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The government of Madagascar and Rio Tinto QIT Madagascar Minerals (QMM) on December 10 celebrated the start of construction of a solar and wind energy project that will supply the ilmenite mine operations in Fort Dauphin, in southern Madagascar.

The renewable energy project is vital to the implementation of QMM's sustainable mine concept and enabling Rio Tinto's operations in Madagascar to reach carbon neutrality by 2023.

The renewable energy project, which will comprise 8 MW of solar capacity and 12 MW of wind capacity, is being built by independent power producer CrossBoundary Energy (CBE) under a 20-year power purchase agreement.

About 18 000 solar panels and four wind turbines will be installed as part of the project, which will also include an 8.25 MW lithium-ion battery energy storage system.

The solar plant is expected to start operations in 2022 and the wind plant in 2023.

The project will meet all of QMM's electricity needs during peak period and will provide up to 60% of its yearly electricity consumption. It will also enable QMM to reduce its carbon dioxide emission by about 26 000 t/y and its heavy fuel oil purchases by up to 8 500 t/y.

QMM will also replace the majority of the electricity it currently supplies to the town of Fort Dauphin and its 80 000 community members with clean energy.

"This project is a key component of our ‘sustainable mine’ initiative, which aims to leave a lasting legacy for present and future generations, built independently of our mining operations.

"We want to leave this legacy through permanent dialogue, the full integration of activities within the development plan of the region, responsible social and environmental governance, the reduction of our environmental footprint and therefore of our carbon footprint, and through the creation of economic and social opportunities increasingly independent of QMM.

"This project is a strategic test, not only in Madagascar but also in the mining industry as a whole, as we have to innovate and rethink our operations in order to combat climate change and leave a sustainable legacy," QMM president Ny Fanja Rakotomalala said during an event to celebrate the start of construction on December 10.

CBE managing partner Matt Tilleard said the QMM project would greatly improve Madagascar's standing as a regional renewable energy leader.

"This project is important in Madagascar's development strategy, particularly within the Plan Emergence Sud, which makes access to electricity for the people of the Anosy region a priority. We are pleased to see this project start on schedule, thanks to the unwavering commitment of all project sponsors and regulators.

"We are creating a public-private partnership model that will position Madagascar as a destination for technological innovation in the field of renewable energy and attract new expertise," Madagascar Energy and Hydrocarbons Minister Andry Ramaroson added.

During the ceremony, Energy Minister Baomiavotse Vahinala Raharinirina stressed the importance of Madagascar, and Africa as a whole, pursuing clean renewable energy, stating that this was a priority for the government of Madagascar.

The board of JSE-listed Anglo American Platinum (Amplats) has given the go-ahead for the R3.9-billion Mototolo/Der Brochen life expansion project to proceed.

The project is aimed at extending the life-of-mine of the Der Brochen mine to beyond 30 years, by enabling mining further into the resource, while leveraging existing Mototolo infrastructure.

“The Der Brochen project is one example of the high-quality, low-cost expansion options we have available in our existing portfolio of assets that will allow us to continue delivering industry-leading returns to shareholders,” says Amplats CEO Natascha Viljoen.

The Der Brochen upper group two orebody will use the same bord-and-pillar extraction method as the Mototolo mine, and will be a fully mechanised operation, positioned in the bottom half of the primary platinum group metals (PGMs) producer cost curve.

The project includes development of a new shaft to replace the depleting Mototolo reserves, but maintaining the 240 000 t a month mining rate.

Amplats will start with the R3.9-billion expansion project in the first quarter of 2022 and first production is expected late in 2023.

Meanwhile, Amplats continues to advance various workstreams on the Mogalakwena mine, including an optimal openpit plan, incorporating underground opportunities, optimising performance, creating trusting relationships with communities, developing hydrogen fuel-cell trucks, expanding concentrator capacity and using downstream processing to maximise value for the company.

Particularly, a feasibility study on a third concentrator, which focuses only on the capital decision on the timing, size and technology of a third concentrator, will continue into the first half of next year and will be submitted for board approval once completed.

Viljoen explains that this timeline does not impact the execution schedule of any of the workstreams. She assures that more detail on the status of the Future of Mogalakwena project will be provided in the 2021 annual results announcement on February 21, 2022.

Amplats expects its refined PGMs production for this year to be between 5-million and 5.1-million ounces. Output in 2022 will be lower than this year’s output as a result of the increase in built-up inventory processing this year, following upgrades to the company’s Anglo Converter Plant.

