Energy and Mines Magazine - Issue 38

Interview with Chris Griffith, CEO, Gold Fields: How renewable energy helps Gold Fields meet ESG obligations Achieving the Zero-Carbon Dream CEO Interview: Cobus Loots, CEO, Pan African Resources Is Net-Zero slowing progress on climate change? The answer might be yes.

Issue

38

January

2022

Interview with Chris Griffith, CEO, Gold Fields:

How renewable energy helps Gold Fields meet ESG obligations

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n advance of his keynote presentation at the Energy and Mines Africa Virtual Summit on February 22, Gold Fields CEO, Chris Griffith outlines how one of the worlds largest gold mining firms aims to reduce net carbon emissions by 50%. He also details how Gold Fields is now considered a leader in the use of renewables in mining projects.

Energy and Mines: How is Gold Fields’ focus on climate change and ESG driving energy decisions for your operations?

Chris Griffith: When Gold Fields started on its climate change journey in 2016, the key considerations were energy supply security and costs.

In many of our remote mines it made sense to look for energy projects that are closer to the mine and reduce our dependence on the grid. At the same time costs of renewables were becoming more competitive and by now renewables are largely cheaper than coal or gas fired power.

But apart from costs and supply security factors, our impact on the changing climate was clearly a key consideration even back in 2016. Today it is undoubtedly a key driver as climate change is – in my view – one of the most defining societal challenges of our time with rising temperatures having a critical, damaging impact on the environment and populations around the world. The impact of climate

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“Our focus on ESG now impacts all our operational decisions”

CHRIS GRIFFITH CEO

GOLD FIELDS

change on our people, communities, and our operations is equally important and as such our focus on ESG now impacts all our operational decisions, with energy strategies an obvious focus.

In December last year – after a year of extensive research by all our mines – we committed to net emission reductions of 30% by 2030. Taking cognisance of the fact that we plan to raise our production profile over the same period, this translates to 50% absolute emission reductions by 2030. And – like many of our peers – we are targeting Net-Zero by 2050 as we are a signatory to the Paris Agreement.

E&M: What role do you see for renewable energy in supporting Gold Fields’ commitment to reduce scope 1 and 2 carbon emissions by 2030?

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Image from the Agnew Mine courtesy of James Koerting, Gold Fields from Energy and Mines Australia, August 2020 presentation.

CG: Renewable energy projects have already contributed to our 10% absolute emission savings between 2016 and 2021, though the majority of these savings would have come from energy efficiency initiatives. During 2021 renewables accounted for about 5% in the Group energy mix from 1% in 2016. This is largely due to the two completed renewable microgrids at our Granny Smith and Agnew mines in Western Australia. Agnew is home to Australia’s largest hybrid renewable microgrid, and is first to power a mine with mainly wind-generated electricity. It delivers up to 50-60% of the mine’s energy needs. Up to 85% in good weather conditions.

How do we get to 30% net and 50% absolute emissions savings by 2030, given that approximately 2/3rd of our emissions are linked to our electricity usage, with the South Deep mine in South Africa by far the highest emitter in the company?

“Two-thirds of our planned 2030 reductions will come from the introduction of green energy sources with the focus on replacing our gas and coalfired electricity with renewables”

CHRIS GRIFFITH CEO

GOLD FIELDS ENERGY AND MINES MAGAZINE

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Firstly, we have a number of renewable energy projects currently being built or finalised: Our Gruyere mine in Western Australia will commission its microgrid later this quarter. And in South Africa we expect to have about a quarter of South Deep’s power provided by a 50 MW solar plant later this year. Apart from delivering significant cost savings it will achieve emission savings of 109kt CO2. Also planned is a 10 MW solar plant at Salares Norte in Chile to be commissioned when the mine is scheduled to start operating in Q1 2024 In total and in line with our emission profile, two-thirds of our planned 2030 reductions will come from the introduction of green energy sources with the focus on replacing our gas and coal-fired electricity with renewables. The other third in emission

Image from the Agnew Mine courtesy of James Koerting, Gold Fields from Energy and Mines Australia, August 2020 presentation.

