Cape of renewed growth

08 August 2010 - 02:00 By Anton Ferreira
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The Western Cape is hoping for an economic boom from two major energy and mining projects that could transform the region's industrial landscape.

Gigajoule Africa has applied for a licence to install and run natural gas infrastructure in the Atlantis-Cape Town area - at an estimated cost of R2.8-billion - and mining company Rare Earth Extraction (Rareco) plans to exploit high-tech minerals at a ghost mine in southern Namaqualand.

Rareco has signed an agreement with Canada's Great Western Minerals to reopen the Steenkampskraal mine near Van Rhynsdorp, 350km north of Cape Town.

Originally run by Anglo American as a thorium mine, the mine's shafts were closed 40 years ago when the market for the radioactive metal used as nuclear fuel collapsed.

But the ore body also contains so-called rare earth minerals used in new inventions, from cellphones to hybrid cars and flat-screen television sets - and these are giving the mine a new lease of life.

"It's the richest rare earth deposit in the world," said Rareco director Robbie Louw, putting the mine's average ore grade at 20%.

"We're busy with the due diligence ... Once that is complete, the deal will go through." He said the mine could reopen in the first half of 2012, and would employ about 150 people.

The Western Cape will also benefit if Great Western goes ahead with construction of a planned rare earth separation plant in the province.

Louw said the single most abundant of the 15 or 16 rare earth minerals found at Steenkampskraal was cerium, which is used in catalytic converters.

"South Africa is a large importer of cerium for the vehicle industry, so there's a good possibility of supplying the local market," he said.

Other metals in the ore body included those used in the new generation of magnets that have revolutionised electric motors and made electric-powered cars possible, and those used in batteries.

Great Western invested in Steenkampskraal partly to reduce its dependence on exports from China, the major source of rare earth minerals, which has in recent years been choking off supplies. The company believes the market for thorium is also reviving.

Gigajoule, which made a failed bid last year for a National Energy Regulator (Nersa) licence for a West Coast project, made a new application this month.

Project director Johan Visagie said this application took account of Nersa's previous objections, and if it was approved, the first gas could be delivered to customers in 2015.

"We would look at power generation to make the project work," he said.

Gigajoule plans to build an offshore terminal which will pump liquefied natural gas from ships through a pipe coming ashore north of the Koeberg nuclear plant.

Visagie said the Gigajoule infrastructure could hasten the day when Forest Oil's iBhubesi gas field off the Namaqualand coast begins production. Forest has previously described the lack of a gas market in the Western Cape as a major hurdle.

"If iBhubesi produces gas that is commercially viable, affordable to industry, we can play a facilitating role in making our infrastructure available for them," Visagie said.

Albert Schuitmaker, executive director of the Cape Chamber of Commerce, described the two projects as "very, very exciting".

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