new order mining right

In today's podcast: Coal of Africa Limited has applied for a new-order mining right for its Vele coking coal project, and, South Africa's Minister. ...

Opinion divided on whether Mafutha will proceed

By: Terence Creamer

Published: 24 Oct 08

A coalfield in the western part of South Africa’s Limpopo province has been selected by Sasol as part of its prefeasibility study into the proposed Mafutha coal-to-liquids (CTL) project, which is being studied together with State-owned development financier the Industrial Development Corporation (IDC).

Sasol executive director Dr Benny Mokaba, who heads the group’s South African energy cluster, has confirmed that the study will focus on the development of an 80 000-bl/d project and that an environmental- impact assessment would be initiated soon.

If the project proceeds – and it should be noted here that there is fairly mixed market sentiment about that prospect, given the likelihood that South Africa could move into a transport-fuel products surplus on the back of two major pipeline projects and PetroSA’s proposed Coega refinery – Mafutha would effectively be a ‘Sasol Four’. Its main existing facility will be the 160 000-bl/d Secunda facility, in Mpumalanga, which is also the world’s largest commercial CTL plant.

But Sasol continually stresses that the development is at a preliminary stage, with many observers believing that the project would not yet even be in the public domain had it not been for political pressure – firstly, to show Sasol’s security-of-supply commitment during a period of fuel shortages earlier in the decade, and, more pointedly, during a contentious windfall-tax hearing process, which took place in 2006.

Prior to that, Sasol had placed most of the growth emphasis, as it continues to do, on the three-phase Secunda expansion, where it is envisaged that output will be raised, using a combination of natural gas and additional coal, by 20%, or 40 000 bbl/d.

In fact, Sasol has now officially pulled the trigger on the initial 4% capacity expansion, which is to be based on natural gas from Mozambique, while studies are still under way into the fuel source for the 16% increase.

By contrast, Mokaba is on record as saying that the group is “absolutely convinced” of the need for an additional inland refinery. But he has cautioned that energy security is not simply about adding new capacity, but about adding the right kind of capacity in the right place.

Fuel Identification Key

For Mafutha, as with Secunda, the fuel source is a key consideration, as is the thrust to make the facility as carbon-capture-and-storage ready as is feasible.

The coal reserves in west Limpopo have been applied for together with a black economic- empowerment partner. And, depending on the quality of coal found, the associated mine could produce at a rate of about 20-million tons of coal a year.

“Our drilling programme continues. We have actually drilled more holes in order to avoid situations that may be similar to what happened at Majuba power station to ensure that we know exactly what the lay of the land looks like.

“We have also done community assessment – we have engaged the community and we have had meetings to ensure that we do not start planning to put things where it would not be morally or communally feasible.

“The programme continues. We have had an extension on our drilling programme, which the government approved, and we are engaging in a continuous drilling process,” Mokaba has said.

Indications so far were that the coal could be useful and, if economically feasible, Mafutha could come on stream in 2016.

Sasol is also looking into the option of using coal-bed methane gas as a feedstock for Mafutha, Mokaba has confirmed.

Sasol would also be looking at carbon-capture-and-storage (CCS) options to determine whether CCS was “practical and doable”.

“The intent is to build a plant as carbon-capture ready as possible,” Mokaba avers.