South African gold miner eyes biogas to power underground trains

* Sibanye Gold could be first to use gas-powered trains

* Locomotive tested above ground, underground testing next year

* If successful, project would cut emissions, improve health

By Wendell Roelf

CAPE TOWN, Oct 28 (Reuters) - A South African gold mining firm trying to cut carbon emissions and costs and improve the health of its workers could be the first globally to fuel trains with biogenic gas formed over millennia deep beneath the ground, one producer said on Tuesday.

Molopo South Africa, which holds the country's first and so far only onshore petroleum production license, said it was partnering with Sibanye Gold to start underground testing next year on a locomotive that has been converted from diesel to run on compressed natural gas (CNG).

Biogenic gas, produced by bacteria interacting with ancient decomposing plants to release methane, has been found in South Africa's Free State province, close to the mining operations of Harmony Gold, Sibanye Gold, and Petra Diamonds (LSE: PDL.L - news) .

Although there has been research into its use in powering trains, it has never gone beyond the prototype stage, experts say.

But the CNG locomotive was recently tested above ground and it managed to pull eight wagons carrying a 30 tonne load, the equivalent of those pulled by diesel engines, Stefano Marani, a director at Molopo, said.

"Which is a very big milestone to move to the next phase of what we believe is a world first," Marani told Reuters. There was also a massive reduction in diesel emissions, with big health benefits for mine workers.

If safety and gas distribution systems are successfully tested, the South African gold producer may start replacing part of its fleet of 570 diesel engines within two years, cutting down miners' exposure to potentially harmful emissions and saving fuel costs by around 25 percent.

This would potentially help meet demands by the South African government, which intends introducing carbon taxes and has warned companies of penalties in an effort to force industry to switch to cleaner energy and reduce emissions for the good of the environment and mine workers.

Karel Opperman, Sibanye's vice president of engineering, said the project would also help ease pressure on South Africa's constrained power grid.

"A successful implementation will greatly improve our working environment, reduce our carbon footprint, improve the efficiency of our operations," he told Reuters in an email.

Studies show that switching to natural gas from diesel could cut emissions overall by a third. Molopo, which sent its results to an independent laboratory for confirmation, expects to match or better this given the purity of the zero sulphur biogenic gas.

South Africa's untapped biogenic gas seeps to the surface along fissures and cracks from deep underground rocks in the Karoo Basin, a vast geological formation that covers about two-thirds of the country and contains the bulk of the coal reserves used for most of its electricity.

"Without showing any evidence of depletion this former mining hazard may become a biogenic renewable future energy source," South Africa's Petroleum Agency said on its website.

Molopo South Africa said it has measured amounts of recoverable biogenic gas at the Free State gas fields of just over 100 billion cubic feet with an upside potential of 1 trillion cubic feet, which was enough to power the country's gas-to-liquid Mossel Bay refinery for more than a decade. (Editing by Joe Brock and Susan Thomas)