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savings will come from further operational energy efficiency initiatives as well as gradually replacing our diesel powered fleet with electric, zero emission vehicles. By 2030 we envision that renewables will account for about 70% of the Group energy mix and by 2050 this will obviously have to be 100%.

E&M: How are investors and major customers responding to Gold Fields’ updated ESG targets and progress with renewable energy?

CG: I believe that Gold Fields is considered a leader in adopting renewables in the mining industry by many stakeholders, having embarked on this journey in 2016 and given the high public profile of our projects to date, particularly the Agnew microgrid in WA. For ESG investors a commitment to green energies and ambitious emission reduction targets are a must if they are even to consider investing in a company. This approach is increasingly being adopted by mainstream investors as well; as such our ESG targets and investments in renewable projects have ensured that we are on the right track. For the most part, ESG investors still ENERGY AND MINES MAGAZINE

“For ESG investors a commitment to green energies and ambitious emission reduction targets are a must if they are even to consider investing in a company.”

CHRIS GRIFFITH CEO

GOLD FIELDS

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Image from the Agnew Mine courtesy of James Koerting, Gold Fields from Energy and Mines Australia, August 2020 presentation.

stay away from the mining sector at large, but at least we do have the active support of our main shareholders through our ESG commitments.

“Building on our leading commitment to ESG” is one of our three new strategic pillars we announced in December and I believe this will further enhance our credentials with both ESG and mainstream investors and, of course, our existing shareholders and other stakeholders. We don’t have customers as our gold is sold directly to a small group of bullion banks. But we have seen that our focus on ESG is playing well with other 8

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“Our focus on ESG is playing well with

key stakeholders, particularly our employees, who take pride working for a company that is doing its bit in battling climate change. Furthermore, in our recruitment drive we are finding that the younger millennials also respond well, given that we are considered an ESG leader in our sector.

Chris Grifitths’ keynote presentation, ESG, Climate and Energy Priorities and Strategies, takes place February 22nd 9:05 AM SAST.

key stakeholders, particularly our employees, who take pride working for a company that is doing its bit in battling climate change”

CHRIS GRIFFITH CEO

GOLD FIELDS ENERGY AND MINES MAGAZINE

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Achieving the Zero-Carbon Dream

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ransitioning to zero-carbon mining is a global trend and Africa is no exception. African mining companies are committing to ambitious climate and decarbonisation goals which has created new urgency for integrating lowcarbon technologies to meet these targets. Peter Drager, Head of Development - Hybrid and Offgrid - EMEA at juwi Renewable Energies, discusses key trends, projects and technologies contributing to the net-zero journey.

Courtesy of juwi Renewable Energies

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Energy and Mines: What are the main considerations of building a roadmap to zero-carbon mining for African mining operators?

PETER DRAGER HEAD OF DEVELOPMENT - HYBRID AND OFFGRID

JUWI RENEWABLE ENERGIES

Peter Drager: The African continent is an interesting market in that it is made up of numerous countries with varying political structures and electrification strategies, so there is no one-size-fits-all approach. Each jurisdiction (or even each specific mine/location) has its own set of constraints and opportunities that require a specific technical and commercial approach, whether it be a grid-connected mine in South Africa or an off-grid mine in Egypt. A key consideration is the lack of maturity in local regulations around power generation, which limits the contracting options or adds uncertainty around key commercial inputs to the project financial model.

A key trend we see at the moment is jurisdictions transitioning from a monopoly-run power generation structure to a more distributed system with various ownership structures. This is a very positive move, however, it does require time for regulatory structures and frameworks to evolve/change into an efficient system.

There are other considerations that add complexities to developing long term net-zero roadmaps such as political instability, resource price uncertainty, and security challenges, however, mines in Africa are fortunate enough that there is no uncertainty around the commercial and ESG benefits of implementing renewable energies at their mines as the cornerstone of the net-zero/decarbonization process in the coming years.

E&M: What are some of the key considerations for mines looking to achieve the lowest cost of energy for their

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operations with today’s technologies?

PD: There are a number of factors that are assessed by juwi as part of determining the most cost-effective energy solution for mines, and in most cases, the optimal solution is quite site-specific as it is based on an assessment of the existing electricity supply options, life of mine, the available renewable energy sources and project financing costs.

