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Profile - Badimo Gas founder and Gold Fields director Don Ncube - Financial Mail

Saturday, 7 May 2016

DON Ncube has spent the 11 years since the unbundling of diversified empowerment company Real Africa Holdings in pursuing his first love: resources.

Ncube is a true pioneer. Real Africa was one of the first empowerment companies when it was launched in the mid-1990s.

Ncube is almost 69 but he has lost none of his verve. He could sell ice to Eskimos and there’s a good chance he can motivate SA’s bureaucrats, who continue to dither about how to develop SA’s undeveloped gas resources.

In 2005 former JSE chairman Norman Lowenthal introduced Ncube to two Americans, petroleum engineer Brian Hughes and petroleum geologist Paul Tromp. Hughes and Tromp had worked in Wyoming’s coal-rich Powder River Basin and were eager to explore SA’s potential for coal bed methane (CBM).

CBM is gas emitted by coal seams. It can be extracted without fracking or mining the coal, cleaned and sold as compressed natural gas to replace diesel in vehicles or power stations or for industrial and household use. At present the only other natural gas available in SA is sold by Sasol through a pipeline from southern Mozambique, and there is not enough to satisfy demand.

Ncube formed Badimo Gas in 2006 (badimo means ancestors in Sotho) and was invited by the Botswana government in 2008 to examine their CBM potential. Depth and logistics made the Botswana CBM unviable at that point, but he continued with efforts in SA to acquire exploration rights and geological data.

Over the years, he has discarded an area of potential in the Soutpansberg because it was in Mapungubwe National Park. He has formed partnerships to secure capital for technical and financial expertise, ensuring Badimo is not merely a passive empowerment partner.

At this point, he has proven there is hybrid CBM/clean natural gas potential in a large area around Amersfoort and Volksrust. This is close to energy infrastructure, including roads and the Lilly gas pipeline, and to potential mining, manufacturing and commercial customers.

Since 2010, Ncube has partnered an Australian-listed company, Kinetiko Energy, in exploration.

Kinetiko raised A$10m on listing in 2011 on the basis of the data Badimo had accumulated and Kinetiko’s interest in those tenements. Kinetiko has 49% of the Amersfoort and Volksrust exploration sites while Badimo has 51%. Badimo is black-controlled by the Ncube family trust, with other shareholders.

“My aim is not to find something and just sell it on,” Ncube says. “I want to add to SA’s GDP and energy resources. The country’s energy constraints mean power is expensive and it is eroding our competitiveness and restricting economic growth.”

In a presentation in October, Kinetiko said one of the test wells, KA-03PT, flared more than 26mft³ of gas over six months, which would have realised $260,000 (R3,7m).

Badimo/Kinetiko are doing a gas pilot programme and are in discussions with potential offtakers and financiers, Ncube says. “I want to take this step by step,” he says.

“Our progress has to be realistic, objective and transparent. This is about building a long-term, sustainable business that adds value, not a speculative, big-bang approach.”


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