JOHANNESBURG (miningweekly.com) – JSE-listed gold major Gold Fields has turned its methane curse at Beatrix gold mine into a R200-million carbon-trading and electricity-generation blessing.

The same methane that has killed miners will now initially be flared and later harnessed to produce 5 MW of electricity that represents 5% of the Beatrix mine's electricity needs.

That is merely the start of what Gold Fields intends doing with what is a seemingly infinite supply of methane, which emanates from underground geological faults, fissures and dykes, and escapes during the normal course of mining operations.

Methane is highly ignitable and between 1983 and 2001, explosions caused by the ignition of methane claimed 40 lives at Beatrix, one of the highest emitters of the gas among the Free State gold mines, Mining Weekly reported in 2007.

Just for the initial outlay of R42-million on the flaring of the gas, Gold Fields earns itself R200-million in carbon credits over seven years.

"That's a nice project with a one-year payback," Gold Fields CEO Nick Holland tells Mining Weekly Online in a video interview.

Holland estimates that to produce the 5 MW of electricity through a power plant will cost the company another R5-million. Construction of the power plant is to take place next year.

The methane gas will be captured at source underground and then conveyed through a network of pipes to the surface, where the methane will be flared. The installation of the underground pipes is well under way.

There is a lot more methane potential: "What we're capturing here is about 40% of the total methane on site. If this is successful, it could double in size," Holland adds.

The mine will continue to have methane intersections in the underground Beatrix mine, but this initiative enables Gold Fields to capture more of the gas.

"If we double the size of the project, which I think is eminently possible, then we can channel more of this gas in a coordinated fashion," he adds.

This is just one of a number of opportunities, but others are at a far earlier stage.

In methane-related projects, Beatrix is unique, because there are far larger emissions of methane there than in any other Gold Fields mine around the world.

"But there are a number of other opportunities around the world of installing ice plants that reduce water consumption, which is something we are working on now, and, in turn, reduce energy consumption," he adds.

Gold Fields is the world's first gold mining company to sell certified emissions reductions (CERs), the financial securities used to trade carbon emissions, and derives the CERs from the capture of Beatrix's methane.

The company will sell 1,7-million CERs to European energy trading company Mercuria Energy Trading South Africa under forward contracts, which run until 2016.

Carbon credit company TFS Green brokered the deal for the CERs to be sold to industrial companies needing to alleviate their own carbon emission obligations.

So far, CER projects in Africa comprise less than 2% of the total number of projects that the Clean Development Mechanism has registered.

The Beatrix project is reportedly one of only 15 South African projects that have received designated national authority from South Africa's Department of Mineral Resources.

TFS global manager Lucy Mortimer carbon mitigating projects in Africa and developing countries are a new focus.

It is Mercuria's first African carbon-trading transaction, following the opening of its South African office, spokesperson Jean Francois Steels reports.

South African company Promethium Carbon advised Gold Fields throughout the project's tender process.

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