BN@10: Lorimer quizzed on SA’s underground riches – red tape, nuclear energy and a change of government

In part 3 of his contribution to the BizNews@10 birthday conference, DA shadow minister of mineral resources, James Lorimer fielded questions from BizNews Community members in attendance. An endless supply of good news, Lorimer doubled down on South Africa’s untapped oil and gas potential and added to that the country’s rich – and still largely unearthed – mineral resources, including gold, uranium and possibly lithium. When asked what South Africa needs to do to unlock its bountiful resources, Lorimer retorted, “Change the government” and on concerns about climate change, answered, “One thing I am confident of, is that global warming is not going to kill us… it’s way overblown.” A crusader for the renewal of South Africa, it’s difficult not to be excited by the prospects he shares.

Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.

Watch here

Listen here

Edited transcript of James Lorimer’s Q&A with the BN@10 conference attendees

BizNews Community member: What about global warming and CO2 emissions?

James Lorimer: I think one thing that I am confident of is that global warming is not going to kill us. I think it’s way overblown. There are, I think just even in the last few weeks, the whole narrative on manmade global warming has taken a few knocks. We’ve got the new chief of the IPCC saying, You know what? 1.5 degrees up isn’t going to kill us, which is quite significant. You’ve got Tony Blair giving an interview with the New Statesman and saying, well, Britain’s total amount of CO2 emissions is less than the increase in Chinese emissions every year. So we shouldn’t kind of kill ourselves to cut that. We’ve got the 2022 Nobel Peace Prize winner saying that he seriously doubts that global warming is as big a threat as everybody makes it. I think people are getting a bit skeptical and there are two rather more prosaic reasons for that. One is people in Europe who’ve committed to all these targets are finding out how much it’s going to cost them. And secondly, the whole of the northwest of Europe has had a very cool summer. And we’re always told, don’t confuse weather and climate until it’s obviously convenient for making the argument. But I think that has affected how people are looking at this. And I just have a feeling there’s going to be a bit of a pullback on this. It doesn’t mean that the belief in the need for alternative energy is going to disappear. It’s going to be there, it’s established. But the fact that all these net zero targets cannot physically be met because of the amount of mining that is going on. I mean, we need twice as much copper as we’ve got. We just haven’t got it and nobody’s opening new mines. One of the reasons that people aren’t opening new mines is because of Green opposition. It just gets really difficult and expensive. You know, that circle is going to have to be squared somehow. Yeah, it’s not a big concern of mine. It is of a lot of people in my party. This is an ongoing discussion.

Read more: BN@10: SA’s imminent oil and gas boom – Lorimer shares latest facts on nation’s untapped treasure

BizNews Community member: I wanted to ask about the new oil and gas bill. In your opinion, is it good legislation once you put aside the racial set-asides or is it something that in the future you think that, say, if a coalition government were to happen, it would need to get amended, if not totally rewritten?

James Lorimer: We would like to amend it. It’s got a couple of provisions also, which I’m not really sure about. Look, they’re not through yet, but the bill as it stands they talk about how you have to give up parts of your lease as the time of your lease period goes on, which struck me as being possibly the thin end of a wedge. The problem with amending legislation like this is that you immediately diminish certainty. And when people are making multiyear, multi-billion dollar investments, they want certainty. So if you keep chopping and changing the rules, as the ANC does, people start backing off. And we don’t want people to back off. We want them here. So, you know, can oil companies live with it? If they can, cool. That will change it as little as possible.

BizNews Community member: Getting back to Mossel Bay. They’ve been talking about that for the last 18 months, almost two years. Is it a red tape thing, like I’ve been told about in the gas industry in the past? It’s like pulling teeth. It’s like talk, talk, talk, but nothing happens. You talked about hope just now. We all need hope. We all need future things to look at and to invest in and whatever we want to do. So the question is, why has the project not happened? Is it from the investment point of view into this country because of what this government is doing? Is it the red tape? Is it the people who are trying to do the administration… ?

James Lorimer: Yeah, I think it’s all of it. I think it’s the government processes are very, very slow and frustratingly so. As somebody who’s not in government, I just look at these things and roll my eyes. It takes a long time to do anything, particularly with this government. I think also Total are a bit nervous about the conditions under which the investment will take place and it’ll be quite an expensive one because of those conditions. So they haven’t committed yet to the expenditure. They’re going through this process of obtaining a production license which has a lot of environmental things that you have to do and so on. And that takes time. But I get the feeling that there’s a bit of a wait and see at the moment before they commit. And so, you know, it may yet be a couple of years before they do commit and then it’ll be quite slow again as it starts ramping up. If you look at the speed with which the Mozambique gas fields were developed, it takes a long time. These are very complicated things, as I’m sure you know. So, yeah, it’s all of that.

