Exclusive: Renergen CEO heads to Washington to seek debt finance after Ivanhoe backing

By David Whitehouse
Posted on Friday, 1 April 2022 13:00

Stefano Marani, CEO of Renergen, speaks during the media launch of Renergen's working prototype cold-chain storage called Cryo-Vacc, in Johannesburg
Stefano Marani, CEO of Renergen. REUTERS/Sumaya Hisham

Renergen CEO Stefano Marani will be in Washington next week in a bid to secure debt financing for the second phase of the company’s Virginia gas project in South Africa.

The company is in talks with lenders for an unspecified amount of debt, Marani tells The Africa Report from Toulouse in France. The first phase of the project was financed by the US International Development Finance Corporation (DFC), which in 2019 agreed to lend $40m.

The Virginia project in South Africa’s Free State province will produce liquid helium and liquefied natural gas (LNG). The company is now largely done with raising equity after attracting two new major investors, Marani says.

South Africa’s state-owned Central Energy Fund (CEF) in March agreed in principle to invest 1b rand ($69m) into the project. CEF will carry out due diligence before making a binding commitment to invest in return for a 10% project stake. The planned CEF investment “shows that the country views our project as strategically important,” Marani says.

Also in March, Canada’s Ivanhoe Mines bought an initial 4.35% stake in Renergen as part of an agreement that could see its holding increase to 55% in return for equity funding of $250m. Renergen’s development of the country’s first commercial LNG facility at Virginia will supply Ivanhoe with power for its Platreef project.

  • The Platreef discovery, at Limpopo which is about 280km north-east of Johannesburg, includes palladium, rhodium, platinum, nickel, copper and gold.
  • Stable power supply from Renergen will allow the construction of the world’s largest platinum mine at Platreef, Marani says.
  • Renergen will ensure a reduced carbon footprint for the mine, notably through efficient air-conditioning power supply, he adds.

Helium ambitions

Renergen has stock market listings in South Africa and Australia. The company’s main resource is helium, which is used for industrial applications such as magnetic resonance imaging (MRI) scans, semiconductor manufacturing, fibre-optic cables, rocket launches and cooling nuclear power stations.

Marani’s aim is for Renergen to become a major global helium supplier by 2025. Semiconductors and rocket launches account for most of the consumption, and both industries are price-insensitive users of helium, he says.

The company has sold 65% of its phase two helium production and is keeping 35% for the spot market, Marani says. Spot prices for helium have been driven up by a range of factors which include an indirect impact from the Russia-Ukraine war.

  • There have been supply failures from Texas and Qatar already in 2022. In addition, an industrial accident halted supply from a Russian helium plant.
  • This would normally have taken about 18 months to fix, but the war in Ukraine and the decision by Germany’s Linde to pull out its engineers means the halt is likely to last much longer, Marani says.
  • Furthermore, the war is likely to mean the continued restriction of the normal helium supply from Algeria. As a result of the invasion, Algeria has been pumping natural gas to Europe without extracting the helium, as would normally have been the case, he adds.

Bottom line

Renergen’s LNG will be used to power mining of a range of minerals which the world will need for energy transition.

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