The company expects refined production in 2022 to range between 4.2-million and 4.6-million ounces of PGMs.

As a result of more maintenance, inflationary pressure on input costs and higher consumable input costs this year, the company expects its unit cost of production for the full-year to increase to R13 000/oz, higher than the R12 000/oz to R12 500/oz previously guided.

This will increase further to between R13 800/oz and R14 500/oz in 2022, which reflects ongoing inflationary pressure and increased physical mining activities at Mogalakwena.

Diversified miner Anglo American reports that it maintained a strong performance this year, with high demand for diamonds and overall production up 7% on the back of particularly strong production of platinum group metals (PGMs); as well as the expectation of a further improvement in 2022.

Unit costs also improved by 10% this year, despite consumer price index inflation and some production slowdowns.

The miner notes that capital expenditure of $5.2-billion was lower as a result of Covid-19 delays and supply chain disruptions, while unit costs for 2022 are expected to increase by 4%.

Outgoing CE Mark Cutifani, who will be succeeded by Duncan Wanblad in April, says Covid-19 has continued to pose challenges this year, particularly in the countries where vaccination uptake has been lower. “We have kept our focus on keeping our employees and communities safe and encouraging vaccination at the earliest possible opportunity. We need to continue being prudent with this virus and we will continue putting the safety and health of our employees first.”

Anglo forecasts that its capital expenditure for 2022 will be between $6.2-billion and $6.7-billion, reflecting 2021 deferrals and the Woodsmith polyhalite fertiliser project addition.

“Anglo is a resilient and agile business that is set to deliver 35% growth over the next decade at an attractive 50% margin,” he says.

FD Stephen Pearce says the company’s balanced approach is supporting sequenced investment in value-accretive growth and considerable long-term business improvement, alongside attractive shareholder returns. “We have delivered $10.3-billion in cash returns to our shareholders since 2017 and $4-billion in the [second half of this year] alone.”

The miner is also targeting its near-term performance improvement target to between $3.5-billion and $4.5-billion by 2023, as it accelerates the delivery of its P101 and technology programmes, while also bringing growth projects onstream. “First and foremost is our Quellaveco project, in Peru, in mid-2022, where we have also increased early copper production plans to create additional value,” says Cutifani.

In addition, he says the company is “clear” that climate change presents a “defining challenge of our time”, and that Anglo has a crucial role to play in supporting the transition to a low carbon economy by producing many of the metals and minerals that enable decarbonised energy and transport.

“Of course, we are also moving at pace to reduce our own emissions and have committed to operate carbon-neutral mines by 2040, while having an ambition to reduce our Scope 3 emissions by 50% in that same timeframe,” states Cutifani.

Pearce adds that Anglo’s ongoing investment in the business also supports its emissions reduction objectives and the miner, therefore, expects its normal cycle of capital investment to continue to fund the majority of our operational decarbonisation projects.

Meanwhile, Cutifani highlights that, combined with Anglo’s integrated approach to technology, in pursuit of the safer and more sustainable supply of materials essential to the energy transition and growing consumer demand patterns, the miner is “well positioned” to meet the expectations of its full breadth of stakeholders across society.

WOODSMITH

Anglo, in a statement, reports that the upgrading of the scope of its UK-based Woodsmith polyalite fertiliser project will enhance the project’s long-term value.

The miner conducted a detailed technical review of this project in mid-2020 to ensure the technical and commercial integrity of the full scope of its design.

Now largely complete, the review has confirmed the findings of Anglo’s due diligence that a number of elements of the project’s design would benefit from modification to bring it up to the miner’s safety and operating integrity standards and to enhance the value of the asset for the long term.

To bolster leadership of this project, Anglo has appointed Tom McCulley, who has led the development of the Qu...

Mining Weekly Editor Martin Creamer discusses the United Nations climate envoy calling for the urgent specification of energy transition action; the Shell Foundation's calls for an energy transition through on-the-ground projects to transition developing countries to renewable solutions; and Glencore's own just transition commitments and its plans to be net zero by 2050.

Members of the International Council on Mining and Metals (ICMM) on Thursday announced their commitment to disclose all mineral development contracts from the start of January this year, wherever they operate, marking a significant step by about a third of the global mining and metals industry to strengthen mineral resource governance.

This new commitment requires members to disclose contracts they have committed to, what taxes they must pay and when payments are due. Members are also encouraged to disclose mineral development contracts granted or entered into before that date, ICMM stated.

