Mineral Resources is exploiting the Russian invasion of Ukraine…


This call to “find our own oil” is steeped in politics. And it is entangled in the stalled push for mineral resources and energy for mining and gas exploration as communities and environmental activists have successfully turned to the courts to assert their statutory and constitutional rights – rights to meaningful consultation and transparency to a healthy environment.

Mid-February 2022, the courts confirmed the ban on seismic shots on the wild coast, rejecting the offer of Mineral Resources, while in September 2020, the The Xolobeni community scored a victory for accountability in the mining enforcement regime.

Mineral Resources and Energy Minister Gwede Mantashe recently called this civil society opposition to exploration and mining “colonialism and apartheid of a particular kind”.

At Tuesday’s parliamentary mineral resources committee meeting, deputy director general of mineral resources and energy, Tseliso Maqubela, acknowledged what he called “polarized debates.” They don’t take us anywhere.

Instead, Russia’s invasion of Ukraine has been leveraged in an apparent attempt to reignite the department’s push for oil, gas and other mining ventures.

“We have to do everything we can to make exploration happen. Produce our own oil, nothing else will help us… We have to find our own oil,” Maqubela said, later adding, “We have to be serious as a country about the level of self-reliance and overall investments in the energy systems.

The department’s general argument seemed to go something like this:

South Africa was caught in a “global conflict”, as it was no longer just Russia, Ukraine, but also NATO, the United States and others. Rising crude oil prices were one of the unintended consequences “when you ban Russia, or 7% of crude oil from the international market”. Developing countries would be hardest hit not only by rising crude oil prices – these will drive up everything from gasoline prices to food prices – but also by erratic and more expensive supply lines, because the North would redirect its resources towards itself.

To avoid all of this, South Africa had to find and produce its own oil – and ensure that players in the oil sector also traveled to refine the product. Any product, by the sounds of it.

“If you are a major player, you should invest in refineries… You have to refine something. Maybe biofuels,” Maqubela said. “You can’t be a major marketing player and you don’t produce anything.”

South Africa does not directly import crude oil or refined products from Russia.

But back to the global rise in crude oil prices following Russia’s invasion of Ukraine, and the impact on the price of oil, food and other goods in South Africa, alongside the rise in inflation. All of this poses a threat to efforts to boost stalled domestic growth in an economy that the World Bank, again, described as the most unequal in the world.

Anyone hoping for relief through at least a temporary abolition of fuel taxes (the 2022 budget did not increase fuel taxes and the Road Accident Fund) will be disappointed.

While New Zealand was considering removing some taxes for a few months, according to the Deputy DG Mineral Resources: “We think there is a better way to approach this… We think supporting public transport (like taxis) would work better. »

Similar to the existing public transport framework that could be used to channel support, existing frameworks in the food and agriculture sectors could be used for support as the price of wheat is set to rise. to augment.

Ukraine and Russia are among the largest wheat exporters in the world, largely to countries in the South.

As Mineral Resources eye ‘increases in excess of R2 per liter (of petrol), the National Treasury told MPs that consumers could ‘pay anything between R1 and R3 more per liter of petrol’.

MPs were told crude oil and other supplies for March and April were fine, but the situation was less clear beyond that period. (Photo: Waldo Swiegers/Bloomberg via Getty Images)

According to Maqubela: “People will have to juggle now because disposable incomes will be reduced and this will impact economic growth.”

At present, the department’s mitigation consisted of calling people to work from home and if they must drive, to adhere to lower speed limits such as 100 km/h in a 120 km/h zone.

“If the situation deteriorates, we may have to restrict, for example, 50 liters (of petrol) per visit (at the petrol station). We are not there yet, but we are already looking into this.

MPs were told crude oil and other supplies for March and April were fine, but the situation was less clear beyond that period.

In his closing remarks, the Minister firmly linked the import of crude oil with refining, but also raised the specter of the negative impact if companies left South Africa for its neighbors if it stopped to explore gas and oil.

“Refining is important until we find our own deposits,” Mantashe said in the strongest signal yet that exploration and drilling for oil and gas will continue. DM


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