JOHANNESBURG (miningweekly.com) – The surge of the hydrogen economy, the need to recycle, halving Scope 3 emissions through iron-ore-linked green steelmaking, assisting South Africa to create new industries, and becoming a one-stop material solutions provider, were among the issues discussed by Anglo American CEO Mark Cutifani in a wide-ranging interview.
Speaking to Mining Weekly on Zoom, Cutifani expressed appreciation for the leadership and support that Anglo receives from the South Africa government. He described Anglo as being a strong advocate and supporter of South Africa “in every sense of the word", and said the backing received for the group's solar-linked hydrogen project in Limpopo has been “very, very good”. (Also watch attached Creamer Media video.)
Cutifani drew attention to:
- the importance of South Africa’s global leadership position in platinum group metals (PGMs) beneficiation, at a time when the world spotlight is on the catalysis role of PGMs in global decarbonisation;
- this being achieved against the background of hydrogen possibly fuelling almost 20% of the world’s energy by 2050, which would make South Africa one of the centres of the hydrogen industry on the basis of its PGMs at this stage being the best known catalysers for creating hydrogen and for turning hydrogen into water, which is basically what happens when hydrogen is used to fuel vehicles;
- the opportunity for Anglo to work with the South African government to create a coherent world-leading regulatory environment for green hydrogen, decarbonisation and climate-change mitigation, in the absence of any jurisdiction currently striking him as the coherent leader in this space, where there are industrial development and other commercial opportunities;
- the potential for green hydrogen to halve Anglo’s own Scope 3 emissions in downstream steelmaking, owing to about 45% of the company’s Scope 3 emissions being iron-ore linked, and the high quality of its iron-ore being very attractive to green steelmakers;
- the promise made to Mineral Resources and Energy Minister Gwede Mantashe that he will be the first person to sit in the driver’s seat of the world’s biggest hydrogen fuel cell truck, which the company hopes to have on the ground in Limpopo this year;
- the company retaining its technical innovation base in South Africa, where it can help to bring about new industries that could lower South African high level of unemployment;
- Anglo Platinum having 50% of the world’s non-Russian PGMs processing capacity, and the company being the PGM industry’s most significant beneficiator in that it takes material all the way to saleable products in five key steps, with the technologies applied all home-grown South African technologies;
- the need for Anglo to become a lot better in the recycling of all of its products as it plays a role in the circular economy; and
- the company’s grand vision of being a one-stop material solutions provider to the global market, where demand strength has become significantly apparent.
Mining Weekly: I’ve never before experienced such a flurry of trumpets around any sector of the economy like is happening now with the reception being given to the hydrogen economy. I was listening to the former UK Prime Minister David Cameron come over TV saying he’s going into renewable energy for fragile economies, many of them African. Then, I read about Malcolm Turnbull, another former Prime Minister, swinging into green hydrogen. It seems as through hydrogen could be pervasive, and Anglo was one of the first to join the Hydrogen Council and you got us into thinking about hydrogen, and now suddenly, hydrogen’s just burst across the universe as a potential universal energy carrier. Where do you think it’s all going to lead?
Well, you’ve got a good memory. In 2013, we started talking hydrogen on the basis of, if you understand hydrogen molecules’ efficiency in terms of energy, it’s probably the most efficient fuel that we know of, and the good news is you need PGMs, in particular platinum, to catalyse and turn water into hydrogen, or whatever process you may have. So, yes, I was talking my own book, but the more homework I did, the more logical it seemed. Hydrogen’s been around for a long time but now we’re starting to see, with the new technologies, we're able to harness that potential and, with the need to decarbonise, people are now understanding how they can use hydrogen, and they’re looking at renewables as the primary energy source, which is what we’re thinking about. You then create hydrogen using wind power or solar power, so there’s no carbon footprint in creating the hydrogen. Then, we can use the hydrogen to replace the diesel in a truck, and now we’ve got a carbonless energy footprint that’s quite unique. So, that really fired my imagination back on 2013, 2014, when I was trying to understand what platinum was. It’s been a great journey. We’re absolutely thrilled and excited to see that it’s starting to take off. It could go anywhere, and literally hydrogen could be fuelling almost 20% of the world’s energy by 2050 and, if that were to be the case, then South Africa would be one of the centres of the hydrogen industry on the basis that PGMs are, at this stage, the best known catalysers for creating hydrogen, and for turning hydrogen into water, which is basically what happens when we’re driving a truck.
