Renergen warns of 'implied threat' to mineral rights in SA as it battles Motsepe-linked solar company

Energy company Renergen recently raised concerns about the 'unauthorised' construction of a solar project within its production right area by Springbok Solar Power Plant limited (SSPP).

On Tuesday, it published a SENS statement spelling out what it says is happening between its majority-owned subsidiaryTetra4 and SSPP, and the 'implied threat to mineral rights' in South Africa.

Billionaire businessman Patrice Motsepe's African Rainbow Energy and Power (AREP) owns a strategic stake in the SOLA Group.

It all boils down to the thorny issue of mineral rights in South Africa, still without the guidance of a new cadastral system – basically a digital mining map of minerals and mineral rights.

Along with that comes the definition of helium within this context.

Renergen describes 'an alarming trend' where new developers initiate projects without securing the necessary permissions or Section 53 consent letters of support from all the existing mineral and petroleum right holders.

It warns that there are ramifications that extend beyond this specific dispute.

"This practice threatens to set a dangerous precedent whereby the construction of such projects proceeds without proper and meaningful consultation or consent/support from all right holders, potentially invalidating the pre-existing rights and protections conferred upon such right holders under the MPRDA (Mineral and Petroleum Resources Development Act)."

Renergen SENS statement

Stephen Grootes asks Peter Major, director of mining at Modern Corporate Solutions, to shed some light on a complex situation.

These kinds of cases are happening far too often in South Africa, says Major, and sometimes the word 'steal' does apply.

"I don't think it's quite stealing in this case, but it does look like the original owner Renergen had done everything correctly. There are petroleum rights which are a little bit different than mining rights, but give them the right to remove everything in liquid form whether it's natural gas, helium, sulphur..."

Peter Major, Director: Mining - Modern Corporate Solutions

Negotiations did take place with Renergen about using a bit of their property for the first two phases of the solar project, Major says, but then the third phase happened 'without any consultation'.

"What makes it more sinister is that it was granted. So you say 'here we go again', the Department of Mineral Resources (DMR) is granting licenses to people who haven't complied, and it makes it difficult for people who do comply."

"And this new applicant, is a company under Patrice Motsepe's... somebody with a lot of firepower behind him, a lot of contacts in governmment and financial institutions..." 

Peter Major, Director: Mining - Modern Corporate Solutions

For more insight from Major, listen to the interview audio at the top of the article