A cold gusty wind whistles through the branches of hundreds of thousands of dust-weary bone-dry four-inch high scrub. This is the Karoo, southern South Africa’s desert, which has changed little in 250 million years. The valley creaks to its own song, carried on the wind through rusted windmills and crags of prehistoric rock.
These days, a new tune is in the air—fracking. Thousands of miles away big business rubs its hands at the prospect of drawing $100 billion (R1 trillion) revenue, within three decades, out of this land. Standing against this, are 3,000 landowners pledging millions for their fight.
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An estimated 485 trillion cubic feet of shale gas could be buried 4,5km below the Karoo, according to Econometrix, South Africa’s largest independent macro-economic consulting firm. The only way to get at it is through the so-called invasive mining underground, which has been used for no more than 15 years.
Farmers in the Karoo say this will destroy their livelihood. Johann Rupert, Africa’s second richest entrepreneur, who now lives in retirement on a farm in the area, is one of them.  Rupert made billions selling luxury consumer goods for Richemont and under his South African-based company Remgro. He has been shelling out hundreds of thousands of dollars, says Derek Light, a small-town lawyer from Graaff-Reinet defending his birthplace, in the Eastern Cape Province, South Africa.
“The bulk of the cost we have incurred so far has gone into research, to equip ourselves and to be informed. We have hired some of the best scientists to understand each step of the exploration, so that we can understand every aspect of the process. We won’t go to court unless absolutely necessary. It’s not first prize to us,” he says.
Thousands of farmers across the Karoo are following the billionaire’s example. Fifty five-year-old Dickie Ogilvie, who farms mohair near Aberdeen, has pledged R3 [R1=$0.10] for every hectare on his 14,000 hectare farm.
“Some guys have given a lump sum payment. Most of the other money is per hectare basis, from 20c to 50c up to R2-R3 depending on how strongly they feel about fracking. It might sound like a lot of money, but it’s actually nothing. If I lose my property, at the end of the day it’s not money at all, we’ve lost everything,” says Ogilvie.
“But how effective at the end of the day is it going to be? Are we going to be able to stop the workings of a huge company like Shell? Have we got the finances to do it? Or are we just delaying the inevitable? We might as well just close our doors and move on. Lord alone, help us if it does happen. My big concern, particularly in the Aberdeen district, is the apathy of a lot of the farmers. There are many who have pledged, there are many who haven’t and they are actually not even interested,” he says.
Fracking, or hydraulic fracturing, involves drilling underground and pumping a high-pressure mix of water, sand and chemicals to crack shale rock to release the gas.
Among the companies targeting this resource is Shell. They want to frack an area that is larger than Sierra Leone, an area of 90,000km squared. Jan Willem Eggink, the man charged by Shell to find viable oil and gas in Africa, believes if fracking is done correctly, it won’t harm the environment.
“I understand that people are concerned about it. If I was living in the Karoo, I would be concerned if Shell came to my farm and started drilling on it. I feel if I could talk to farmers in the Karoo and tell them what we planned to do, in most cases they would say ‘okay I now understand it and I am significantly less concerned’… What is true, I must admit, is there have been cases of gas leaking where wells have not been sealed off properly. You need to seal and test them properly.”
Eggink thinks fracking could be a game changer for the country. The South African government thinks so too. They estimate that fracking will create 700,000 jobs and make the country self-sufficient. Right now 70% of its gas is imported.
“The most logical one [use for gas] for South Africa, would be to convert it to power… I’m not saying gas is the only answer. Our view is that South Africa needs more energy than it can lay its hands on… The point is, if you operate at high standards, which Shell intends to do, then there is no reason why your water would be contaminated. You need good companies in place to operate this,” says Eggink.
Many farmers disagree.
Doug Stern farms sheep near Graaff-Reinet and has seen the damage first hand. He went to Pennsylvania, United States, as a guest of anti-fracking groups.
“The sealant material the industry will use can only consist of steel and cement. They are their only options. There are between two and 32 holes on each well pad. Assume that every well is drilled perfectly. However, with the Karoo being on an artesian formation, there is huge upward pressure from the subsurface. All of this over time is guaranteed to corrode the seals under the exerted pressure. The cement is going to crumble and the steal is going to rust, releasing impurities into our water and into the air. This will destroy our environment. You can do without gas, you can do without electricity but you cannot do without water. It’s the stuff of life,” says Stern.