Furthermore, the renewable energy options and cost are determined by a few important considerations, including the available land area on the mine site, proximity to an existing grid, access to off-site solar/wind facilities through existing grid infrastructure (“wheeling”), reliability of the existing electricity supply, the required integration technologies and the wind/solar resource at the site. Often the lowest cost form of electricity is from on-site solar PV or wind generation that is coupled with cheap project financing, either directly from the mine or from a third party IPP. It is also worth noting that there has recently been a lot of focus on assessing how integrating the mining loads with the power generation system (or changing the mine operating times) can reduce the cost of energy, as shifting mine load to times of high renewable energy generation can yield cheap or free energy. This will become quite a significant opportunity in the future when the amount of excess renewable energy increases.

E&M: How are the operational results from juwi’s hybrid projects for African and Australian mining companies informing current projects and proposals for renewable energy for mines?

PD: Having teams that have developed and deployed projects ENERGY AND MINES MAGAZINE

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on mine sites in multiple countries has no doubt generated experience that is highly valuable to juwi, but also the industry as a whole. In the early stage of markets, proof of concept is quite important for key stakeholders to be confident in moving forward with particular technologies.

This is evident in the DeGrussa project proving the technical capability of such projects and thus opening up a number of opportunities in Australia and around the world, and also the Elikhulu project in South Africa, which is important in blazing the regulatory path with Eskom to ease the process there; juwi has 11 off-grid / mining projects either completed or under construction in Australia and Africa, and we have found that the intricacies of these projects have informed how we develop and plan for the future, particularly the following items: Development of our juwi HYBRID IQ micro-grid control system and pushing the envelope on maximizing RE penetration (or minimizing curtailment) and also integrating with mine-site processes; understanding where the solar PV / Wind / BESS market is at from a cost perspective so as to ensure that the correct balance of RE penetration and LCOE is maintained – in most off-grid sites the best solution (if mine life allows it) is a combination of on-site solar PV, wind and battery storage integrated with the existing generation source.

From a regulatory perspective in South Africa, we are seeing tangible improvements, but challenges remain in the details of grid interconnection regulation and associated costs.

Again, there is no one-size-fits-all approach for these projects, so strategic planning, engineering, and development are required from an earlier stage for projects to be a success.

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Courtesy of juwi Renewable Energies

E&M: Can you share details of any new renewable energy projects with African mining operators and/or trends you are seeing in the region in terms of appetite and demand for renewable energy for mines?

PD: Similar to where Australia was 2-3 years ago, 2021 was an inflection point in Africa where the discussion in board rooms is now “how much” renewable energy should we deploy, not “if ”. Even in locations such as Senegal where the HFO price is quite low, renewable energy projects such as Eramet’s Grande Cote Operations site (solar PV and BESS) can obtain meaningful amounts of decarbonization while providing the lowest cost energy solution.

In South Africa there is also a very strong push for the ENERGY AND MINES MAGAZINE

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deployment of either on-site renewable energy or off-site wheeled renewable energy, which will help to sure up reliability of supply, reducing the current cost of electricity, and hedging against future price increases. As mentioned earlier, the demand is so great here that the availability of good sites is quickly becoming a constraint.

E&M: What should miners be aware of in terms of the different types of energy storage technologies available in the market and their role in energy and carbon savings?

PD: It is abundantly clear that energy storage is required in order for miners to meet the future decarbonization targets relating to electricity generation. A trend we are seeing is that longer-duration storage will become more prevalent as the cost of renewable energy decreases and the requirement for renewable energy capacity increases. There are a number of different storage technologies available to miners for these projects, with the selection being based on the scale of the project, price of electricity, and proximity to resources.

At this point, however, lithium-ion battery storage is the most suitable solution for the majority of applications, with alternative technologies such as sodium ion, vanadium flow, hydrogen, pumped hydro, and more recently gravity storage as alternatives for some sites.

E&M: What other technologies do you think will play a key role in decarbonizing mining?