ICMM’s 28 mining and metals company members and over 35 national, regional and commodity association members include South Africa-linked companies such as African Rainbow Minerals, Anglo American, Glencore, Sibanye-Stillwater, AngloGold Ashanti, Gold Fields, BHP, South32 and Rio Tinto.

This new commitment builds on ICMM’s existing membership requirement on ethical business practices and sound systems of corporate governance through the disclosure of tax and royalties as set out in ICMM’s mining principles. It is part of ICMM’s Transparency of Mineral Revenues Position Statement, representing a leadership position that is aligned to the existing requirements on contract transparency of Extractive Industries Transparency Initiative (EITI), an organisation that addresses key governance issues in the extractive sectors.

ICMM has also published the tax contribution of its members. In 2020, members reported total payments of $23.7-billion, representing an effective tax rate of 39.7%, an increase of 5% on 2019.

This increase is a result of lower profitability in 2020, driven by a decline in commodity prices. This latest report, which was produced by PwC, found that between 2013 and 2020 ICMM members paid more than $185-billion – made up of corporate income tax of $119.1-billion and royalties of $66.4-billion – to tax authorities across the world.

“Contract and tax transparency are two critical components of a safe, fair and sustainable mining and metals industry, representing two sides of the same coin. The former allows citizens to understand what should have been paid, and the latter enables them to see what has actually been paid. Underpinning this is consistent, transparent disclosure, which is why ICMM has also published its annual tax contribution report for 2020,” ICMM CEO Rohitesh Dhawan stated in a media release to Mining Weekly.

“Transparency and openness are at the heart of ICMM’s efforts to maximise the contribution of mining and metals to sustainable development,” added Dhawan, who expressed the hope that the commitment would energise everyone to continually seek ways of supporting development through disclosure.

In welcoming this commitment from ICMM member companies, EITI chairperson Helen Clark noted that contract disclosure had been a requirement for EITI-implementing countries since January 1, 2021.

“With both countries and companies now committing to their publication, we hope to see accelerated progress in this vital area of transparency. Publishing contracts is a powerful weapon against corruption, enabling contracts to be compared, and creating a level playing field for business. Transparency incentivises governments to arrange fair contracts with reputable companies, drafted in a way that is consistent with the country’s legal framework, and deters officials from concluding contracts that are disadvantageous or result in personal gain. In the context of the energy transition, contract transparency will also enable governments and stakeholders to assess how the extraction of raw materials will influence their ability to reach climate change targets. These are strong reasons to support contract transparency, and we would encourage other companies in the extractive sector to follow the lead of ICMM members,” Clark stated.

Oxfam Extractive Industries Global Program associate director Maria Lya Ramos added that if citizens of ...

TSX-listed Ivanhoe Mines’ South African subsidiary, Ivanplats, has concluded stream financing agreements with Orion Mine Finance and Nomad Royalty Company for a $200-million gold streaming facility and a $100-million palladium and platinum streaming facility for its Platreef palladium/rhodium/platinum/nickel/copper/gold project in South Africa’s Limpopo province.

The proceeds will be used to advance the first phase of Platreef’s mine development, with commercial production expected in 2024.

The definitive feasibility study for Platreef’s phased development plan, which will provide updated production forecasts for the initial mine and subsequent expansion, is nearing completion with its release expected in first quarter of 2022.

Ivanplats has also signed documents relating to offtake arrangements for 100% of Platreef's Phase 1 platinum-group metals (PGMs) concentrate production, which is expected to exceed 40 000 t/y containing six payable metals – palladium, rhodium, platinum, nickel, copper and gold.

The offtake arrangements are with Northam Platinum and Heron Metals, in a joint venture in which Singaporean-registered company Trafigura has a majority shareholding.

The terms of the proposed offtake with Heron Metals / Trafigura are based on a non-binding indicative term sheet and are subject to negotiation and execution of definitive documentation for a concentrate sales agreement.

“The stream financing agreements, which represent a small fraction of Platreef’s incredible resource base, and accompanying offtake arrangements are critical milestones in the progression to commercial production for Ivanplats.

“They provide funding for a significant portion of the mine's initial phase of development, as well as a long-term home for our PGM, nickel and copper concentrates," says Ivanhoe Mines president Marna Cloete.

Moreover, she says Platreef has concluded e a three-year collective agreement with its employees that “values and respects their expertise, their contributions during the pandemic and their role in building the world's next great mine”.