“The amount of energy and effort that has to go into this particular resource, given the estimated lifespan, is disproportionate…we’ve already used up the gold reserves in this country. One of the aspects in mineral exploration that I was glad to leave behind was the sense that, while one is involved, you are party to the pillaging of the planet. My sense of reality, says it [fracking] ultimately will happen. It would be a sad day and the people in authority of this country to should be indicted if they enable it to happen before there are cast iron guarantees,” says Jeremy Harper, who worked for six years as an exploration geophysicist and whose farm, SandKraal, is in the fracking zone.
By spending his days buried in files, Light, the lawyer, has stalled fracking for five years. In 2008, one farmer objected to proposals by Sunset Energy, now Light represents thousands of farmers.
“If they had not objected, the government would have gone ahead with fracking in 2009, in a totally unregulated fashion. We wouldn’t even be here. The real issue is whether fracking can go ahead and if the country has the capacity and the infrastructure for it? Right now I don’t see it. So we will keep opposing them until it is safe,” says Light.
In September 2012, South Africa lifted its 18-month moratorium on fracking. The licenses have not been issued a year later, but look set to before South Africa’s elections next year, according to Rob Davies, the trade and industry minister of South Africa.
Matt Ash, director of Norton Rose Fulbright Sub-Saharan Africa energy, says the South African government wants gas to play a big part in its National Development Plan (NDP) for 2030, which estimates that the country will need 41,346MW of new power. The country currently has half that capacity with 33,000MW.
The controversy over fracking, according to Ash, stems from the country not having any fracking regulations.
“Under the present framework, a landowner is obliged to give mineral rights holder’s free and unfretted access to the land without compensation for the unhindered exploration of mineral resources. However, only a land owner can apply for rezoning of property appropriate for the mining activity concerned. The land owner can refuse to rezone on environmental grounds.”
According to Light, government decided to forego a strategic environmental impact assessment (EIA), a standard global practice. Light is worried that if gas is found, then the company has the right to drill, without proper regulations in place.
“Currently in South Africa there is no drilling legislation. The mining industry in the country has a shocking track record. There is a lack of observance of the laws as they are,” says Light.
Also in question is whether gas companies will pay for any damage to the environment.
“When these companies move on in forty or fifty years’ time there needs to be something to recover the environment. You have a fund to restore the land. There is inadequate financial provision made for rehabilitation. Inevitably for this country, the taxpayer has cleaned up the mess. The mining companies will spend money on what earns them money. They are not inclined to spend money on something that doesn’t generate income,” says Light.
Eggink says Shell will put money aside to repair the land.
This is unlikely to placate protestors. According to Light, there are still many more questions: Who will regulate fracking? How can gas be shipped out without an existing pipeline? Will the environment be able to cope with thousands of trucks grinding through the dust of the Karoo? Where will the millions of liters of water come from?
There are signs that the government is starting to listen to the worries of the farmers, says Light.
In September, Edna Molewa, the minister of water and environmental affairs, released a notice to declare fracking a controlled water activity.
“It means companies wanting to explore shale gas deposits under the Karoo will first have to get a water-use licence. Their water usage can be regulated,” says Light.
According to Eggink, it’s going to take 10 years to explore the area.  Shell will take two years to complete an EIA, once they have been given their licence. Most of the tests can be done above ground, he says.
“We would like to start drilling and demonstrating to the people of South Africa that these wells can be done in an environmentally acceptable way,” says Eggink.
Light says the farmers will push for fracking to be regulated more tightly, before a drill touches the ground.
“Our position is that until the gaps have been filled, we shouldn’t go ahead with operations… our plan is to challenge until it is guaranteed to be safe,” says Light.
In the Karoo it is said that farmers need to farm 25 years ahead. It is a place so delicate that tyre tracks can linger untouched for three years. It could soon be filled with the choking dust from thousands of trucks laden with shale gas, in a country where energy is needed. Until then, a small-town lawyer, some 3,000 farmers and a billionaire intend put up a roadblock.