You did another great thing by setting up, in Limpopo, the foundation for the biggest hydrogen fuel cell mining truck in the world, a 300 tonner, and that has really been great for South Africa in that it has created so many headlines around the world. How is that doing?
Very well, and I’ve got to give credit to Tony O’Neill (Anglo group director technical and sustainability), Donovan Waller (Anglo group head of technology development), and Chris Griffith (former Anglo American Platinum CEO) when he was in platinum. They were the catalysts to bring all that thinking together. Norman Mbazima, as the chairperson of Anglo Platinum, and current CEO Natascha Viljoen are driving it as hard as they can. We’re trying to get a truck on the ground and so by, I think, July we’ll be constructing the truck, near Mogalakwena (Anglo Platinum’s PGMs mine in Limpopo). We have made the Minister a promise that he’ll be the first to sit in the driver’s seat. These are exciting times and a really important message here is that we’ve retained technical innovation base in South Africa and for us to be a catalyst to bringing these things together and using South Africa as a base, is absolutely thrilling. If we can help make that another industry for South Africa then that will be a great win for everybody, and I’ve got to say that the government’s been very supportive, the President (Cyril Ramaphosa) and all the way through his Cabinet. The Finance Minister (Tito Mboweni) has been doing a great job under very tough circumstances. We’ve had a great lot of people supporting us and it really is a privilege and a pleasure to be working with our South African colleagues.
People used to say to me that when they came to South Africa to invest in mining, the red tape was rolled out, and that when they went to mining jurisdictions in South America, the red carpet was rolled out. Is there a little more red carpet that you’re noticing in South Africa?
Being an Aussie, I’ve never really had red carpet treatment in South Africa. But what I will say, is that we’ve always had a lot of friendly banter and arguments about whose got the best rugby team and whose got the best cricket team. From our point of view, the one thing we always know we’ll have in South Africa are honest conversations. We are always working around how to best do the job and how we can do it together, and I’ve got to give great credit to the Minister, who has really worked hard to be a partner and to help support us. At the same time, we don’t always agree on everything. He’s trying to do the best thing for South Africa, which we appreciate, but certainly the leadership and the support we get, we really do appreciate, and while I still wouldn't say it’s red carpet, we certainly get the support and help we need and, in talking about the solar array, the renewable source, the sun, the idea of the hydrogen strategy, being able to use that energy inside our operations, the Minister has been fantastically supportive, Eskom, all the associated Ministries, the President and local communities have all been very, very good. Now, we’ve got to do a lot better with our local communities but, to be fair, we’ve generally had pretty good support, and we are strong advocates and supporters of South Africa, in every sense of the word.
Mining Weekly always likes to look at the mines themselves as to how they are also using the technologies that they are giving metals to, and that other people are using to clean the planet - how the mines are themselves putting into practice what green metals preach. I read about the nickel miner in Australia who's changing his whole fleet to a fleet of electric vehicles that make use of the nickel that he mines. How extensively are your green metals preaching to you and how are you are getting greener in your own organisation?
Firstly, we’re continuing to grow our copper business, our nickel business. We’ve bought into crop nutrients with this polyhalite fertiliser that we hope we can sell into South Africa to help our farmers. We have diamonds for those that you love. We’ve got a whole range of products that are looking pretty strong in today’s market. We’re a great user and adopter of technology, so the spinoffs and the benefits of that in South Africa are that we can potentially help bring new industries, and a lot of people forget that beneficiation is core to who we are, particularly in the platinum business. Today, Anglo Platinum actually has 50% of the world’s non-Russian processing capacity in the PGMs space. We take material right to metal. We actually beneficiate through five key steps to get into saleable product in metal form, and that is beneficiation in every sense of the word. We’re the most significant beneficiator in the platinum industry, and the technologies that have been applied and developed in that business, to make it as efficient as it is today, are all South African home-grown technologies, something to be very proud of. The products, the technologies we’re applying, the new digital technologies, are all being worked on to try and improve our operations to make sure that we’ve got another 100 years of life in those operations for all South Africans.
You operate in quite a number of mining jurisdictions. Where are you finding that they are taking the whole climate change mitigation need most seriously and perhaps South Africa could follow some guidelines on how to create a regulatory environment to mitigate against climate change?
