ARE SA MINES READY FOR DECARBONISATION?

Are South African mines prepared to reduce Scope 3 emissions? PwC’s newly released report seeks to address this critical question.

Carbon emissions are primarily caused by hazardous explosives and blasting devices used in mines. Until our mines implement environmentally friendly methods, we will have virtually no chance of reducing our carbon footprint and decarbonising.

Several months ago, PwC released a mining report that painted a picture of what our country's mining industry could look like in the future. In a report entitled "SA Mine 2022, Level up or Reset", the report examines the financial results of the mining sector and other factors, such as the economic context and infrastructure challenges the mining sector faces.

Let's first examine how mines performed financially:

How did South African mines fare financially?

Overall, our mines have performed well from a financial standpoint. The PwC report notes that South African mines performed better than expected in most areas.

"Distributions to shareholders more than doubled to R190bn, Capital expenditure grew by 36%, and taxes paid increased by 14% as South African mining companies maintained profitability at last year's high levels. Growing demand for commodities in the sector saw record rand prices for the platinum group metals basket, iron ore, and coal, while most other South African commodity prices remained at relatively high rand levels," says the report.

So what exactly is decarbonisation?

Decarbonisation refers to reducing the amount of carbon dioxide (CO2) released into the atmosphere. The primary objective of decarbonisation is to reduce mining emissions.

The world as we know it faces the challenge of achieving a global rate of decarbonisation of 15.2% per annum to reduce global warming. As a result, South Africa and the world should strive to achieve global warming of 1.5°C.

• According to PwC's report, South Africa should prioritise decarbonisation since protecting the environment negatively impacts climate change.

• The report emphasizes the importance of a holistic approach to environmental crises and social upheaval. This includes educating the public about the impacts our environment can have on our economy.

Transitioning from coal gasification and steam methane processes to one powered by green hydrogen will significantly reduce the mine's carbon footprint.

Is a greener mining sector possible?

Among the major sectors of our economy, mining is the only one that is unsustainable. As a result, it depletes finite resources and pollutes and destroys the natural environment. Despite its relatively small contribution to global CO2 emissions, mining is a major contributor to South Africa's CO2 emissions.

A total of 81.4% of the country's electricity was generated from coal in 2021, of which the mining industry used 60%. That leaves us as a country grappling with two issues of decarbonising: sustainable and reliable power supply. According to PwC, addressing these dual challenges will require the mining sector to invest in alternative and renewable energy sources and planning.

"The global energy transition won't be smooth, as was reflected in the record coal prices experienced for the year. This report recommends that South Africa, as a coal exporter, maximize the value of its coal by supporting global energy supply stability.

In recent years, new mining technologies and regulations have significantly improved mining efficiency and reduced environmental impact. The more efficient mining techniques are, the less waste they produce, which makes them much more environmentally friendly. The availability of renewable energy will have a profound impact on how we operate modern mines and reduce emissions.

Light at the end of the tunnel

South Africa's light at the end of the tunnel is "Operation Vulindlela," a joint initiative by the presidency and National Treasury. The report also notes other strides that have been made in transforming the mining industry.

"South Africa has committed to decarbonising its economy in line with the United Nations (UN) Framework Convention on Climate Change and the Paris Agreement. The Minerals Council of South Africa has further endorsed this commitment, with the mining sector to set a target of achieving Net Zero (NZ) by 2050," says the report.

What are the transitions SA mines undergo?

A structured approach would be the most effective way for South African mines to transition from fossil fuel-based electricity to clean, sustainable energy from wind and solar. According to PwC, the process will begin with a baseline assessment of the organisation's energy mix, electricity demand, and emissions levels.

The report also recommends the following:

• Mines can reduce electricity and energy consumption by evaluating and optimizing their processes.

• Diversify its energy supply with the introduction of renewable power generation.

Conclusion

Cabinet approved a just transition framework in September 2022. The plan outlines a pathway for climate-resilient development in South Africa, involving every sector, focusing on improving lives. In the mining context, this can only be accomplished through adopting environmentally friendly practices by the mine.

However, when implemented properly, environmentally friendly mining will be a critical component of sustainable development. Our mines can achieve this goal by using cleaner technologies to reduce pollutants and minimize water and energy usage.