Natural gas and helium producer Renergen has secured a significant victory in its ongoing dispute with Springbok Solar Power Plant over helium rights in the Virginia Gas Project.
Minister of mineral & petroleum resources Gwede Mantashe has dismissed Springbok Solar’s appeal against Renergen’s helium rights, confirming that helium is a by-product of petroleum/natural gas and that it falls within the scope of Tetra4’s existing production right.
The dispute arose when Springbok Solar’s project was found to encroach on Tetra4’s production rights, leading to a formal revocation of the defective section 53 approval under the Mineral and Petroleum Resources Development Act.
The minister’s decision interprets helium extraction alongside natural gas as consistent with the act, supporting regulatory consistency within SA’s petroleum framework.
The dismissal of the appeal removes a legal obstacle that had the potential to affect Renergen’s operations and shareholder interests.
Sola Group, developer of the Springbok solar power plant, acknowledged the minister’s dismissal of the appeal but highlighted ongoing legal questions.
A Sola spokesperson said the ruling “clearly acknowledges that helium is not a petroleum product and confirms the legal interpretation that helium is a mineral”.
“The [act] requires anyone extracting a mineral to obtain a mining right, which the Tetra4 Virginia Gas Project does not have. This creates a significant legal question which the appeal decision has not clarified,” said the spokesperson in a written response to Business Day.
Sola said it was considering further legal options, including asking a court to review the ministerial decision.
The group also rejected Renergen’s claims that the Springbok Solar development was unlawful, pointing out that the department of mineral & petroleum resources had suspended Springbok’s section 53 consent to allow for consultation between the parties, and confirmed that construction based on the existing consent was lawful.
Renergen’s Virginia Gas project covers about 187,000ha of gas fields across Welkom, Virginia and Theunissen in the Free State. The project is operated by Tetra4, a subsidiary of Renergen, which holds SA’s first and only onshore petroleum production right, granted in 2012 and valid until 2042 with options for renewal.
Renergen’s production right includes helium as a by-product of natural gas. The company’s Virginia gas fields have high helium concentrations, making it a potential major global helium supplier with about 200-million cubic metres of proven reserves valued at more than $4bn (R71bn).
The Virginia part of the project is divided into two phases, with phase 1, which began production in early 2023, expected to produce helium and liquefied natural gas (LNG).
Phase 2 is targeted for commercial production by 2027 and aims to significantly increase helium output and scale up LNG production for local consumption.
While Renergen’s urgent court application to halt Springbok Solar’s ongoing construction was not granted, the Bloemfontein high court has scheduled a full hearing for early June to review the matter.
Renergen CEO Stefano Marani said the decision closed the chapter on the question of their helium rights.
“The appeal was a tactical attempt to undermine our position during negotiations, but with this matter now resolved, we are confident that ongoing negotiations will yield an outcome satisfactory to both parties.
“Our focus now remains on ramping up production and delivering on our commitments as SA’s helium and natural gas producer.”
Sola said it continued to engage with the department and Tetra4 to resolve the matter amicably.
Update: May 26 2025
This story has been updated with new information.
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