That’s a fairly good question. There’s no one jurisdiction that strikes me as the leader in this space. You’ve got a lot of bureaucratic institutions debating and arguing but not a lot of action on the ground. To be fair, in the UK, Prince Charles is actually one of the leaders in the conversation and he’s delightful, and he’s committed and he’s bringing lots of people together. In the UK, they’ve done some very good work on replacing some of their old coal technology plants, but again in getting a coherent strategy, we haven’t seen much globally and maybe there’s an opportunity in South Africa to work with the government on building a coherent decarbonisation strategy, or energy strategy, that supports industrial development and other commercial opportunities. One of the things that I have talked about to James Motlatsi (the South Africa Mining Hall of Fame inductee, former National Union of Mineworkers president, former deputy chairperson of AngloGold Ashanti and current TEBA chairperson) is the availability of land and the reason the land conversations don't worry us as a company is we know that the land issues have to be addressed and the government’s trying to do that in a constructive way and sometimes you don’t always get that right but the bigger issue is development. So, what do we do to put infrastructure in place that allows people to develop the land to create value, whether that’s agriculture or whether that’s other commercial activities, we’ve got to look at how we play our part in helping to develop industry in South Africa so that we can get 30% unemployment down to literally zero, and we’ve got a long pathway to go but we need investment, we need companies like ours, we need to make South Africa an attractive investment destination. That I do know the government’s dedicated to doing and they continue to make policy and changes but we’ve got to play our part and we’re very keen to do that.
And I just wanted to have a word on the circular economy. Where I’m sitting here now, down the road is Scaw Metals. That used to be an Anglo American company that processed ferrous scrap. Now the world is talking about circular economics again, what is Anglo American’s view on the circular economy, how is Anglo planning to recycle and become part of the circular economy?
At my age, what is old is new again, and in the circular economy I think there’s no doubt that as we see global growth and global middle-class demand for all sorts of products, the ability of our industry to deliver materials is going to get tougher, and supply is short, so we have to get a lot better in recycling all of our products, and people say, wait a minute, you're talking against the industry, and I’m saying, no, if we want to lift the world in terms of standard of living, and lift people out of poverty, we’ve really got to understand how we help share what we have and make sure everybody can have a better world and a better life, and that means we're going to have to learn how to mine better, mine more efficiently, and to recycle. As a company, we’ve gone from talking about being a mining company that digs holes, to being a metals and minerals company that understands the needs of its customers, and when delivering products all the way along the value chain, ultimately to being a materials solution provider that understands that we’ve got customers who need products and what they’re looking to us for is to mine it, because it may have certain characteristics that the primary product is only able to deliver, and to recycle and provide access to recycled products to our customers; so we’re a one-stop shop, and I think that’s what the material solution company of the future looks like and certainly, as Anglo American, we’re well on that path. It’s a long journey but with companies like De Beers in luxury goods, all along through our PGMs business, and ultimately even our iron-ore business, I think we’re going to have to think very differently about how we operate in the future and how we create new profit pools that deliver value for our shareholders and all of our stakeholders. I think it’s really important but we won't lose sight of what we are, we’re a company that understands mineral resources, we get the best out of those mineral resources, we’ve delivered a 16% return year-on-year over the last seven years. We've led the majors in terms of performance improvement and we're going to lead them for the next seven years and beyond.
Just when you mentioned iron-ore, again this green hydrogen sprung into my mind. Is that something that could be combined with iron-ore? You produce the iron-ore, could you process it into something with a higher value using green hydrogen?
Sure, and from our point of view, those sorts of things are things we need to be looking at. The ability to source energy from solar or wind turbines, that’s a renewable source, that's clean energy, the ability to maybe use recycled steel or create steel from hydrogen and iron-ore, is a real opportunity for us as an industry, and certainly it would help our Scope 3 emissions, because about 45%, and these are rough numbers, of our Scope 3 emissions are from iron-ore, that is, making steel in downstream. The industry tells us that by 2040, 50% of the world’s steel will come from green processes, including hydrogen. Now, our Kumba iron-ore and our Minas Rio iron-ore from Brazil is very high quality, and will be preferentially fed to those green processes. That’s a big advantage we have potentially in the future, and that will halve our Scope 3 emissions just for iron-ore. So, there’s some real opportunities both in terms of economic benefit, environmental benefit and also getting credit for helping reduce the carbon footprint. All of these things we think about as a company, and we think about in terms of the jurisdiction we're operating in, and how we might be able to make a contribution.