The Department of Energy plans to invite independent gas-fired projects to tap into SA’s unmineable coal deposits and turn them into gas or electricity. Picture: BLOOMBERG

BILLIONS of tonnes of SA’s unmineable coal could be turned into gas or used to generate electricity through new technologies that promise cheaper and more environmentally friendly processes than conventional mining.

There are no unconventional gas projects in commercial operation in SA yet, but the Department of Energy’s plan to invite independent gas-fired power projects could be a catalyst for development.

There are three main techniques to extract gas from coal seams without removing the coal, depending on the type of deposit.

The first is underground coal gasification, in which coal is ignited underground by injecting it with air or a combination of oxygen and steam, creating synthetic gas. The synthetic gas can be treated for use in electricity generation or as liquid fuels such as petrol or diesel.

The second method is coal bed methane, called coal seam gas in Australia, which entails drilling into the seam and pumping out water to lower the pressure and release the gas to the surface. The third technology is fracking, in which chemicals are injected into a carbon seam to fracture it and release gas.

Pilot studies have shown that underground coal gasification would be technically feasible on South African coal deposits. It is in commercial operation in Australia and North America, where the coal deposits are younger and more gassy than SA’s deposits. Experts believe there could be potential for coal bed methane in the younger Waterberg coal deposits.

The Karoo shale deposits might be exploited by fracking, but those studies are at a far earlier stage.

Underground coal gasification and coal bed methane operations are cheaper than coal mining, avoid the negative consequences of storing and transporting coal and have carbon capture possibilities.

UK-based environmental lobby group Frack Off says that underground coal gasification results in "a witches’ brew of toxic and carcinogenic coal tars" and is associated with serious groundwater contamination and massive carbon emissions. Coal bed methane results in methane release, water contamination and potential ground subsidence, it says. Developers of the technologies argue that such consequences can be prevented.

Linc Energy says its Yerostigaz underground coal gasification plant in Uzbekistan is the only commercial underground coal gasification plant in the world. It has been operating since 1961.


THE World Coal Association says about 30 underground coal gasification projects are in development in China, while India hopes to use underground coal gasification to access about 350-billion tonnes of coal. There are also underground coal gasification studies under way in the US, Europe, Japan, SA, Indonesia, Vietnam and Australia, it says.

In 2002 Eskom identified potential for an underground coal gasification operation near Majuba power station. Majuba was built to take coal from its immediate vicinity but it was discovered that the deposit was unmineable, so coal is now trucked to the power station.

In 2007 an underground coal gasification pilot plant at Majuba was fired, proving the technology worked in principle. It produced 2MW of power that was flared and not used to generate electricity. Eskom says underground coal gasification would qualify under the Department of Energy’s integrated resource plan as a coal baseload generating option or as a gas mid-merit option.

The government’s call for interest in independent gas generation included provision for unconventional gas such as underground coal gasification, coal bed methane and shale gas.

Although underground coal gasification is the cheapest way to extract raw coal energy, the gas would have to be cleaned to be used for power generation. Eskom says the treatment plant would be the most costly and complex part of the process. Another obstacle is the licensing process for unconventional gas projects in SA. The Majuba underground coal gasification project has a mining right but it needs an environmental impact assessment and a water-use licence.

"Underground coal gasification requires permits and licences from several national and regional regulatory departments, including the national energy regulator and the departments of mineral resources, energy, environmental affairs and water," Eskom says.

"In all cases ‘unconventional’ gas technologies were never envisaged, and needed to be accommodated. This has taken several years, and is still not final for several of the regulators, such as mineral resources and water."

Eskom’s constrained financial situation has resulted in a cut to the budget for the Majuba underground coal gasification project this year. It is only funded up to decommissioning the existing gasifier. Eskom says it is looking for external partners to develop underground coal gasification.

Sasol New Energy, which signed an agreement with Eskom in mid-2013 to evaluate underground coal gasification, is no longer involved, Sasol spokesman Alex Anderson says. Its involvement was terminated as part of the group’s restructuring. Eskom says this was a research agreement and is not the kind of partnership it is now proposing.


SASOL and Eskom signed a licensing agreement with Ergo Exergy Technologies of Canada, whose technology was also used in Linc Energy’s Chinchilla underground coal gasification demonstration plant that is now being decommissioned.

Queensland’s environmental authorities are pursuing Linc Energy for contamination allegedly caused by the plant. Linc and coal miner Exxaro signed an agreement in 2013 to research underground coal gasification. In Exxaro’s latest annual report, it says that because of "the current economic environment and expected capital expenditure requirements, Exxaro has decided not to develop the project in 2015. This project will be reviewed when markets improve".

Another underground coal gasification project on which work has been carried out over several years is the African Carbon Energy (Africary) site near Theunissen, based on a coal resource bought from BHP Billiton in 2012. It is targeting a 50MW underground coal gasification to power project.

Africary owner and CEO Johan Brand says that when the bidding process opens, the project would be submitted under the Department of Energy’s invitation for gas-fired power. Becoming a successful bidder would allow the project to break ground in mid-2016 with potential to add 2,000MW to the national grid over the next decade, he says.

Companies looking at coal bed methane in the Waterberg include Anglo American Coal, Coal of Africa and Sunbird Energy, which has an offshore gas project at Ibhubesi on the west coast of SA, is focusing on its Mopane and Springbok Flats licence areas, both in Limpopo.

Sunbird Energy chairman Kerwin Rana says the focus at Mopane is on securing environmental approvals so a production pilot can begin. Once the "code is cracked" for a coal bed methane project, it can deliver quite quickly and be readily expanded.

"In general, the emerging regulatory environment does make the development of coal bed methane in SA challenging," he says. "Certainty over key regulations is needed to encourage investment.

"However, we do understand that the regulatory framework is soon to be in place and believe that this will be a catalyst for renewed interest in coal bed methane, against the background of the Department of Energy’s initiatives for large-scale gas to power projects."