No Fracking Way

The number of millionaires in Africa is rising faster than anywhere else in the world. Thanks to fast-growing economies and a thriving oil industry, the continent’s wealth is forecast to remain on the up. But where do Africa’s nouveau riche spend their money? For now, most jet to London, New York or Singapore to buy the latest fashion.
Hanneli Rupert wants to change this. She is the 28-year-old daughter of billionaire Johann Rupert, the CEO of Richemont, the Switzerland-based group behind top brands like Cartier, Dunhill and Montblanc. With her luxury brand store, Merchants on Long, she brings Africa’s top labels to South Africa, for most this is their debut.
“A lot of African high-end designers export directly without ever selling in their home countries or on the continent,” says Rupert.
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Housed in a double storey Art Nouveau building on Cape Town’s famous shopping mile, Long Street, the store delivers a true Cape-to-Cairo experience. Merchants is stocked with merchandise from Ethiopia to Nigeria, Sierra Leone, Cameroon, Senegal and Ghana, most of which is 100% handmade. Luxurious fashion items hang next to antique shelves filled with exquisite jewelry, bags, perfumes and homewares, while works of contemporary African artists and photographers grace the walls.
Rupert, who divides her time between Cape Town and the United Kingdom, says she modeled Merchants on London’s famous Dover Street Market, an über-trendy, multi-designer store with a glamorous feel.
“We fit into the idea of the aspiring, new Africa,” she says, while sipping a cappuccino.
Merchants’ in-house coffee bar only serves ethically-produced coffee grown on the continent, that can be drunk from crockery custom-designed for Merchants, by South African ceramicist Michael Chandler.
The store attracts a diverse mix of customers, ranging from European and American tourists to African business travelers and South Africans.
Before Rupert opened Merchants in late 2010, she spent close to a year traveling across the continent to pick and choose the designers she wanted to work with. She was looking for creatives who didn’t imitate European design but had developed a personal style linked to their African heritage.
“I want to grow an African aesthetic. I want Africa to be known as a hub for exotics and manufacturing, not only as an export haven for raw materials,” she says.
Since then, Rupert has worked tirelessly to put African designers on the global map. The Merchants pop-up store she opened in London last May, which received much praise, was the first step towards putting a global spotlight on African luxury goods.
“There is such a desire to see contemporary African design internationally. I am absolutely certain Africa is going to be the next booming art and design market. It’s already slowly happening,” says Rupert.
On the continent, too, the rich and trendy have taken note. In March, Rupert represented some of her designers at the annual Arise Magazine Fashion Week in Lagos, Nigeria; the labels were applauded for their style and quality.
“I want to showcase the manufacturing capabilities of the continent. People have a lot of misconceptions. When they think of design in Africa, they think of beading, not of sustainable trade. I wanted to give people a different perspective,” she says.
Rupert puts the new interest in African high-end fashion and design down to a wave of brain regain—a reversal of the brain drain of the 1990s, when thousands left the continent to pursue job opportunities overseas.
“There is a new trend of patriotism on the continent,” she says.
Rupert is part of that trend. She trained as a fine artist and painter and returned to South Africa, after a four-year stint in London and Athens, to start Okapi—a line of luxury leather handbags that feature springbok horns as talismans. She planned to launch an Okapi flagship store in Cape Town, but her father suggested that she open a multi-brand store first, to increase marketability.
“Merchants would never have happened without his advice,” she says.
Johann Rupert knows what he is talking about. He runs the world’s third largest luxury goods company, which he inherited from his father, Anton, one of South Africa’s most successful business tycoons. With £10 in his pocket in 1941, Anton Rupert started a multi-million dollar conglomerate that today spans luxury goods, finance, tobacco and mining interests, and encompasses hundreds of companies in 35 countries across six continents. The business later split into Remgro and Richemont. FORBES estimates the family’s net worth at $6.6 billion.
Two generations later, the luxury business is almost an inherent part of Hanneli’s genes.
“It’s having the access and growing up in an environment where you learn about business on a day-to-day basis. I learnt simple but important things from my father, like not underestimating your customer, and customer service being hugely important. I also learned to rely on my instincts,” says Rupert.
And her instincts tell her that there’s an increasing demand for authentic, ethically-manufactured African goods. She made this the overarching concept behind her Okapi label and Merchants on Long.
“There is a shift towards buying locally. People want traceability when it comes to what they eat. They want to know where it comes from. People start to want the same thing for clothes and design,” she says.
With entrepreneurship in her veins and an eye for opportunity, Rupert is set to make her mark as her family’s next generation of luxury business owners.

Tag: Richemont

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No Fracking Way

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