A "controlled activity" label means that companies seeking to use fracturing or any unconventional means of harvesting gas or oil will need to apply to the department for a water use licence. It also gives the department the ability to request additional information on the process from the applicant.
Molewa, speaking at a press briefing in Pretoria on Tuesday, clarified saying: "What this means is that fracking becomes a water use, thus requiring a water use licence. In this regard, only matters concerning water resources will be of consideration when licences are issued, including but not limited to the possible impact of substances and chemicals on the ground water resource."
The notice was issued on August 23, and the public now has 60 days from that date in which to submit comments on the matter.
Molewa said the interdepartmental task team set up in 2011 to consider the broader issue of a regulatory framework for and the monitoring of hydraulic fracturing in the Karoo has yet to conclude its work.
Hydraulic fracturing or fracking refers to the process of fracturing shale rock with high pressured water, chemicals and sand to release trapped natural gas. It remains a highly controversial topic globally. The practice raises serious questions about groundwater contamination and air pollution, and the possible effect of these on public health.
While fracking has been underway for several years in the US, Canada and Germany, it has been banned in France, and many other countries are still only conducting exploratory fracking.
According to the US Energy Information Administration, South Africa is among the top 10 countries in terms of technically recoverable shale gas resources with an estimated 390-trillion cubic feet of shale gas available.
It is estimated that hundreds of thousands of jobs could be created through the industry, which could boost the economy by up to R80-billion.
Government lifted a moratorium on shale gas exploration in September last year and several companies, including Shell, Falcon Gas and Oil, and Sasol have already applied for prospecting rights over areas of the Karoo.
Since then there have been indications that government hopes to exploit the resource to both secure the country's energy needs and drive job creation and growth.
Molewa's comments come weeks after trade and industry minister Rob Davies revealed that government could authorize shale gas exploration as early as next year.
Davies said the department wanted to "move" before the end of this administration and needed to advance the work on taking a decision on shale gas exploration.
This came just days after after Deputy President Kgalema Motlanthe told Parliament that scientists had advised government to allow fracking – which he referred to as a "game changer" – for the benefit of the economy.
On Tuesday, Molewa not be drawn on where she herself stands on the question of fracking.
"I'm not saying I want this personally. I want what’s best for our country, including in the water sector [and] the protection of our environment," she said.
Deborah Mochotlhi, chief director of regulation at the department of water and environmental affairs, also shied away from taking a stance on the matter.
"I'm not saying we're going for fracking. That’s a political decision to make. If we go that route we will do everything in our power as water resource managers to ensure that we prevent, mitigate and manage those impacts."
The Democratic Alliance said that the proposal would require extensive inputs and that should fracking be approved, every precaution should be taken to protect the environment.
"Stringent control measures must be put in place. Part of the stringent control measures is a proper charter to govern and regulate all actions and decisions involved in fracking," said Marti Wenger, the party's spokesperson on water issues.
Wenger noted that fracking has the potential to create thousands of jobs and as such could not be rejected out of hand.
"We need to do what is right for the environment and we need to do what is right for unemployed people who could benefit from fracking," she said.
Environmental group Greenpeace Africa however has remained skeptical.
"Molewa’s comments clearly shows that government is pushing ahead with fracking despite serious potential risks, particularly with regards to chemicals used, water use, pollution and contribution to climate change," said Melita Steele, energy campaigner for Greenpeace Africa.
"There is no doubt that fracking should require a water use licence but water use licences in and of itself will not safeguard South Africa's water resources."
She added that at the very least, government should require full disclosure on the chemicals used, regular monitoring and testing of the water in the areas being fracked, with a zero tolerance for polluted water.