PD: Further cost reductions and new low-cost storage technologies combined with higher fuel and grid electricity prices will continue to make an impact on the ability of mines to increase renewable energy penetration and reduce LCOE. Aside from electricity generation, the electrification of mobile plants is an important part of the decarbonization 16

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strategy for mines. We also see mine site integration and optimization of mining processes to access low-cost or unutilized renewable energy, which is the major reason why we have developed juwi HYBRID IQ. It is also worth touching on hydrogen technology, which gets a lot of attention. While in most cases there has been no clear economic benefit for hydrogen technology in projects that we have analyzed, the development of hydrogen production (electrolysis), transport, and usage is very dynamic and we expect H2 to become more relevant in the near future.

E&M: How does juwi benchmark its performance in supporting mining in renewable energy and decarbonization goals?

PD: We are a renewable energy solutions provider to the mining industry, and pride ourselves on assisting mining companies to achieve decarbonization goals while maintaining or even reducing cash operating costs. As part of this process, our key focus is to not negatively impact mine site operations/production and to maintain/improve the reliability of the electricity supply in operations.

Our 11 off-grid / mining projects in Australia and Africa include several global flagships such as DeGrussa, Sukari Gold, and now Northern Goldfields. This shows that our solutions add value to the mining community.

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CEO Interview:

Cobus Loots, CEO, Pan African Resources

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id-tier miner Pan African Resources is a South African gold producer with both surface and underground operations.

They have a stated commitment to reduce energy consumption and shift to renewable energy sources.

CEO Cobus Loots here explains their solar plans and response to their broader ESG initiatives.

“We intend to do our part and increase our renewable energy footprint.”

COBUS LOOTS CEO

PAN AFRICAN RESOURCES

Energy and Mines: How is the focus on climate change and ESG driving energy decisions for your operations?

Cobus Loots: Our operations are all located in South Africa, which has a legacy of sourcing its energy requirements from fossil/coal generated power plants operated by state utility Eskom. The energy mix has therefore relied predominantly on these (initially cheaply available) fossil fuels. We believe that increasing use of renewable energy by major consumers will ultimately reduce demand from fossil fuel power stations and the resultant positive impact on pollution levels will have a positive effect on climate change. We intend to do our part and increase our renewable energy footprint.

Pan African Resources’ energy strategy is to diversify its energy mix over time, and progress towards decarbonisation through the increased use of renewable energy options that will benefit both the environment, through significantly reduced GHG emissions, and our long-term business sustainability through cost efficiencies. Energy consumption accounts for ~30% of our total production costs and feasibility studies have demonstrated that power

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Stock Image

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“Pan African Resources’ energy strategy is to diversify its energy mix over time, and progress towards decarbonisation through the increased use of renewable energy options”

COBUS LOOTS CEO

PAN AFRICAN RESOURCES

generation through solar PV plants will reduce these costs significantly, while at the same time addressing production downtime as a result of power disruptions from the grid.

Renewable energy is part of the solution to provide both cost efficiencies to our business and life of mine models, while at the same time being environmentally friendly. Solar energy, even though not a total solution, will contribute to reducing Pan African’s carbon footprint and through more cost effective energy storage solutions technology being developed, will potentially provide full solutions in the near future.

Pan African’s first 10 MW solar plant at our Evander operations, to be commissioned in early 2022, is a start towards the transition to the Company’s low carbon footprint, with plans to scale the facility to 26 MW imminent, following the announcement by the South African government to allow private producers to build renewable energy plants of up to 100 MW. Likewise, a feasibility study for a 10 MW solar plant at our Barberton Mine operations is also nearing completion, with possible expansion also in the pipeline. We will be investigating storage solutions and alternative energy sources, such as gas, for furthering our transition towards a low carbon economy.

E&M: What more can be expected from Pan African in terms of renewable energy going forward?

CL: The solar power generation takes care of our daytime operational energy requirements to a large extent. Energy storage solutions will be the next step towards optimising the solar energy strategy, thereafter we will look at the feasibility of alternative energy sources, including natural gas.

E&M: What type of feedback have you received from key stakeholders on your decision to move ahead with solar?

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CL: Pan African is a progressive mining company committed to a “beyond compliance” approach with our ESG initiatives. Our key stakeholders expect the Company to reduce the negative impact of mining on the environment, at all levels. The solar plants are seen as a positive on our path to decarbonisation and reducing GHG emissions, with the added benefit of securing a stable power supply for our operations and cost savings in the medium to long term, which will improve shareholder returns through reduced production costs. Additionally, companies with higher ESG ratings could be expected to have improved shareholder returns over time.