Real projects on the ground, that can transition developing countries to renewable solutions justly, are what is needed now, along with the correct use of blended finance to create sustainable entrepreneurship as asset bases are repurposed, a global webinar has heard.

Without a just energy transition, the world will likely end up with a less hot planet but far hotter social temperatures within the socioeconomic fabric.

Renewable energy solutions that can simultaneously help emerging markets to grow are what is urgently needed, the GlobeScan climate event, covered by Mining Weekly, emphasised.

“The great thing is that big companies will be able to have projects and will be able to attract capital to have them. However, we need more than that. We need local entrepreneurs in local markets who are able to drive some solutions,” Shell Foundation chairperson Gail Klintworth told the webinar in which United Nations special envoy on climate change action and finance Mark Carney and Anglo American CE Mark Cutifani also took part.

Klintworth, whose Shell Foundation is a social investment initiative that works with external partners to promote sustainable development, reported that blended finance was increasingly enabling local entrepreneurs to deliver some return, and if allowed to play its supposed role, would do so to an even greater extent.

“My experience in the last couple of years is that there’s so much risk aversion in those who should be derisking,” said Klintworth.

But what had to be top of mind was that it was not going to be “the big guys only that can solve this. We need more entrepreneurs, and we need to put some faith in them”, she added.

In response to GlobeScan CEO Chris Coulter on the potential for the negative climate populism being displayed in many the countries of the world to delay progress, Klintworth described as great youth excitement about the combatting of climate change. In addition, the awareness level of climate impact was high.

But she questioned whether governments had done enough to inculcate in their citizens the great potential socioeconomic benefit of the energy transition, and that just transition structures were envisaged for especially coal mining towns faced with the need of the globe to decarbonise.

Carney reported that $4-trillion to $5-trillion a year would be needed for the transition which made the $130-trillion available sufficient to arrive at net zero by 2050 at the latest.

Cutifani’s blueprint for mines in the decarbonisation process is to introduce renewable energy to reduce carbon emission and to generate green hydrogen, and then to deploy the green hydrogen to replace the diesel that the mines use to power haul trucks. That plan is at an advanced stage of implementation at Anglo American Platinum’s platinum group metals (PGMs) mine at Mogalakwena, Limpopo.

This green hydrogen produced by proton exchange membrane (PEM) electrolyses is catalysed by platinum and iridium PGMs. PEM fuel cells, in turn, convert the green hydrogen into clean electricity, catalysed by platinum and ruthenium PGMs.

The Hydrogen Council reports that electrolyser markets could grow to one-quarter of a terawatt by 2030, and over three terawatts by 2050, to meet the demand for fossil-fuel-free green hydrogen,

The electrolysis of water – when an electric current is used to separate water into its component elements of hydrogen and oxygen – is a well-established way of producing hydrogen, the World Platinum Investment Council (WPIC) has reported.

When the electric current is derived from a renewable source – solar photovoltaic panels or a wind turbine, for example – the hydrogen made is ‘green’.

PEM electrolysers and alkaline electrolysers, South African versions of which are also PGM catalysed, are the two leading electrolysis technologies commercially available. PEM electrolysis creates a reaction using an ionically conductive solid polymer, rather than a liquid, as in an alkaline electrolyser.

PEM electrolysers...

The National Union of Mineworkers (NUM) has expressed concern about the “deepening crisis” in South Africa, saying it feels that the “gains of the 1994 democratic breakthrough are fast withering away under the weight of deepening inequality and mass unemployment”.

During its extended national executive committee (NEC) meeting earlier this month, the attendees noted that while the union “did not need Covid-19 to lay bare the depth of the social, economic and political crisis facing South Africa”, the pandemic had made everything more stark.

“No country or State can sustain a society where almost 50% of people eligible to work are unemployed. Nor is it possible to talk of a united, single nation where just 10% of the super-rich own 90% of the wealth. And no society can develop where a woman is raped on average, every 25 seconds or is killed on average every eight hours by an intimate partner,” the union said in a statement issued on December 7.

Taking this into account, the NUM stressed that a “spiral of economic decline” was under way and that it might precipitate social collapse on an unprecedented scale.

Moreover, the union lamented that “billions of rands are lost to corruption and other forms of profit shifting, including the central role of ‘western civilised’ transnational corporations”.

This, it said, was some of the money that the State should be investing in social renewal, creating decent work and reindustrialising the economy for a wage-led low-carbon development path.

