CASE STUDY THARISA PLC

Esg Criteria Factored Into All Investment Decisions

Tharisa is in a race to meet its goal to reduce its carbon emissions by 30% by 2030 and to be net carbon neutral by 2050. Its mechanised mine near Rustenburg produces platinum group metals (PGMs) and chrome concentrates. While its open-pit operation has a remaining life of 18 years, its planned underground mining operations will have a 40-year span and it is expected one day to be the last mine operating in the area.

This, among other business imperatives, has driven the company to develop a solid ESG strategy with a detailed plan to meet its goals and go guide it towards achieving the impact it desires.

Case Study

Tharisa plc is an integrated resources mining group based in Cyprus. Its principal asset is the long-life open-pit Tharisa Mine, which produces both platinum group metals (PGM) and chrome concentrates near Rustenburg in the North West province of South Africa. Tharisa also owns Karo Mining Holdings, a low-cost, open-pit PGM asset under construction and located on the Great Dyke in Zimbabwe.

Its ESG target is to reduce its carbon emissions to 30% by 2030 and to be net carbon neutral by 2050. To achieve this, it has a comprehensive ESG strategy that has the full support of the board. Plans are at an advanced stage for Tharisa’s mines to establish solar power plants (to be built by a third party with a power-purchase agreement with Tharisa) so that Tharisa will be self-sufficient and even send power to the national grid.

Among its ESG goals is a plan to reduce air, sound and water pollution at its operations. Tharisa already recycles 85% of water and uses non-municipal water at the mines, including borehole and dam water, and also provides water to the community where municipal supply is lacking. It also seeks to foster a harmonious relationship with mine host communities.

SDGs TARGETED BY THE FUND

SDG 6: Clean water and sanitation.

SDG 12: Responsible consumption and production.

SDG 13: Climate action.

SDG 15: Life on land.

Rising temperature levels will have an adverse effect on the availability of natural elements required by the mine, such as access to water and also on the physical wellbeing of the workforce. It needs to regulate greenhouse gas emissions and the responsible use of energy and use water responsibly. Hence it is imperative that the group plans ahead to mitigate against these factors, ensuring that it invests upfront in conducting all mining and processing operations in an environmentally responsible manner.

Estimated Measurable Outcomes Of The Projects

Tharisa has set out what it needs to do in its comprehensive ESG strategy in the short, medium and long term. These activities include the construction of new water storage facilities to cater to projected water shortages and the replacement of diesel fuel as an energy source. It requires relevant skills to manage ESG effectively at economical rates to implement these.

Ongoing training programmes will assist the group to develop the skills it requires locally, within the host communities, strengthen relations and influence behaviour. The skills development investment will improve the group’s relations with host communities and uplift them socially and economically.

Community engagements through SLP and local forums.

Risks To Outcomes From The Projects

Tharisa plc is exposed to risks arising from climate change on operations. It is at a risk of reputational damage from perceptions that it harms the environment by virtue of being a mining company and is not contributing sufficiently and timely in addressing climate risk. Potential legal risks that could lead to sanctions such as class action suits, which could result in halting mining production and even the loss of its mining licence. Increased costs of remediation and rehabilitation due to legislative changes are among the risks. Relations with mining host communities are a critical risk as a collapse of this relationship could bring all activities to a halt. Noncompliance to ESG standards and requirements may affect capital raising, and affect its growth and acquisitions. Negative media coverage and stakeholders’ perceptions, including different sections of the community and various levels of government, can influence perception and result in it losing support in equity markets and amongst other key stakeholders.

Opportunities For Exposure

Access to capital will assist Tharisa plc to decarbonise its operations and supply chains timeously and achieve its goals. This can be accessed in the form of equity listed on the JSE and LSE, and Karo bonds listed on the VFEX. An association with an organisation that prioritises its ESG will also assist in improving the carbon footprints of its investors.

The host communities’ social and economic advancement is informed by the local municipality’s integrated development plan and translated into action through local initiatives incorporated into each mine’s social and labour planˮ

Dr Carol Bell, Chairperson Climate Change and Sustainability Committee

BY AURELIA