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Helium: South Africa strikes new 'gold'
- demauroy 5y agoI am not sure how precious helium is. The fact we put it in party balloons would hint at helium being relatively cheap (though those party balloons are typically 10$ each in France). On the other hand, I understand that it is a significant cost driver for industry.
- kymaz 5y agoIt is currently cheap, but if it's all bled off into space through party balloons and we run low, it's not gonna be cheap any more. With this news I guess it's not as precious as it was last month...
- VintageCool 5y agoThe US maintained a strategic helium reserve for decades (originally for airships). Then people started producing helium as a by-product of natural gas drilling, and the government bought helium from private natural gas producers. The helium reserve became less important, and larger, and deeper in debt. In the 90s, Congress ordered that the strategic helium reserve sell off most of its helium. That tanked the price, which meant it was affordable for party balloons. It also hurt the business of natural gas producers also producing helium. But helium can also leak irrecoverably out the atmosphere. We should try to hold on to some of it.
- wahern 5y ago> helium can also leak irrecoverably out the atmosphere. Won't all atmospheric helium be lost to space? See https://en.wikipedia.org/wiki/Atmospheric_escape#/media/File:Solar_system_escape_velocity_vs_surface_temperature.svg https://en.wikipedia.org/wiki/Atmospheric_escape#/media/File... Jupiter, Saturn, Uranus, and Neptune are the only planets that can retain helium, AFAIU.
- nabilhat 5y agoIt's much cheaper than it should be if we're considering hard limits on available supply and lack of interchangability of other resources. Honestly it shouldn't be cheap or expensive, in a perfect world it would be regulated, but here we are. It's so cheap that it's commonly used as a welding cover gas as a way to reduce electricity cost and to squeeze more work out of cheaper, lower power equipment. Recycling in the form of capture of storage boil-off, or even collection/retention of helium that can be safely vented from legacy equipment costs substantially more than just throwing it away forever. But it's useful in ways that nothing else is. MRI is the biggest example, and the largest consumer of helium. There's a whole niche of magnetics that needs helium until science comes up with better magnetics, if that's possible. Something that doesn't get a lot of detailed attention is leak detection, because there's nothing else that leaks nearly as well (hydrogen molecules are larger than helium atoms!), not to mention safely, as helium. A leaking vacuum jacket means substantial loss of insulation and increased boil-off. Leaking storage of gases is always dangerous - either it's flammable, or poisonous, or an asphyxiant because it's not oxygen, or it is oxygen and everything else is on fire. The process of using helium used for leak detection involves introducing helium into a vessel and looking for helium on the other side. The leak detector itself is a portable mass spectrometer. Leak detection and repair is an extremely rare skill set at any meaningful level of quality, depends on extremely specialized equipment, and it's as expensive as it sounds. If there was a better option, this leak detection niche for helium would be an academic novelty. Anyway, if this helium source is what it claims to be, it's significant - about 60 years of current production. https://www.usgs.gov/centers/nmic/helium-statistics-and-information https://www.usgs.gov/centers/nmic/helium-statistics-and-info...
- choeger 5y ago> Natural gas is what Stefano Marani and Nick Mitchell had on their minds when they bought gas rights on this 87,000-hectare piece of land in the Free State province in 2012, for just $1. How can someone sell the gas rights for just $1? Whatever they find must be worth more, no? Is there a tax involved when someone extracts resources?
- lazide 5y agoOften the resources can be unproven (so a gamble) or uneconomic to extract (so net negative economically), combined with some degree of other liability like taxes, security issues, bad infrastructure that needs replacing, etc. That can change if it turns out the actual resources are more valuable, easier to extract, or the liabilities can be resolved with significant investment. Sometimes people throw millions at things too, and don’t really break even. We can’t really see their books here, so we don’t know.
- Turing_Machine 5y ago> How can someone sell the gas rights for just $1...Is there a tax involved when someone extracts resources? I don't know anything about South African law, but in my home (Alaska) these rights are typically put up for public auction, and yes, there is a further "severance tax" levied on any production that may eventually occur. The (relatively low) auction price is just to lock in exclusivity, generally for a limited length of time. One reason that the initial leases are low is that the actual amount of gas or oil on the property is generally unknown until you get out there and start drilling holes, or at least doing some seismic mapping. If you find oil or gas and wind up producing it, you then have to pay taxes on that, but if there's nothing there, you haven't wasted your money. Not all states have a severance tax, though.
