe said.

In November, President Cyril Ramaphosa announced a partnership between SA and the governments of France, Germany, the UK and the US, as well as the EU, valued at R130bn, to support SA’s “just transition to a low-carbon economy”.

The funding, which would be made available over a period of five years through a range of instruments, including grants and concessional finance, was aimed at supporting implementation of SA’s revised nationally determined contribution (NDC) to the reduction of greenhouse gas emissions. According to the revised NDC, that was submitted at COP26 in Glasgow last year, SA committed to reduce domestic carbon emissions to within a target range of between 350-420-million tonnes of CO2-equivalent (a reduction of about 20%-33% compared with current emissions) by 2030. 

However, in reference to the R130bn deal, Mantashe said the energy transition had to happen against a backdrop of not only the reality of climate change, but also of persistent energy poverty. “We cannot talk about climate change [in a way that] ignores energy poverty. We must talk about [these] together. If we are going to be able to deal with climate change there must be security of energy supply — only then can we transition in a more structured way.” 

According to Mantashe, roughly 13% of South Africans still had no access to electricity. He cautioned that if SA addressed climate change by transitioning from being a high carbon emitter to a low-carbon economy while ignoring “energy poverty” the country would “face a revolt”. Only once all South Africans had access to “affordable, sustainable and dependable energy, then can we talk about how do we clean it”, he said.

The minister also spoke about the need for SA to increase its level of beneficiation of raw minerals in the mining industry, but conceded that cost of electricity was impeding development and investment. “If we want to succeed with beneficiation we must pay attention to the price of electricity,” he said.

This was reiterated by Ngcwabe, who said SA tended to be a consumer rather than a producer of finished products, so to drive investment in mineral beneficiation access to a stable electricity supply was critical.  

erasmusd@businesslive.co.za

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