The world is undergoing one of the most profound periods of environmental change in the history of humanity, and mining companies cannot risk denying climate change or failing to undertake actions to help mitigate it, metals miner Sibanye-Stillwater CEO Neal Froneman said during a keynote address at Joburg Indaba on October 4.

He implored mining companies to continue innovating to sustain relevance and continued delivery for all stakeholders, particularly in light of global trends that were shaping society.

The mining industry was key to a sustainable future and growing global economy, owing to the need for critical metals, Froneman stated, adding that this created the imperative for mining companies to repair legacy perceptions and embrace stakeholder expectations.

Sibanye, for one, has constantly evolved its strategy and developed responses to build a resilient business that is prepared to use major disruptions as opportunities for value creation.

“While we have experienced negative consequences, including operational disruptions owing to weather events, it is evident that the increasing social discontent owing to factors of inequality and poverty are also real issues,” Froneman continued.

Climate change is now broadly accepted as the single-greatest existential threat to the future of humanity, with decarbonisation in the global economy aimed at reducing damaging environmental impacts – which is influencing the type of metals and minerals that are produced, as well as the manner in which these are produced.

If left unchecked, climate change could create $178-trillion in global economic losses between 2021 and 2070, with 800-million people of the global workforce being left vulnerable.

In contrast, Froneman explained, climate mitigation efforts could create jobs and boost the world economy by more than $200-trillion.

Regulatory authorities across the world are creating drivers of clean energy and the actions of China, Europe and the US will have an undoubtable impact on demand patterns.

“Some of the commercial rationale [the industry] has been used to will fall by the wayside,” Froneman pointed out, adding that the global clean energy economy would make previous industrial revolutions look “pedestrian”.

He cited think tank Breakthrough Energy in stating that how the world generates electricity, how it mines, how people travel and how people work, live and play will all change, requiring new technologies and associated new minerals and metals.

For example, assuming a net-zero scenario by 2050, the International Energy Agency estimates a five-fold increase in lithium demand by 2030, with demand to increase by 900% by 2050, compared with 2021.

Froneman said that what the world was seeing was a transition from a predominance of bulk metals to critical metals in smaller amounts, creating a very volatile environment.

He said the development of secondary supply would become increasingly important to meet appetite for these metals. “I can see a time when primary mining will be ancillary to secondary supply, producing just enough to top up metals that are already in circulation.

“The US, for example, has a large recycling base for metals that Sibanye produces.”

While many of these changes are still some way off, how mining companies and regulatory authorities respond to decisions made now will define the future of the industry, Froneman highlighted.

Mining has become increasingly focused on producing metals without the harmful effects traditionally associated with mining and ensuring stakeholder benefits along the way.

Although the products of mining are essential components of human lives, it is seldom recognised as such, with mining often still being considered in a negative light. “We have a unique opportunity to reposition mining in the world in its rightful place as long as we do the right things,” Froneman said.

For example, half of the world’s gross domestic product (GDP), about $44-trillion, is dependent on primary industries such as mining and agriculture, however, without this half, the other half of global GDP cannot exist.

Froneman added that stakeholders globally were starting to recognise that mining, if conducted responsibly, could serve as a powerful catalyst of development and positive impact.

“As miners, we have to go much further to secure recognition as a force for good. Our strategic pivot requires foresight and resolve, because analysts find it hard to see the future, since its very conceptual. It requires a real commitment to continue this journey and realise future value,” he pointed out.

One cannot ignore the multipolarity that is shaping the world – the tug of war between the east and the west – Froneman stated, explaining that governments were hell-bent on being independent in terms of supply from the rest of the world, which would require some considerable thought and strategy.

“Our responsibility has never been greater in supporting progress and innovation,” Froneman concluded.

COAL VIEW

Speaking on a panel questioning whether mining was living up to its societal and environmental obligations, coal miner Thungela Resources CEO and World Coal Association chairperson July Ndlovu said that minerals belonged to the people on the ground, hence the mining industry’s obligation to leave behind a positive legacy for future generations, while making positive economic contributions in every nation operated in.

“If that is the premise upon which mining companies are given their licence to operate, whether legal or social is not the issue, society has real expectations of us beyond taxes, royalties and creating jobs. It goes to the heart of ensuring that, when you have finished your mining activities, what you leave behind is a sustainable endowment for that area,” Ndlovu explained.  

He said the mining industry in South Africa had come a long way in the last decade, some of which had been a result of pressure from civil society, but also it had become a significant shareholder issue.

“Lately you would struggle to find a cluster that is not related to environmental issues. Stakeholders are increasingly understanding how value can be destroyed through environmental damage,” Ndlovu added.

Speaking from a coal perspective, he said since everyone had written an obituary for coal, it was no longer enough to continue mining coal simply because it was in abundance, rather, this industry had to show in compelling ways how it could ensure positive impact, particularly on the social side of environment, social and governance (ESG).

Since coal is coming to an inevitable end, it was important that mining companies created new, lasting livelihoods for people in coal mining regions. What people often neglect to acknowledge, Ndlovu added, was how coal miners had helped to provide clean water in regions where it operated, as well as other positive socioeconomic elements.

“For coal miners to remain relevant, we have to position ourselves as responsible owners of assets. We can not afford to leave a problem for the State or society,” Ndlovu emphasised.

NEW TECHNOLOGY

African Rainbow Minerals (ARM) CEO Phillip Tobias said ESG and clean energy transition was no longer an add-on to any business, or an afterthought, but rather a business imperative.

There are some low-hanging fruit opportunities that mining companies are pursuing, including the use of modernised equipment. ARM, for one, recently acquired six 42 t battery energy vehicles for its mining fleet, which it believes to be an investment in safer and cleaner operations.

He questioned why South Africa was not among the top hydrogen leaders in the world – Australia, Namibia and Chile – if it had all the right resources for it. “We have all the inputs but not the leadership. South Africa is a sleeping giant as far as hydrogen generation is concerned. We need to reflect, reposition and get going.

“At the moment, hydrogen is still a research and development conversation. There will need to be some courageous decision-making to become a global leader in hydrogen production,” Tobias concluded.