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Natu ral gas will take an increasingly important place in South Africa's energy market, rising to almost 10% of primary supply, minerals and energy Minister Phumzile Mlambo-Ngcuka said yesterday.

Opening debate on her department's Budget vote in the National Assembly, she said a planned pipeline from Mozambique alone would increase natural gas contribution to more than four per cent.

"One expects the contribution of natural gas to South Africa's primary energy supply to rise from its present 1,5% to nearly 10 per cent".

The pipeline from the Pande and Temane gas fields in Mozambique to Secunda had a capacity of 120-million gigajoules, and the first gas was scheduled for February next year.

The Gas Infrastructure Plan envisaged a national and regional gas transmission network from Namibia to Cape Town, and around the east coast through Mossel Bay and Coega to Durban.

It sees gas carried from the west coast through Sissen to Gauteng, as well as the existing pipeline from Gauteng to Richards Bay and Durban, she said.

Regarding the local currency, which has strengthened to below R8 to the US dollar from an all-time worst of R13,85 in late 2001, the minister warned against mining companies rushing to retrench workers during tougher times.

The industry faced the challenge of commodity cycles, and was affected by currency fluctuations, with a stronger rand impacting on mining company profits.

"Some of our producers threaten to retrench workers, which we think is very disturbing, and hope they will not proceed in that direction.

"This raises questions about the business model, which relies on retrenching workers when the profits are lower and always rewards management in good and bad times, in an industry where volatility is a given".

Mlambo-Ngcuka said the mining sector enjoyed its first rise in employment last year in 16-years.

"A very pleasant surprise has been the fact that preliminary figures show a 1,5% rise in employment from 407 154 in 2001 to 413 087 in 2002".

The minister said a new dispensation for junior and small-scale miners, with the establishment of the Small-Scale Mining Committee, would help to complete a series of job-creating projects.

This included, amongst others, setting up a kaolin processing plant and ceramic producing project in Ndwedwe, KwaZulu-Natal; a phosphate mine in the Western Cape for use in the agricultural sector; and setting up a dedicated diamond processing plant in the Northern Cape.

The projects, at full capacity, were expected to create at least 1 500 direct jobs, she said. – Sapa.

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