- yumraj 5y agoI'm more interested in knowing how do I buy gas rights for 87,000 hectares for $1. Any pointers?
- jimbob45 5y agoIt's possible China already owns the rights via their Belt and Road loans.
- latchkey 5y agoI spent two years on a motorbike all over Vietnam, Cambodia and Laos. I've seen the effect of this first hand. It isn't pretty.
- hypertele-Xii 5y agoMay I press you for a more detailed anecdote?
- latchkey 5y agoChina has built railways and roads all the way to Sihanoukville (google this, tons of articles). If you look on a map, this gives them great shipping access to South Africa that doesn't involve dealing with Myanmar or Thailand. It totally destroyed the small town and surrounding area. Turned Sihanoukville into fighting, gambling and whores like straight out of a Western. In order to do this, they bought up all the land from the locals. To power it all, they built dams along various rivers including the Mekong. Part of it was promises of providing electricity to communities, but it is really just a money grab. It is all an utter eco disaster. Nobody cares cause it is all "developing nations". Tunnels straight through mountains (or just level them entirely). Zero concern destroyed forests. Buying up all the land from the locals so they could move their own families in and then charge the locals rent. Property prices got pushed up such that locals can't even afford land in their own country. The dams have screwed up natural water flows so now there are drought and floods. Nam Ngum Reservoir in Laos shows up on Google maps full of blue water, but if you go there, it is empty. There is interesting economics around USD in Cambodia too... becomes a great place for China to launder USD. They have their own currency, which is conveniently 1:0.25. The rare time you spend local currency, you get change in quarters. None of this gets much news coverage, but google a bit and you'll find it all. Stuff like this... https://www.intrepidtravel.com/adventures/why-we-no-longer-travel-to-sihanoukville/ https://www.intrepidtravel.com/adventures/why-we-no-longer-t...
- blakesterz 5y ago"Renergen estimates its helium reserve could be as much as 9.74 billion cubic meters—larger than the known reserves in the entire United States. That's enough to fill about 1.4 trillion party balloons." I love it when articles have random units of measurements like that!
- giarc 5y agoNot really random given most people interact with helium in the form of a balloon, however I would say that no one on Earth could comprehend 1.4 trillion balloons.
- latchkey 5y agoAre they big or small party balloons?
- HappyDreamer 5y agoAssuming medium size, then, @giarc: > I would say that no one on Earth could comprehend 1.4 trillion balloons Consider this: If everyone on the planet got 1 party balloon every month, we'd deplete that helium source in about 10 years.
- twic 5y agoThe song '99 Luftballoons' / '99 Red Balloons' was released 38 years ago, and sold 2,866,500 certified copies. If everyone who bought a copy listened to it twice a week since it came out, and released 99 balloons every time they did, they would have released 1.1 trillion ballons.
- 11thEarlOfMar 5y agoSorry to burst your balloon, but there isn't enough rubber.
- dorkwood 5y ago
- nradov 5y agoThis is good news for scuba divers. Helium prices have increased by a factor of 10×.
- bpodgursky 5y agoTbh scuba diving is kind of a waste of helium, and I'd rather they not use a nonrenewable resource for recreation.
- nradov 5y ago"Waste" is in the eye of the beholder. We also use a lot of nonrenewable fossil fuels and plastics for all types of recreation. Should that all be prohibited? Most refined helium is a byproduct of natural gas production. If we don't use the helium then natural gas drillers will just vent it into the atmosphere.
- bpodgursky 5y agoNonrenewable fossil fuels are a waste of energy and pollute, but there are both natural and artificial means to undo the damage, sequester the carbon, or produce gas out of biofuels etc. When you use helium, it literally floats to the top of the atmosphere and escapes into space. It's never, ever coming back. It's a totally different class of "nonrenewable".
- nradov 5y agoIf we don't use the helium then natural gas producers just vent it into the atmosphere anyway. Helium is somewhat renewable because more is constantly created by underground decay of radiative isotopes.
- m4rtink 5y agoOne could likely produce helium, if really needed, in net negative hydrogen fusion devices, at very high energy cost.