Cobus Loots will be joining Shanta Gold CEO, Eric Zurrin, Centamin CEO, Martin Horgan, and Anglo American Group Head of Carbon Neutrality, Pierre Herben for the opening keynote panel session of the Energy and Mines Africa Virtual Summit, Feb 22, 9.40 AM SAST. ENERGY AND MINES MAGAZINE

“Solar plants are seen as a positive on our path to decarbonisation and reducing GHG emissions”

COBUS LOOTS CEO

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Is net-zero slowing progress on climate change? The answer might be yes.

A Using net-zero allows everyone off the hook and slows down the pressure to go zero carbon

BRUCE ANDERSON CEO

247SOLAR INC.

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BRUCE ANDERSON CEO 247SOLAR INC.

n entire vocabulary has evolved to describe the concepts and goals around reducing carbon emissions to save a warming planet.

Yet terms like renewable, net-zero, and zero carbon are not the same, and the differences are more than semantic. And, like many words, these terms are subject to different interpretations and can be used to obfuscate as well as to clarify.

For example, the term renewable came out of the environmental and sustainability movements of the mid-20th century, not today’s era of unchecked climate change. It is useless today. Sure, biofuels may be renewable because they come from plants, but they generally are made with dirty electricity, and when they burn, they produce emissions, including CO2. Biofuels are not a contributor to net-zero, let alone zero carbon.

Next comes a term that is perhaps even more insidious – net-zero. Net-zero has been in meaningful and public debate for some time, and it has become the default goal state for most efforts toward carbon reduction to mitigate climate change. But here’s the catch. Using net-zero allows everyone off the hook and slows down ENERGY AND MINES MAGAZINE

Microgrid for mining courtesy 247Solar

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The sole way a mine can have confidence that what they are doing is zero carbon is to make their own operations zero carbon.

BRUCE ANDERSON CEO

247SOLAR INC.

the pressure to go zero carbon, which is the only true way to impact climate change in a meaningful and permanent way.

NET-ZERO IS A DODGE There are several ways in which companies can claim net-zero (and associated energy credits) without actually doing anything that reduces carbon emissions into the atmosphere.

Companies can buy carbon-free electricity (CFE) but most, usually all, of the CFE they buy is from a PV operator during the day. The power these companies need at night is usually generated and delivered to them from a conventional power plant, or in the case of off-grid facilities, from dirty diesel gensets.

Companies can pay for carbon offsets, e.g., planting trees, and claim net-zero. But many such offsets have been shown to be bogus. The idea is they’re removing as much CO2 from the atmosphere as they’re putting into it but, best case, it’s a wash.

Most companies, when they claim net-zero, are producing CO2 on site and claim that they are doing something offsite to offset their emissions. Bottom line, net-zero means companies can use sleight-of-hand to claim they are doing something to aid the planet, when instead they are often engaged in a shell game,

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Photo courtesy 247Solar

merely moving emissions around. Or, in the words of Etihad Airways CEO Tony Douglas in a recent article in Bloomberg, “it’s cheating.”

ZERO CARBON IS THE GOAL Net-zero is comparative – something positive in one place compared to something negative somewhere else. Such comparisons are often tough to measure and easy to fudge. Zero carbon is absolute. It does not need to be measured or compared with anything else. Something is either zero-carbon or it isn’t.

CO2 is knowable. When sunshine strikes a PV cell, electricity happens. No CO2. When sunshine is reflected to create heat to produce power, electricity happens. No C02. When wind spins a turbine, electricity happens. No CO2.

The planet doesn’t care whether emissions come from your facility, or from your neighbor’s. The sole way a mine can have confidence that what they are doing is zero carbon is to make their own operations zero carbon. 247Solar Inc. envisions future generations with a sustainable world powered by abundant, low cost, zerocarbon energy. We’re grateful for any opportunity to help.

Bruce Anderson, CEO, 247Solar contact via https://247solar.com/ ENERGY AND MINES MAGAZINE

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