A start-up business from South Africa collected a huge windfall after unearthing a rare resource underground in a field it was conducting experiments on.
Renergen, self-described as an emerging integrated renewable energy producer, purchased the rights of the grounds for approximately 79p back in 2013. According to the company’s CEO, Stefano Marani, when the firm began testing it found a small natural gas reserve that could power nearby mining opportunities.
The tests found that the gas flowing from two pipes they uncovered had been installed many years before as part of mineral exploration on the site. And within it, large concentrations of helium were found.
Helium, while known as a product which can expand balloons, has a number of unique qualities when a liquid form. These include being a vital cooling component used in microchips.
It is also used within life-saving MRI scanning tech. Despite its importance, the market for helium can be volatile.
Less than a dozen countries actually produce the gas – but for Renergen it had unearthed a cash cow that would give it billions. According to CNN, the company’s helium reserves are north of seven billion cubic feet at its Virginia Gas Product.
This site alone has a worth of £3.15bn ($4bn) – a value that can be raised up to £9.5bn ($12bn) when other reserves are included.
Nick Mitchell, Renergen’s chief operating officer, said: “We had humble, modest aspirations of setting up a small scale [gas] power station that could deliver a couple of megawatts to some nearby mining opportunities. We had no idea of the extent and scale and the sheer world-class nature of this helium deposit.”
The company made a major breakthrough in January last year when, for the first time, it successfully produced liquid helium.
Experts say that the true value of Renergen’s natural gas reserves is its unusually high concentration of helium. According to Mr Marani, the helium his company has boasts an average of three percent concentration on average but can reach 12 percent.
In the US, for example, where the world’s biggest helium producers operate, it has a concentration average of 0.35 percent. Qatar has a level of just 0.04 percent, the US Bureau of Land and Management says.
Chris Ballentine, chair of geochemistry at Oxford University, added: “What makes the Renergen prospects so interesting is that (while) there are hydrocarbons associated with their helium production, it’s a much smaller footprint. They’ve effectively found a primary helium gas system.”
