Exxaro says decarbonisation journey is imperative for growth

21st May 2021

By: Marleny Arnoldi

Deputy Editor Online

     

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Although it is predominantly a coal producer, diversified miner Exxaro Resources says it supports the work of the Presidential Climate Change Coordinating Commission to reduce the country’s emissions in the context of overcoming poverty and inequality.

“Climate change is one of the most pressing issues of our age; how we choose to address it today will have a lasting impact on businesses, the environment, future generations and society.

“Developing countries such as South Africa are particularly vulnerable to the global phenomenon, often suffering the most from the devastating impact of climate change through droughts, storms, floods and rising sea levels.

“Yet, these regions have historically contributed the least to global emissions,” says Exxaro CEO Mxolisi Mgojo.

He believes it is promising to see global climate action intensifying, with the US planning to reduce its emissions by 50% to 52% by 2030 and more countries committing to join the clean energy revolution.

Exxaro says the local mining sector has a pivotal role to play in the country’s transition to a low-carbon economy.

“As such, we are ramping up our organisation-wide efforts to achieve carbon neutrality by 2050. We plan to minimise risks and maximise clean-energy opportunities to reach this crucial milestone.

“In doing so, we also hope to pave the way for others in our industry to follow suit,” Mgojo confirms.

Exxaro, more than a decade ago, already realised the necessity of a clean energy transition when climate change considerations were on the rise and coal exports to Europe – a former significant coal customer – started declining, the company points out.

“The German government started discussing the idea of moving away from coal as far back as 2003, and we realised a renewable-energy revolution was about to emerge,” notes Mgojo.

In discussing Exxaro’s journey to cleaner operations, he says the company entered the renewable energy market in 2010 by establishing a 50:50 joint venture with Tata Power, called Cennergi.

Today, Cennergi is wholly owned by Exxaro and it operates two wind farms in the Eastern Cape, which feed 239 MW into the national grid.

Exxaro was one of the first fossil fuels companies to become a renewable energy solutions provider, the company points out.

The company continued to align its governance, risk management and strategic processes with that of the Task Force on Climate-related Financial Disclosures in 2019 and set itself goals such as reprioritising its coal reserves to minimise stranded assets, selling noncore coal operations and avoiding further investments in new thermal coal mine developments.

“We recognise that transforming our business in response to new energy needs opens a unique opportunity to build a resilient and sustainable future for our people and the communities around us.

“This transition is critical, especially for the communities dependent on our business to provide jobs and other opportunities. Therefore, our most poignant question right now is, how do we effectively transition on the ground without leaving our communities behind?

“Our journey goes far beyond merely moving from coal to renewables – we also need to ensure that we become a catalyst for new economic activity across our host communities,” Mgojo states.

He adds that Exxaro does not yet know the future of coal, but while the company continues producing it for the time being, it will ensure that it does not contribute to environmental damage.

Exxaro is in the process of de-carbonising its mines, with Grootgeluk being first up with a planned 84 MW solar photovoltaic power plant, which will save at least 12% on electricity costs and reduce the mine’s carbon footprint by at least 30%, and the overall group carbon footprint by 15%.

Mgojo believes that, ultimately, dealing with climate change is about driving impactful investments and creating new energy opportunities for communities in terms of clean renewables.

“We can’t do this on our own – ongoing partnerships with government, business, labour and civil society are critical.

“South African mining companies can continue their catalytic role in the economy towards a low carbon future. We hope others will join us to power better lives and lay the foundations for a more sustainable and equitable South Africa.”

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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