Diversified miner Exxaro Resources, armed with both a Sustainable Growth and Impact Strategy and A Climate Change Response Strategy, hopes to garner investor interest at this year’s COP26 climate change summit.
The company has been setting out to become a principal driver of the just energy transition in South Africa over the past few years, all while targeting carbon neutrality by 2050.
Among the company’s decarbonisation initiatives is expanding its portfolio into manganese, bauxite and copper assets, which not only offer diversification away from coal – Exxaro’s primary revenue stream – but also offers access to minerals of the future, each being poised to experience major demand growth, or market shortfalls, over the next two decades.
The group also recently signed a landmark agreement to join forces with State-owned power utility Eskom and fellow coal miner Seriti Resources to jointly develop renewable energy projects, particularly at the mining companies’ Eskom-tied coal mining operations.
The decarbonisation benefits also extend to a reduction in value chain carbon emissions and contribution to a Just Transition.
Exxaro stakeholder affairs executive head Mzila Mthenjane tells Mining Weekly the parties are in the process of determining the scale and type of projects that can be developed, according to electricity needs.
He explains that partnerships and collaboration are key for mitigating and adapting to climate change, since no one company, government or society can address environmental or social challenges alone.
“Government brings with it the necessary policy changes, or incentives, for investment and certainty as far as regulation is concerned, which, in turn, can encourage the private sector to invest where [it is] certain of cost recovery and gains.”
As part of its growth and climate change strategies, Exxaro in April 2020 became the sole owner of renewable energy company Cennergi, which is currently undertaking a feasibility study for a 70 MW solar project in 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 contribute 229 MW of renewable energy to the national grid, as well as managing nine smaller solar plants or microgrids.
Cennergi is also engaging with other mining companies to provide them with bespoke renewable energy solutions.
Not only does this support Exxaro’s decarbonisation strategy, but it also contributes to decarbonisation of the mining industry and the country.
In the absence of an answer on how long the “coal runway” will be, Exxaro is focused on extracting as much value as possible from its coal assets during the energy transition and ensurinh that the company looks at areas of growth in renewables and other minerals.
The company estimates that 55% of its earnings will be non-coal based by 2030.
Speaking to other decarbonisation opportunities the company is pursuing, Mthenjane states that in the short term, Exxaro has plans for its truck fleet and in the medium to long term could incorporate battery storage on its mine sites, which will address both Scope 1 and 2 emissions, respectively.
He highlights that carbon capture and storage, for addressing its Scope 3 emissions, is an area of interest for the company, and the technology is still evolving.
However, in the meantime, a viable area of development is using nature-based solutions to create carbon sinks to offset emissions, such as repurposing of land for regenerative agriculture and sustainable agriculture practices. There is also a socioeconomic benefit that can be obtained from this approach that creates economic opportunities for third party investment.
But currently, to reduce Scope 1 emissions, Exxaro is prioritising fuel efficiency on large mobile mine equipment in its openpits, complemented with the use of pantographs to enable trucks to switch from diesel to electric driving.
The company remains a firm believer that a holistic environmental, social and governance strategy is the only way to achieve true business sustainability and stimulate economic growth.