Wednesday, March 14, 2007

RSA Biodiesel project on hold


R850m biodiesel undertaking put on hold
March 11, 2007


Johannesburg - An R850 million project intended to produce more than 40
000 tons of biodiesel a year and create more than 10 000 jobs in North
West has been put on hold.

In the past six months the 47 workers employed to start a nursery of 400
000 trees, including the renowned jatropha curcas oil seed tree, have
been laid off as initial funding has run out, while the North West
government and Diprojeke, the private company employed to manage the
project, have been haggling over ownership and shareholdings.

While the province has been pushing to take a 49 percent stake in the
blue-ribbon project alongside a proposed 51 percent for the Barolong
Bo-Rratshidi Development Company, an upliftment organisation, thereby
excluding the private sector, most of the 400 000 trees, worth R2
million, planted to kick-start the project are dying.

The current shareholding in the project is split between the development
company with 45 percent, the province with 25 percent and the private
sector with 30 percent.

Petro Naude, a director at Mafikeng Bio-Diesel, says the nursery workers
have been laid off since September because of insufficient funds. The
nursery employs 47 people. He says the project has the potential to
create more than 10 000 jobs over the next decade.

The North West unemployment rate for the period March 2005 to March last
year was 31.8 percent, the second-largest unemployment rate in all
provinces, Statistics SA figures show. Furthermore, Naude says the firm
lost the growing season, between September and March.

The trees that had been planted all have to be replaced. "The 400 000
trees that we had planted at a cost of R5 each are becoming useless.
About 300 000 trees are dying because it is hot and we have few staff
who cannot control the weeds and water them properly," says Naude.

Abe Tlaletse, the acting head of the North West economic department of
development and tourism, says the issues are more related to the
restructuring of the management of the project, which includes the
replacement or reinstatement of the former project manager, Diprojeke.

Last year the North West government promised to increase its initial
R4.7 million start-up investment in the project by R10 million. But the
money never arrived.

Tlaletse says the department has not issued the funds because of the
delay of submission of audited financial results by Diprojeke. "We
decided to withhold the R10 million until they showed us how they had
spent the initial funds."

The project includes the establishment of a nursery, the roll-out of
agricultural plantations, and the commissioning of the refinery.

Naude says the project can cover 60 000ha of plantations over the next
10 years.

Four tree species, jatropha curcas, moring oleifera, pappea capensis and
ximenia caffra, are to be tested for making biodiesel fuel from the
trees' seeds. All are thought to be suited to the semi-arid conditions
around Mafikeng.

Biodiesel can be used in any conventional diesel engine either as 100
percent biodiesel or in a blend with normal fossil diesel. "The
objective is to produce 20 tons of biodiesel per hour," says Naude.

The domestic demand for biodiesel at a 5 percent blend with fossil
diesel has been confirmed to be about 1.3 billion litres a year. The 5
percent blend of biodiesel with fossil diesel is a recommendation by the
JIC, the international centre of excellence in plant science and
microbiology, as a minimum for South Africa to reach the targets as set
in the objectives of the Kyoto protocol, to which South Africa is a
participant. The treaty was aimed at curbing air pollution blamed for
global warming by demanding a 5.2 percent cut in greenhouse gas
emissions, especially carbon dioxide, from industrialised nations by 2012.


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