PRETORIA, Sept 3 (Reuters) - Companies seeking shale gas exploration permits in South Africa will need to apply for a water usage licence, the country's water and environmental affairs minister said on Tuesday.
South Africa last year lifted a moratorium on shale gas exploration in its Karoo region, where the extraction technique known as fracking might tap what is believed to be some of the world's biggest reserves of the energy source.
That decision aroused criticism from environmentalists who say water supplies could be polluted by fracking, in which pressurised water, chemicals and sand are pumped underground to release gas trapped in shale formations. Water is also a scarce commodity in the vast, semi-arid Karoo region.
"I have taken the decision to issue a notice of intention to declare fracking a controlled activity in terms of the National Water Act ... What this means is that fracking becomes a water use, thus requiring a water use licence," water minister Edna Molewa told journalists.
The regulatory process around fracking in South Africa has been slow and no exploration permits have been issued yet.
Companies that have expressed an interest in exploring South Africa's shale gas potential include Royal Dutch Shell.
Developing just a 10th of South Africa's estimated resources could boost the economy by 200 billion rand ($19.56 billion) a year and create 700,000 jobs, a study, commissioned by Shell and carried out by research firm Econometrix, said last year.
But environmentalists have raised the alarm about fracking in the country, which has a large network of conservation groups and a history of green activism.
The sparsely populated Karoo is renowned for its rugged scenery and is home to rare animal species such as the mountain zebra and riverine rabbit, putting it on the radar screen of conservationists.
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