Massive helium discovery in South Africa — an R8 investment that could turn into R1.45 trillion

Gas prospectors have discovered helium under a piece of land in the Free State that could be worth billions of dollars, AFP has reported.

Stefano Marani and Nick Mitchell, directors of renewable energy company Renergen, had natural gas in mind when they purchased the gas rights for the 187,000-hectare piece of land in 2012 for $1 (about R8 at the time).

Instead, they estimate their investment could be worth over $100 billion (R1.45 trillion).

“Renergen is set to become a significant global producer of helium, introducing South Africa as the eighth country in the world to export the very rare commodity,” the company says on its website.

“Our plant will be the first liquid helium processing technology in the country.”

The helium is located at Renergen’s Virginia Gas Project, the only onshore petroleum plant in South Africa. The site covers an area that includes Welkom, Virginia, and Theunissen.

Initial tests at the site found helium concentrations between 2-4%, with further exploration discovering concentrations as high as 12%. The typical concentration of helium is around 0.5%.

The world’s largest producer of helium, the United States, extracts helium at concentrations as low as 0.3%.

Renergen has estimated its helium reserve could be as large as 9.74 billion cubic metres, bigger than the known reserves of the entire US.

AFP noted that conservative estimates put it at 920 million cubic metres, which would still be substantial.

Stefano Marani (left), Renergen managing director and CEO, and Nick Mitchell (right), executive director and COO.

Experts expect a helium rush from private companies as reserves in the US are running out.

Although it is thought to be the second most abundant element in the universe, it is extremely rare on Earth. It is typically produced as a by-product of natural gas processing.

While helium is perhaps best known for its use in balloons, its uses go far beyond this.

Helium is considered highly valuable for its use in medical scanners, space travel, and superconductors.

Certain special properties make it an important component in manufacturing fibre-optic cables, microchips, and other electronic equipment.

In the medical world, helium gas can treat respiratory conditions like asthma and act as a cooling medium for magnets in MRI machines.

It is also used to inflate car’s airbags and in high concentrations in deep-sea diving tanks.

Super-cooled helium is used to force fuel liquid hydrogen and oxygen rocket fuel into a rocket engine, so it will be an essential component for future space exploration.

AFP reports that Renergen is almost ready to start producing both natural gas for domestic use and helium for exporting. Its natural gas is already being used to power Megabus buses.

The company plans to have 19 wells installed by early 2022 and estimates it could eventually produce roughly 7% of the world’s current helium supply.

Another factor that makes Renergen’s site different from other natural gas extraction sites—and will put environmental concerns to rest—is that it won’t require fracking.

Marani told AFP there was already a giant fracture underground, so all Renergen does is drill into this, with no water, sand, or chemicals required.

Now read: Tesla to the rescue — How many Megapacks Eskom can buy for its R14-billion battery project

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Massive helium discovery in South Africa — an R8 investment that could turn into R1.45 trillion