Alec Hogg: But isn’t it also what you’ve just said about the West Coast? If you’re Total, you haven’t got an endless, limitless budget. And if the West Coast is more prospective, why would you go to Mossel Bay? If you can see what’s happening in Namibia, you’re getting a 100% strike rate.

James Lorimer: I think it might have something to do with that as well. You know, they drill off the West Coast and they find similar or greater quantities of oil that is cheaper to take up. Which one are you going to go for first? So yeah, there’s probably an element of that.

Penuel Mlotshwa ‘The Black Pen: James, thank you so much for the speech. I think it was quite exciting, you know, linking this to the diamond rush or the gold rush, I think would get everyone in the room quite excited. I always worry that events like this also bring in a lot of really serious global thugs. Two quick questions. The first one is you are excited speaking about a potential 60% injection into the state. Does that mean you oppose nationalisation or you just oppose it if it’s under the ANC, which is corrupt because it looks like you’re like getting a lot of money as a state? And then the second one, looking at the belt, we speak about West Coast, East Coast. In your opinion, why do you think the sheikh of the UAE would land in the Eastern Cape and invest in the airport? Could we maybe have a belt that runs across there and may we also have uranium because I’m not sure if that was covered?

James Lorimer: Okay. Well, first of all, I think the sheikh would invest because he likes hunting. I really I don’t think it’s anything more than that. Secondly, nationalisation is bad under any circumstances. Governments don’t run things well. Governments can make rules and can enforce rules, but any time they try and do more than that, they stuff it up. We won’t make that mistake. Those revenues that I’m talking about would come anyway, just under tax royalties, etc.. So no matter what the shade of government, if they’d invested, that’s the kind of money that government would take out of it. And the reason that I want government to make money is because the government’s got a lot of stuff to do in this country. We’ve got to develop the place and we’ve got to make conditions under which people can get pulled out of poverty. I mean, that’s basically the one political question in this country. What do you do about those 18 million people who live below the breadline? And it will take money to fix that. Plus, we’re not in a very good shape financially because we borrowed so much. So anything that will help us pay down that debt would be very, very useful. And there is uranium in South Africa. And if you think, as I do, that nuclear is going to make something of a comeback. That uranium is going to be important. The uranium price has been depressed for a long time. People like Neil Froneman, he’s a notorious uranium bull and he invested heavily in uranium some back a few years back, and the price just never went up. So it’s one of those minerals that sits there and everybody thinks one day somebody is going to make money out of this. But when that day is, we don’t know. But when it comes, we’ve got some of it and we can make some money out of it. So that’ll be great.

Read more: BN@10: The Lorimer interview – a rare ‘good news story’ as we dig deeper into SA’s oil and gas bonanza

Alec Hogg: You remember Afrikaner leases owned by Anglo American bought by Froneman didn’t do too well, bought by the Guptas, didn’t do too well. And still, where’s it now?

James Lorimer: Currently mined by zama-zamas because it’s still got gold. And they’re really bad. They are very, very violent.

BizNews Community member: I wanted to speak about gold. I think Neal Froneman developed the only mine in the last 30 years. What is stopping us developing our assets and what can be done to improve the situation?

James Lorimer: Change the government. Really. We still have massive mineral potential. We’ve got an endowment that is still huge. And the thing that’s stopping major investment is government policy. Anything to do with the mining charter, basically, particularly the ownership requirements. Who’s going to come to a country where you have to essentially give away 30% of your stake, come here with 100 million and then you have to give away 30 million to some people who do not necessarily have anything to add? But you have to do it, otherwise you can’t mine. Of course, people are going to go elsewhere. And so, I agree that if the government does change and drops those requirements, we see a potential flood of money into the minerals industry to all sectors. Gwede Mantashe was boasting, I think, in about 2018 or 2019, that he was going to up our share of the world exploration budget in minerals to 5%. Not so much. It’s less than 1% and it’s not going anywhere. But do you know why? If you’re looking for minerals and you’re not going to be able to develop them under profitable conditions, you go elsewhere. And that’s why perceptions amongst mining executives of the invest-ability of South Africa are so low. And that’s easier to change. You could do it just about in an afternoon. Get the mining charter. Go for it.

BizNews Community member: James, can I just hear your thoughts? Any news – maybe it’s just hearsay – on lithium on the south coast of Natal?

James Lorimer: I’ve been hearing rumours of lithium in various places, but I really don’t know anything about it. It’s a very sexy mineral at the moment because of alternative energies. Yeah, I wouldn’t be surprised. I’m told by people that I respect that we have some. How much? I don’t know. Where it is? I don’t know. We have been so lucky with the minerals that we have in South Africa. It wouldn’t surprise me at all that we have lithium, too. I mean, our mineral endownment is just stupid. It’s wonderful. Now we just need to be able to take it out.

Alec Hogg: I remember reading once that there are five geological miracles on Earth. Five. Two of which are in South Africa, the Bushveld igneous complex and the Wits basin’s gold. And who’s to say there isn’t a third?

Read also: