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South Africa’s major iron-ore producer and marketer Kumba Iron Ore is fast-tracking solar power permitting and looking to wind energy, it is discussing the use of green hydrogen with particularly European customers, and it foresees relatively strong iron-ore prices continuing in the short term as well as good premium prospects for its lump ore, which makes up two-thirds of Kumba production.

On the company’s renewable energy generation plans, new Kumba CEO Mpumi Zikalala said in response to Mining Weekly during a media briefing: “We’re currently busy with the permitting phase of our 60 MW to 80 MW plant.

“We also form part of the broader Anglo American renewable energy strategy, which will look at a more holistic approach that will also include wind power generation within the renewables space.

“With our initial phase of the 60 MW to 80 MW power, we are investigating whether we will require storage. That’s work in progress but certainly we are fast-tracking the work around permitting and will come back with more information within the overall ambit of Anglo American,” said Zikalala.

On prospects for the involvement of renewable energy-linked green hydrogen, Zikalala drew attention to the reference of President Cyril Ramaphosa in this month’s State of the Nation Address to green hydrogen and the Northern Cape province, where Kumba is based.

“The president spoke about green hydrogen from a Northern Cape province perspective, and we will be watching that space very closely.

“Certainly, when it comes to our customers and their plans, they are looking at utilising green hydrogen as they work through their strategy from a Scope 3 emissions perspective,” said Zikalala.

Expanding on green hydrogen and liaison with customers, Kumba marketing and seaborne logistics executive head Timo Smit revealed that Kumba is working with its customers, particularly in Europe, to see what mix would be ideal for them to feed into directly reduced iron (DRI) steelmaking, which is linked to the use of green hydrogen. DRI is produced by direct reduction of iron-ore using carbon monoxide and hydrogen.

On customer requirements, Smit said in response to Mining Weekly: “Most of them are pretty far advanced.”

He spoke of Salzgitter, which is one of the largest steel producers in Europe with an annual output of seven-million tonnes, planning to convert its steelmaking over time from blast furnace steelmaking to DRI, based on green hydrogen.

“We’re part of those investigations and looking into what is required for our ore to be feedstock in DRI steelmaking,” added Smit.

CENTRALISED IRON-ORE PURCHASING PLATFORM

On China seeking to centralise the way in which iron-ore is priced, Smit said there had been a number of steps in the past week by the Chinese National Development and Reform Commission (NDRC) to try and limit speculation in iron-ore and price volatility.

Last week the NDRC met with international traders on iron-ore trading activity and stock levels in ports in China. That was followed up by another meeting with Chinese steel mills and traders in a bid to limit price volatility.

Another meeting took place this week with port authorities investigating what can be done to limit inventory levels at ports.

The latest news to come through is that the NDRC is investigating a centralised purchasing platform in an attempt to reduce volatility.

“I think the impact is going to be relatively small. It would impact volatility but I don’t think it’s going to impact average price levels, which should be reflective of fundamental supply and demand. We might see an impact in volatility, which frankly wouldn’t be bad but on the overall average price levels I think the impact is going to be quite limited.

“These developments are very, very fresh. It’s a moving space, so we will see what else is done in the weeks ahead. What we have seen so far is that whenever an announcement was made and a step was taken by the NDRC, the very next day the market would react quite strong...

South Africa’s largest iron-ore producer and marketer, Kumba Iron Ore, has shared R89-billion of the value it created in 2021 with its stakeholders, with R21-billion-plus going to the government in tax revenues and mineral royalties.

The Johannesburg-listed Anglo American group company increased capital investment by 30% to R8-billion, “and this not only benefits the life of our operations, but represents our commitment to investing in our country and local communities”, new Kumba CEO Mpumi Zikalala pointed out at the company’s presentation of spectacular financial results.

The strong financial performance delivered R43.5-billion rand to shareholders, with its empowerment partners receiving more than R10-billion rand in dividends.

“Safeguarding local livelihoods is extremely important,” said Zikalala in pointing out that the company paid R5.6-billion rand in salaries and benefits.

Seventy-nine per cent of Kumba staff are employed from local communities in the Northern Cape.

“We also supported BEE suppliers with R10-billion rand of spend,” Zikalala said at the presentation covered by Mining Weekly.

Four-billion rand of that related to host community suppliers. One such initiative is the awarding of the R1.6-billion rand mining contract to a community-based joint venture to mine iron-ore at Kumba’s Kolomela mine. This joint venture supports communities and women-owned businesses.

“These and similar opportunities will go a long way towards helping our communities thrive,” said Zikalala.

The company further contributed R258-million towards direct social community-building investments, including R36-million in Covid-19 support.

RAIL INFRASTRUCTURE UPLIFTMENT

The 39.3-million tonnes of iron-ore railed to the Port of Saldanha was 1.2-million up on 2020, with export sales at 40.2-million tonnes.

Higher production impacted by rail constraints resulted in a higher stock level of 6.1-million tonnes, mostly at the mines.

Debottlenecking logistics remains high on the list of priorities. To address the rail infrastructure and equipment maintenance challenges, engagements with State-owned rail enterprise Transnet and industry peers have been stepped up.

Following these engagements, equipment reliability and shipping throughput has improved. This contributed to export sales improving by 6% in the second half.

In the short term, further uplift is expected from the improvement of the rail infrastructure which will help lift speed restrictions.

In addition, the three-year equipment refurbishment programme at Saldana port is expected to be completed this year.

A systematic shift to larger Cape-size vessels is under way to increase shipping capacity.

Although the iron-ore line is not yet back to pre-pandemic levels, some progress has been seen but with room for improvement.

In the medium term, a performance uplift is expected from the commissioning of the third tippler at the port and shorter periods of shutdown maintenance.

RECORD EARNINGS

Kumba delivered record 2021 earnings of R64.6-billion, and accumulated 47% more attributable free cash totalling R30.5-billion.

The average realised export price of $161/t, 18% above benchmark, helped the company to achieve a 63% earnings margin. Return on capital employed rose to 147%.

The final divided of R30.50 a share brought the total dividend to R103.20 a share. Combined with the interim cash dividend of R72.70 a share, the total cash dividend for the year increased by 69% to R103.20 a share, representing a payout ratio of 100% of headline earnings.

More than five years of fatality-free production and more than 75% of its workforce has been vaccinated to date, offering vital protection against Covid-19.

Cost savings of R0.9-billion in 2021 took savings since 2018 to R4.1-billion.

Despite weather and logistical challenges, production increased by 9% to 40.9-million tonnes, with improved performance at the Saldanha port lifting export sales by 1% to 40.2-million tonnes.

In 2021, Sishen’s life-of-mine was...

Platinum group metals (PGMs) miner Anglo American Platinum (Amplats) more than doubled its earnings before interest, taxes, depreciation and amortisation (Ebitda) to R108-billion for 2021, compared with Ebitda of R41-billion in 2020.

CEO Natascha Viljoen attributed the record Ebitda to a solid performance from the company’s own-managed operations, as well as from all processing assets, and robust underlying fundamentals for PGMs.

Amplats achieved a record PGMs basket price of R44 511/oz, or $2 761/oz, for 2021, up 22% from 2020’s average basket price of R33 320/oz, or $2 035/oz.

Individually, all PGMs had higher average prices in 2021 than in 2020. The average dollar price for platinum over the year was $1 086/oz, 23% higher than in 2020, and its highest since 2014.

Palladium prices hit a record high of $2 981/oz in May last year, and averaged more than $2 300/oz for most of the year, 9% higher than in 2020.

Rhodium again broke records in 2021, recording an all-time high of $30 000/oz in March, and averaging $20 109/oz over the full-year, 79% higher than in 2020.

Amplats’ headline earnings totalled R79-billion, which was a 160% increase compared with the R30-billion in headline earnings posted in 2020.

Viljoen mentioned that Amplats’ sales volumes were up 82% year-on-year in 2021 to just over 5.2-million PGM ounces, as the company processed built-up inventory from the Anglo Converter Plant (ACP) shutdowns in 2020.

Viljoen explained that, given the value distribution to other stakeholders, the company’s strong balance sheet, a healthy market outlook and confidence in the underlying cash generation of the business, the board declared a second-half dividend, consisting of both a base dividend and a special dividend, amounting to R33-billion, or R125 a share, which is a 100% pay-out ratio of headline earnings.

This took the full-year dividend to R300 a share, or R80-billion.

The final gross dividend of R125 apiece comprises of a R49-a-share base dividend, equal to 40% of headline earnings, minus a R9.80-a-share dividend tax and a R76-a-share special cash dividend, equal to 60% of headline earnings as an additional divided, from which R15.20 a share of dividend tax will be deducted.

Amplats had net cash of R49-billion at year-end, compared with net cash of R18.7-billion at the end of 2020.

Return on capital employed increased to 183% in 2021, compared with 72% in 2020.

The company plans to invest R18-billion in capital expenditure this year, of which R14-billion will comprise sustaining capital and about R4-billion will entail expansion capital.

PRODUCTION PERFORMANCE

Amplats delivered record refined production of 5.1-million PGM ounces in 2021, marking a strong 89% recovery after experiencing processing backlogs in 2020.

The company had to rebuild its ACP Phase A unit following an explosion in March 2020, which was completed and ramped up towards the end of the year, while the Phase B unit had experienced on-and-off issues with water leaks and was also undergoing a rebuild.

Amplats increased its metal-in-concentrate production by 13% year-on-year to 4.3-million PGM ounces, which was in line with production of 2019 – a baseline of pre-pandemic performance.

Total PGMs in-concentrate production from the company’s own-mined operations increased by 12% year-on-year to 2.8-million ounces.

Refined PGMs production guidance for this year has been set at between 4.2-million and 4.6-million ounces, while metal-in-concentrate production is expected to range between 4.1-million and 4.5-million ounces.

Platinum group metals (PGMs) miner and marketer Anglo American Platinum (Amplats), which on Monday reported a record 2021 financial performance, is collectively evaluating options to access multiple forms of renewable energy across South Africa, including hydro pump power and wheeling renewable energy to the grid.

The Johannesburg-listed company set 2030 targets to improve energy efficiency and reduce absolute greenhouse gas emissions by 30% against the 2016 baseline and to achieve zero Scope 1 and 2 emissions by 2040, Amplats CEO Natascha Viljoen said on Monday, when the company reported earnings of R108-billion, net cash of R49-billion and a return on capital employed of 183%. (Also watch attached Creamer Media video.)

Scope 1 and 2 emissions increased to 4.58-million tons of carbon dioxide equivalent as total energy requirements increased owing to the addition of the recently commissioned sulphur dioxide abatement plant at Polokwane, which continues to draw electricity from Eskom.

The roadmap to reach the 30%-by-2030 emission cut is focused on three main areas.

The company is implementing solar photovoltaic plants to generate renewable power, with construction of a 100 MW plant to begin shortly at Mogalakwena.

“We are developing our 300 t hydrogen fuel cell mine truck and the technology will be rolled out across the rest of our fleet once proven,” said Viljoen.

The target of zero waste to landfill is also close to being achieved. “At the start of the year, we still had five outstanding work waste streams to find sustainable solutions for, after which we found solutions for three during 2021,” Viljoen told the results presentation covered by Mining Weekly.

TIMBERLESS DISHABA MINE

The modernisation programme at Amandelbult , which utilizes technologies to improve safety, mine productivity and simplify operational logistics, is advancing Amandelbult from conventional mining methods to a hybrid mining method, utilising a suite of modern equipment and continuous operations.

“We have fully rolled out rock stop nets, implemented rock movement detection systems and Dishaba has been converted into a timberless mine, removing fire risk, increasing efficiencies and directly contributing to a year without fatalities. The new mining system design has resulted in illuminated decongested workplaces that will allow for work to be executed more safely and sequentially within a more efficient mining cycle,” said Viljoen.

In areas where this has been rolled out, productivities have increased by up to 20%.

Many technologies are being trialled at Tumela East Dropdown, where global benchmarking is being used to improve the mechanised mining design and the technologies deployed.

LIFE EXTENSION, NEW SHAFT, R3.9BN CAPEX

The Mototolo Der Brochen South 30-year life extension project approved by the board last year leverages the existing Mototolo infrastructure into the down-dip Der Brochen resource, where Mototolo’s mechanised board-and-pillar extraction method will be deployed to mine Der Brochen’s upper group two orebody. This is expected to ensure that the mine continues to be positioned in the bottom half of the primary PGMs cost curve.

The project includes development of a new shaft to replace the depleting Mototolo reserves at the Lebowa and Borwa shafts. With the completion of the concentrator bottlenecking project in the third quarter of 2021, production from Mototolo Der Brochen is expected to be 250 000 PGM ounces a year.

The total capital investment is expected to be R3.9-billion in nominal terms. At long-term consensus pricing, the financial returns of the project are robust. An internal rate of return of more than 25% is expected, within six years from first production in late 2023.

AIMING FOR ZERO HARM

“I am grateful that we completed the year without any fatal incidents at our own-managed operations or at our non-managed joint-operation Modikwa. This is an important milestone for us as we work tirelessly to keep our employees safe, ...

The mining industry is in an exceptional position to make a bold pivot to a sustainable future, and environmental, social and governance goals represent the most significant opportunity for the mining industry to create long-term value, trust and sustainable growth, says assurance and advisory multinational PwC South Africa energy strategy and infrastructure director James Mackay.

“The mining industry has rebounded from the impact of Covid-19 and is in an excellent financial position. Operationally, it has never been in a stronger financial position and the conversations now should centre on how to repurpose and rebalance mining.

“National and global narratives say that the industry must change, and partners are key to this. However, there are concerns that the world and the industry are not dealing with the pace of change, as a disruption becomes exponential once past a tipping point in terms of policy and global shifts in markets,” he says.

However, if South Africa cannot fix its energy challenges, other economic interventions and the green energy transition will not succeed, says Mackay.

There are significant opportunities for mines into the future. There can be no transition to a low-carbon future without mining the minerals required by battery and energy technologies, which are the essential building blocks of a low-carbon economy, says industry organisation Minerals Council South Africa environment, social and health senior executive Nikisi Lesufi.

“Therefore, South Africa must propagate exploration strategies and advance fast-tracked processes to ensure we will be mining these minerals in the future. There are also other metals that are essential to a low-carbon future that are present in South Africa.”

South Africa should focus its efforts on meeting the needs of its niche mining operations, including deep-level conventional mining and low-profile mechanised operations. There are only a handful of such operations in the world and local mines will typically not find suitable equipment from original-equipment manufacturers (OEMs) to meet their decarbonisation requirements, says precious and battery metals producer Sibanye-Stillwater energy and decarbonisation manager and industry association Energy Intensive Users Group chairperson Jevon Martin.

“This situation can be overcome by industry stakeholders, including mining houses, OEMs and technology providers, supporting open innovation to solve specific South African mining problems,” he says.

This will allow the sharing of information, resources and risks, and provide economies of scale. This open innovation can provide a competitive advantage to all South African mining companies and help the industry to remain sustainable, he says.

“This is particularly true in terms of mobility solutions, such as battery electric vehicles and hydrogen technologies, as well as underground mining vehicles, which is where mines struggle to find technologies that meet our needs,” says Martin.

Reform Acceleration

The Minerals Council is calling for the regulatory framework to be changed to recognise the principles of a differentiated, but common, approach to licensing and approval processes, says Lesufi.

“Mines and mining houses operate in various jurisdictions with different nationally determined contributions. A common but differentiated approach is important, with the common part being a ubiquitous commitment to progress to low-carbon objectives,” he says.

This differentiation is similarly required within the mining sector, as not all companies and operations are at similar maturity and capacity levels or pace of development. Some mines are progressing much faster, while other operations will need to be assisted to progress towards national and industry- agreed low-carbon goals, highlights Lesufi.

“We are not all facing similar challenges,” agrees gold producer Gold Fields South Africa executive VP Martin Preece, responding to a question from Mackay about the financing required to eff...

Johannesburg has a unique history. If not for mining, there would be no city. The mines, however, did not come to the city, rather the city came to the mines.

What resulted was poorly regulated urbanisation and hundreds of thousands of people living in close proximity to former mining infrastructure and mine dumps. (Also watch attached Creamer Media video.)

Surface gold recovery company DRDGold reports that conventional environmental and closure standards are proving inadequate to contain the impacts of mining on surrounding communities.

Most of the communities that live near the facilities of surface gold mining company DRDGold are, the company says, in the grip of poverty and socioeconomic stress.

The social value-add of the Johannesburg- and New York-listed DRDGold is thus focused on the realities faced by these communities and the aim is to alleviate poverty and provide educational opportunities to the youth.

The company’s operating footprint spans Johannesburg in both the East Rand and Far West Rand. An integral part of the mining process is to remedy the negative aspects of that legacy both by rehabilitating through mining – the recycling of old mine dumps and slimes dams – and by vegetating those that have been a permanent feature of the surrounding landscape.

The company thus sits at the epicentre of the modern world’s circular economy imperative.

“Many of our communities are people who really live in abject poverty,” DRDGold CEO Niël Pretorius told Mining Weekly in a Zoom interview.

“So we decided to be that first step out of poverty. It's something very basic, very intuitive. Start with nutrition, the ability to feed your family. That's the first thing – poverty alleviation and then youth education. We hire maths, and science and accountancy teachers, and we offer extra classes to children.

"We've had more than 4 000 families join into this, and we've had more than 5 000 pupils taking advantage of these extra classes. The network's been established, and amongst the people who matter to us, the ones that we want to be assisting to self empower, the response has been really good. We think that, increasingly, there's also a relationship building and we want to leverage that to develop the informal economy.

“We are firm believers that the informal economy is going to be a powerful catalyst in poverty alleviation. There's a huge amount of money that goes into the informal economy by way of social grants, and we need to find a way to create a stickiness into those little micro economies, and assist in the establishment of businesses, so that money can be spent over and over again in that same economy, so there's less of a dependency and more of a self-reliance and sustainability,” said Pretorius.

The company, which this week continued its uninterrupted 15-year run of dividend-paying to its shareholders, has come up with 41 different programmes aimed squarely at enhancing the informal economy broad-based livelihoods project with the University of Pretoria’s enterprise research department.

Mining Weekly: There are still a lot of mine waste dumps between Soweto and Johannesburg, an area you once described as an historic Berlin Wall-type of separating structure. Now that we've got a Red Tape Czar in the form of Sipho Nkosi, can’t we once-and-for-all extract the gold from those dumps and allow the people to live closer to town and avoid having to travel so much in taxis, by recycling the dumps and creating new living areas?

Pretorius: Absolutely, I think it's still the most effective way of just improving quality of life in and around Johannesburg. The fact of the matter, though, is that the gold content will be enough to pay running costs, but not enough to pay the capital on top of the running costs, or to have the initial capital infrastructure established. Hopefully there will be a platform for better collaboration.

Twelve automotive associations have signed a memorandum of understanding (MoU) to drive the development of the automotive industry in Africa.

The automotive sector, whilst key for the industrialisation of Africa, is often associated with numerous challenges, including market fragmentation; a lack of regulatory alignment between African countries, as well as between the European Union (EU) and Africa; industrial and trade policies that are not conducive to local and foreign investment; affordability issues; as well as a lack of access to finance for consumers and local suppliers, says the African Association of Automotive Manufacturers (AAAM).

However, intra-African trade can be bolstered and diversified by developing a Pan African Auto Pact, which could expand the African new-vehicle market from one-million units a year to five-million units a year, notes the association.

“A coalition of the willing will see the development of manufacturing sites and allied industries and services – both for the [vehicle manufacturing] and supplier sector –thereby laying the foundation for pan-African integrated automotive value chains which will incorporate neighbouring countries, thus building a regional and continental production network.”

The launch of the African Continental Free Trade Area (AfCFTA) gives a boost to pan-African trade and investment opportunities, especially for the automotive industry, says the AAAM.

The AfCTFA agreement was one of the catalysts that led to the initiative to develop an MoU among European and African automotive associations, initially driven by the AAAM, the German Association of the Automotive Industry and the German-African Business Association. However, this has now grown into an MoU between 12 associations.

The MoU commits the associations to work jointly on seven key priorities, says the AAAM.

These include setting up a permanent round table between the African Union, the EU and auto industry associations.

EU and African governments are also to pursue trade initiatives through the implementation of existing agreements, with the aim of increasing business opportunities and further expanding EU-Africa trade in automotive products.

The MoU also commits to advancing the integration of African companies into global value chains and to support the building of the necessary infrastructure and logistics.

The memorandum further calls on the EU to enhance its support for the implementation of the AfCFTA, and to favour Africa’s industrialisation and the expansion of the African automotive market.

The MoU also calls for governments to support knowledge transfer, provide financial resources and give political priority in establishing a pan-African production and trade system that will reinforce and expand existing African automotive value chains.

Lastly, the memorandum encourages the EU to financially support the development of sustainable and smart mobility, as well as affordable vehicle financing solutions to increase mobility within African cities.

“The trade and investment climate in Africa can only be improved together,” says AAAM CEO Dave Coffey.

“We are convinced that Africa has great potential to develop a promising automotive industry that will provide long-term employment.

“The fact that African and European associations have agreed on key points to further develop the industry on the continent is an important milestone. Now political representatives are to support this by creating the framework conditions for the industry to develop and grow.”

The MoU signatories are the AAAM; the German-African Business Association; the German Association of the Automotive Industry; the Kenya Association of Manufacturers; the Tunisian Automotive Association; the National Association of Automotive Component and Allied Manufacturers in South Africa; the National Association of Automobile Manufacturers of South Africa; the European Association of Automotive Suppliers; the European Business Council for Africa; the Europ...

The shift from coal-fired to clean energy in South Africa could deliver an additional 250 000 jobs and more than $10-billion, or R150-billion, in gross value-add to the economy over 25 years, if an ambitious green recovery is pursued, the Global Wind Energy Council (GWEC) states in its 'Capturing Green Recovery Opportunities from Wind Power in Developing Economies' report.

The energy transition, kickstarted with the commitment of $8.5-billion in financing agreed at COP26, would also deliver enormous decreases in carbon emissions equivalent, as well as save more than 50 Mℓ/y of water from 2026, the global body says.

The report quantifies a series of impacts that would result from pursuing a green recovery strategy, in which public policy shifts towards the clean energy transition to accelerate deployment of wind projects over the next five years.

This approach would not only support countries in their progress to meet energy and climate goals, but would enable them to realise a range of socioeconomic benefits from long-term job creation to cleaner air and water conservation, the GWEC says.

"Contributing about 5% to global greenhouse-gas emissions, South Africa has an energy system heavily dependent on coal. The country also struggles to maintain a stable energy supply and experiences power cuts and frequent load-shedding.

"Wind energy can address these energy supply issues, as well as cut emissions and add significant stimulus to the economy," the GWEC says.

Wind is now a highly affordable source of energy in South Africa, according to Department of Mineral Resources and Energy statistics. In the Renewable Energy Independent Power Producer Procurement Programme bid window 5, one of the wind projects was priced at just 34c/kWh, which is well below Eskom's coal input costs alone. The average cost of wind projects was 49c/kWh.

The country also has flagged an aspiration to become net-zero by 2050, and for 22.5% of the energy mix to come from wind energy by 2030, up from 5% in 2021. To reach these targets, a rapid expansion of renewable energy capacity will be required, the council says.

In a business-as-usual scenario, South Africa will create 130 000 direct and indirect full-time equivalent (FTE) job years through wind energy between 2022 and 2026 in the development, construction and installation phase.

In addition, 14 000 annual direct and indirect FTE job years are created in operations and maintenance, which continues for the lifetime of the wind farms.

"However, in a green recovery scenario in which South Africa boosts renewable energy investments, 180 000 direct and indirect FTE job years are created from wind energy in South Africa between 2022 and 2026 in the development, construction and installation phase.

In addition, 22 000 long-term annual direct and indirect FTE job years are created in operations and maintenance. There is a potential upside of 250 000 new FTE jobs created in a green recovery scenario," the report shows.

In a green recovery scenario, 27 900 GWh/y of wind generated electricity will be produced from 2026, while 676-million tonnes of carbon emissions will be saved during the lifetime of the wind farms. This approach will also save 52 Mℓ/y that would otherwise have been used for thermal power generation.

BARRIERS

"One of the primary hindrances to faster wind energy development in South Africa is a lack of development of the power transmission network," the GWEC says.

For example, the Northern Cape region, which currently has the best wind resources in the country, has some of the least developed transmission networks. The development of wind projects in these areas are held up by a lack of transmission capability, and State-owned power utility Eskom has been slow to improve the infrastructure in these areas.

However, Eskom has created a roadmap to improve the speed of its internal workings, as well as the development of the network. This will primarily be achieved by separating generation, transmission...

With a view to reducing its carbon footprint as well as addressing the uncertainty of the supply and cost of electricity, surface gold mining company DRDGold has taken a decision to construct a solar power plant and a power storage facility at Ergo, the gold from mine waste operation on the East Rand

The board of the Johannesburg- and New York-listed company has approved the capital expenditure for the first phase, involving the upgrade of the existing supply line to the Brakpan/Withok tailings storage facility to 88 kVA, the construction of an initial 20 MW photovoltaic plant, and ten power storage facilities of 10 MW each. (Also watch attached Creamer Media video.)

This will be another important thrust across DRDGold’s already far-reaching environmental, social and governance (ESG) spectrum.

“The first phase – that which is going to happen in the near term, as soon as Eskom gives us the go ahead to do the upgrading of the line, which we believe is imminent – we'll do ourselves,” DRDGold CEO Niël Pretorius told Mining Weekly in a Zoom interview.

“The board's happy for us to do that ourselves. We’re a company that does not have any debt, we’ve got in excess of R2-billion in the bank. This is a project where we think green funding would be really well suited, maybe some sort of a green bond, because of the nature and how it delivers into the ESG aspect, as well as carbon reduction. All of those details we would want to share with the market once we’ve sealed them, and once we know that they are what we think they are,” Pretorius said.

Storage was something that the surface gold recovery company was intent on doing regardless of the incorporation of solar.

“We were going to charge these batteries off the Eskom grid during off peak periods, and then draw during peak periods. Just the saving of not having to pay the premium for that charge during peak period was going to be enough to justify the storage itself. The storage is even more compelling, financially speaking or commercially than the solar panels themselves but it's a good match and you want them both,” Pretorius added.

Regarding the need for considerable land when going solar, he said: “We have plenty of land. I think DRDGold is probably one of the largest landowners in Johannesburg, with north of 6 000 ha. But there, right next to the Ergo plant, is more than sufficient land where we can build the plant, locate the solar panels as well as the storage facility, which is modular in design. This will be linked to the Eskom grid, and also feed back into the grid, hopefully to ultimately also draw power at some of the other operations against some of the units that go back into the grid. It's a project that's been five years in the making. We were cautious to begin with in terms of the sort of technology that we wanted to invest in.

“The model wasn't entirely convincing initially, but I think we've reached the stage now where both the volatility of supply, the quality of supply and also the pricing of supply – those things have just escalated to a point where you simply cannot wait any longer. The technology is also rapidly improved in the near past.

