< Go Back

Thungela commits R400m to South Africa’s first coal bed methane

Thungela Resources’ Lephalale Coal Bed Methane (CBM) project in Limpopo’s Waterberg coalfield is advancing as a significant domestic gas demonstration plant and South Africa’s only coal bed methane initiative. The project, now in the feasibility stage and under exploration since 1992, has successfully simulated five wells to date.

A capital investment of R400 million has been made for the acquisition of a modular liquefied natural gas (LNG) plant and associated site infrastructure. The LNG produced will initially generate power at one of Thungela’s operations, helping to alleviate load curtailment during electricity shortages.

The company said the project has undergone extensive geological exploration, technical testing, and environmental monitoring over more than 20 years, with no reported incidents of water contamination. It has demonstrated that low-pressure, low-volume hydraulic stimulation is a safe and controlled method for gas extraction.

July Ndlovu, Thungela chief executive officer, said, “South Africa’s transition requires a balanced mix of energy solutions working together. Coal bed methane is part of that future, a reliable, lower-carbon gas source that complements renewable power and can potentially stabilise the grid, and fuel economic development.

We have successfully completed a 10-year pilot production test, complemented by over 20 years of continuous water monitoring. This extensive work has yielded valuable technical insights into the geology and long-term environmental performance of the site.”

In January 2025, a bulk sampling programme was approved to assess the feasibility of LNG production and transportation, enabling the development of the demonstration plant. Once commissioned, the LNG plant will supply gas to a power generation facility at one of Thungela’s existing operations.

Minister of Mineral Resources and Energy, Gwede Mantashe, visited the project site together with senior department leadership to observe progress. He emphasised the importance of gas as a transitional energy technology vital for economic growth, advocating for a balanced approach combining gas development and environmental protection.

Thungela noted that the Minister’s remarks align with their approach of responsible innovation, environmental stewardship, and long-term value creation. Ndlovu added, “Our vision for this project extends far beyond energy production. It has the potential to unlock further infrastructure investment, local business participation, skills transfer and development.

Over time, it will stimulate the development of new industries and markets, drive demand for local goods and services, and strengthen municipal revenues fostering a sustained cycle of regional growth and economic resilience.”