Diverse miner Exxaro Resources, armed with both a sustainable growth and impact strategy and a climate change response strategy, hopes to spark investor interest at this year’s COP26 climate change summit .
The company is committed to becoming one of the main drivers of the just energy transition in South Africa in recent years, while aiming for carbon neutrality by 2050.
Among the company’s decarbonization initiatives is expanding its portfolio to include manganese, bauxite and copper assets, which not only offer diversification away from coal – Exxaro’s main source of income – but also offer a access to the minerals of the future, each poised to experience significant demand growth, or market failures, over the next two decades.
The group also recently signed a landmark agreement to join forces with the state-owned utility Eskom and its coal miner colleague Seriti Resources to jointly develop renewable energy projects, particularly in the coal mining operations of the mining companies linked to Eskom.
The benefits of decarbonization also extend to reducing carbon emissions in the value chain and contributing to a just transition.
CEO of Exxaro Stakeholder Affairs Mzila Mthenjane recount Weekly Mining the parties are in the process of determining the scale and type of projects that can be developed, depending on the electricity needs.
He explains that partnerships and collaboration are essential to mitigate and adapt to climate change, because no business, government or corporation can single-handedly address environmental or social challenges.
“The government brings with it the necessary policy changes, or incentives, for investment and regulatory certainty, which in turn can encourage the private sector to invest where [it is] some of cost recovery and earnings.
As part of its growth and climate change strategies, Exxaro became in April 2020 the sole owner of the renewable energy company Cennergi, which is currently undertaking a feasibility study for a 70 MW solar project at Lephalale.
Mthenjane says the plant will provide renewable energy for mining and associated activities at the company’s Grootegeluk complex in Limpopo.
Cennergi has built two wind farms in the Eastern Cape, which provide 229 MW of renewable energy to the national grid, as well as the management of nine small solar power plants or micro-grids.
Cennergi also engages with other mining companies to provide them with tailor-made renewable energy solutions.
Not only does this support Exxaro’s decarbonization strategy, but it also contributes to the decarbonization of the mining industry and the country.
With no response on how long the “coal trail” will last, Exxaro is working to extract as much value as possible from its coal assets during the energy transition and ensure the company is addressing the areas growth in renewable energies and other minerals. .
The company estimates that 55% of its profits will not be based on coal by 2030.
Speaking about other decarbonization opportunities the company is pursuing, Mthenjane says that in the short term, Exxaro has plans for its truck fleet and in the medium to long term could incorporate battery storage at its sites. mining, which will address both Scope 1 and Scope 2 emissions, respectively.
He stresses that carbon capture and storage, to fight against its Scope 3 emissions, is an area of interest for the company and that the technology is still evolving.
However, in the meantime, one viable development area is using nature-based solutions to create carbon sinks to offset emissions, such as reallocating land to regenerative agriculture and sustainable farming practices. There is also a socio-economic benefit that can be obtained from this approach which creates economic opportunities for third party investment.
But currently, to reduce Scope 1 emissions, Exxaro is prioritizing the energy efficiency of large mobile mining equipment in its surface mines, complemented by the use of pantographs to allow trucks to switch from diesel driving to electric driving.
The company remains firmly convinced that a holistic environmental, social and governance strategy is the only way to achieve true business sustainability and drive economic growth.