“The panels now compared with the panels of five years ago show quantum improvement in terms of efficiency, quality and durability, we’re in a high hail belt and so all those factors were important considerations. We starting out initially with roughly on third of what the total project design envisages over a longer period of time, and we setting it up in such a way that we feeding back into the Eskom grid, not the municipal grid.

We could not get the municipality across the line, they wouldn't sign consents, they wouldn't budge. “They literally stonewalled this thing, so we had to find a way to get back straight back into Eskom and their grid. Hence the 88 kVA line that is going to go into the Eskom substation, at the Brakpan tailings dam. That's the first phase and that enables us because it goes directly into the Eskom gr...

Gold and copper mining company Barrick has a detailed emission reduction roadmap in place that allows it to be unequivocal about the extent to which it will mitigate against climate change going forward.

“We are absolutely clear that we will reduce our greenhouse gas (GHG) emissions by 30% by 2030 and what makes it different for Barrick is that each one of these projects meet our 15% IRR hurdle at $1 200/oz gold,” Barrick CE Dr Mark Bristow spelt out to Mining Weekly unambiguously in an interview following its publication of another superb set of financial results. (Also see graphic of roadmap attached.)

Free cash flow from the operations remained robust at the year’s end, with net cash at $130-million after the record cash distribution of $1.4-billion to shareholders. Barrick’s production in 2021 was in line with guidance for the third successive year. The company also more than replaced its gold reserves net of depletion at a better grade owing to its ongoing and far-reaching exploration efforts.

Regarding emission reduction, the New York- and Toronto-listed company has refined and engineered projects that are poised to deliver a carbon dioxide equivalent (CO2e) reduction of 25% against a target of a 30% reduction, or 5 279 000 t, of CO2e, and it is working on the other 5%.

“That’s all Scope 1 and 2,” said Bristow.

Effectively, however, some of it might be considered Scope 3, for instance, the bringing in of green power from Chile to its Veladero mine in Argentina – a significant saving owing to Chile’s energy being among the greenest in the world.

“We’re very clear about what we can do and we’ve got a fantastic plan, and now it’s about understanding Scope 3, and we’re way down the road in that. We’re not interested in taking away the business from our in-country service providers.

“What we’ve got to do is partner with them and work with them to be able to participate in our business and drive their own businesses and at the same time deliver improvements on emissions.

“We’re doing exactly the same with water and one of the things that I think is completely neglected is that if you want a healthy world, you need to worry much more about biodiversity. It’s a practical investment that is required. Mining has been very good with reforestation but the biodiversity on our planet is an important component of the future survival of our environment on this planet. The planet will always look after itself. The issue we’re facing as humans on this globe is what we do about it and it’s often lost on the people in the cities,” said Bristow, whose company is:

relocating rhino back into the Garamba National Park, in north-eastern Democratic Republic of Congo (DRC). “The last elephant that was poached at Garamba was in September 2019. Before that, it wasn’t uncommon to have 300 elephants poached in a year. It shows you what investment can do,” said Bristow.

carrying out biosphere reorientation on a biosphere heritage site in Mali;

looking at the preservation of pristine forests in Zambia;

assisting the Papua New Guinea government to manage the country’s carbon capture endowment;

funding sage grouse conservation in Nevada, US; and

being part of a project in Dominican Republic to protect a small endangered species of gecko.

SCOPE 3 ROADMAP ON WAY

On the company’s upcoming Scope 3 roadmap, Bristow said: “We’ve done a lot of work on identifying our Scope 3 emissions. It’s about 4% of our total emissions. We’ve identified them and we’ve done it on a value basis first because it’s a very complicated story and it’s mostly upstream, going into the transport and manufacture of our consumables.

“We’ve looked at the largest value players, in other words where we spend more of our dollars, because we’re very mindful of disrupting or destroying the delicate service provision infrastructure that we’ve invested in to ensure that our host countries participate in our economy.

“With that, we’ve committed 2023 to do with Scope 3 what we have done with Sc...