- leo-leo 5y ago
- nightowl_games 5y agoI've been keenly observing this company as an investment oppurtunity: https://royalheliumltd.com/projects/saskatchewan-helium-play/ https://royalheliumltd.com/projects/saskatchewan-helium-play...
- rackjack 5y agoInteresting! If you don't mind me asking, what is your thought process for investing in foreign companies (assuming you don't live in Africa)? Besides the S&P 500, I have always felt a little uncomfortable investing in any company that's not within a 60 (-ish) minute drive. I feel too divorced from reality and the physical process of buying and selling goods when they're far away.
- KingMachiavelli 5y agoI guess first off does that 60 minute drive mean driving to their headquarters or just a storefront? But if you mean any kind of presence/impact than even companies quite far away can be found. You can find products made by companies across the globe literally in the device you are using right now. In my opinion that means a lot more than having a storefront by chance near by.
- deleted 5y ago[deleted]
- geenew 5y agoIt's run by CPAs, not PGeos.. something to note. Very generally speaking, having a company run by technical professionals is better than having a company run by financial professionals. Still, an interesting find, worth looking into.
- reuben364 5y agoI've heard this a lot recently in regard to Intel's latest CEO coming from an engineering background. I can intuit it, but is there something to back up this claim?
- bob229 5y agoanyone who uses helium in a balloon should be imprisoned
- hairytrog 5y agoThis could also help the planned helium cooled nuclear reactors like this one: https://usnc.com/mmr/ https://usnc.com/mmr/
- viburnum 5y agoHow do you write an article like this and not mention the climate crisis?
- bawolff 5y agoIts not like climate change is new. Why would it be mentioned ?
- Havoc 5y agoMore curious as to why this is making news again now. Renergen and their 12% find has been know for a while. Like two years maybe? Recall toying with the idea of investing
- ranma4703 5y agoI'm real curious in the details behind their $1 purchase of this asset that turned out to be worth billions. Smells shady to me.
- unwoundmouse 5y agoYeah this doesn't make sense to me either. If you assume the gas rights for all the land on the earth is priced that low (it isn't) you could buy all it for $1mm. Also, I can't imagine the seller would be like "hmm, this guy wants to buy gas rights on 87,000 hectares of land for $1. Sounds like a good deal!" without thinking maybe there was something special and investigated for themselves first.
- denni9th 5y agoLand is cheap in that part of South Africa, but certainly not that cheap. For reference, [1] is 231ha of almost undeveloped land listed for about $100000. I suspect it is tax evasion or a nepotism deal. [1] https://www.property24.com/for-sale/bloemfontein-rural/bloemfontein/free-state/12674/110568530 https://www.property24.com/for-sale/bloemfontein-rural/bloem...
- dimitar 5y agoThey own the land but not actually the minerals or gas - they still have to get a permit from the government to to extract.
- 5y ago
- mensetmanusman 5y agoI know many in this audience might be familiar, but this story of helium disrupting the mems clock in the iPhone is so good: https://www.ifixit.com/News/11986/iphones-are-allergic-to-helium https://www.ifixit.com/News/11986/iphones-are-allergic-to-he... The fact that there are these cities of silicon in our pockets is amazing: https://images.app.goo.gl/qnNSArgbfxPHTyqk7 https://images.app.goo.gl/qnNSArgbfxPHTyqk7
- amelius 5y agoMakes me wonder why it is so difficult to create an airtight package for the mems device, even considering that helium is small. Also, what happens to an iPhone if you bring it near an ultrasound source with a carefully chosen frequency?
- zakary 5y agoIt’s difficult with helium because the atom is so small that it can effectively penetrate the gaps in the atomic structure of almost any solid material given time. Even solid iridium can have small amounts of helium leach through. Re ultrasonics - for some MEMS devices yes this can absolutely break things, but because the devices are so small, the resonant frequencies can often be in the hundreds of KHz or even MHz and most ultrasound transducers only produce sub 100khz frequencies
- amelius 5y agoInteresting. Since this is hacker news, I'm hoping someone could try the ultrasound part.
- fMwhy 5y agoI wanna know who selling 87,000-hectares of land for $1
- Synaesthesia 5y agoGas rights for the land, not the land itself