In addition, the NUM noted that the crisis of mass unemployment was worsening each and every quarter, owing to a stagnant economy caused by “an investment strike undertaken by big business and systematic disinvestment from the South African economy”.

It stressed that “government austerity, the favouring of privatisation through public-private partnerships and conservative monetary policies imposed by both the South African Reserve Bank and the National Treasury have significantly contributed to the widening of inequality, where the poor are becoming poorer and a tiny elite amasses extreme levels of concentrated wealth”.

It further stressed the ongoing crisis at State-owned power utility Eskom, stating that the “unbundling and the privatisation of Eskom would not address Eskom’s functional and financial crisis but simply accelerate its death spiral, with serious consequences for Eskom workers and the working class more broadly”.

Moreover, it said that the privatised renewable energy programme would “not be able to meet the challenges of ensuring a secure and cheap supply of electricity. The introduction of an electricity market will only contribute to making electricity more expensive”.

As such, the NUM will be marching to Eskom’s head office in Megawatt Park on December 11 as part of a rolling programme of mass action directed at stopping the unbundling and privatisation of Eskom.

The NUM called on all trade unions, trade union federations and broader society to join the march to Megawatt Park, where it intends to demand the disbandment of the Eskom board, as well as the resignation of the CEO, the resignation of the COO and for the conditions of service of its members to be reinstated.

On the energy front, the NUM NEC meeting attendees also rejected the just energy transition, saying it would be “very irresponsible for South Africa to stop the use of coal, unless and until we are fully compensated by the rich industrialised countries”.

The NUM believe coal should continue to be used but in a responsible way.

“We need to start building environment-friendly power stations and investigate all technologies, which can reduce the pollution of greenhouse-gas emissions, including carbon capture and storage”.

The NEC also discussed matters pertaining to South Africa’s high fuel prices, gender-based violence, mandatory Covid-19 vaccinations and local government elections.

Regarding the vaccinations in particular, the NEC is strongly opposed to the decision t...

The energy transition is woefully under specified, the United Nations special envoy on climate change action and finance Mark Carney told a global webinar, in which he described the specifying of energy transition action as being “a matter of urgency”.

Such specification, the webinar heard, needed to include:

a framework for the responsible retirement of stranded assets; and

the winding down of assets that will not develop their entire geological life.

Some $4-trillion to $5-trillion a year is needed for the transition and available for it is more than $130-trillion – the value of the collective balance sheets of already committed financial institutions, asset owners, asset managers, banks, insurers, export credit agencies and others.

“Broad brush, the money’s there, and in terms of the commitments of these institutions, obviously it’s net zero by 2050 at the latest. But very importantly, it’s a fair share of the 50% reduction by 2030 – so there is a near-term target, an actionable target,” said Carney.

More than 5 000 major companies round the world now have the most rigorous science-founded, target-based net-zero plans.

Moreover, there are five-year decarbonisation blueprints for more than 500 banks and asset owners, and these need to be rolled out within 18 months and reported on annually.

The future will thus be brought to the present by these institutions, said Carney, who was speaking during a GlobeScan webinar covered by Mining Weekly.

GlobeScan CEO Chis Coulter, who moderated the online event in which Anglo American CE Mark Cutifani and Shell Foundation chairperson Gail Klintworth also took part, pointed out the significant increase in the past six years of global populations favouring the imposition of carbon taxes.

The majority is favouring a tax on coal, oil and petrol, which was indicative of some of the climate change anxiety being experienced across a broad front, said Coulter. (Also see attached slide.)

Regarding the measures that should be taken on a go-forward basis, these five points were raised:

countries need to close the planet’s global warming gap by introducing and implementing credible and predictable policies as a matter of urgency;

scaled capital needs to be merged into developing economies that need an extra $1-trillion a year by the end of this decade;

nature resilience needs to be harnessed through tree planting and other carbon-sink measures;

clear pathways for renewable energy need to be set; and

the just transition must be assured by the provision of action-specific leadership as it forms a major part of ensuring that energy transitions are successful.

“There are pathways for renewable increases, there are some simpler necessary elements of ending coal, but it’s very fuzzy in the middle in terms of fossil fuels,” said Carney, who described the just transition as forming a key part of getting the energy transition right.

A broader environmental, social and governance, or ESG, highlighting would allow the private sector to play a huge role in the just transition, even though it is first and foremost a public sector agenda.

WORLD UNITING AROUND NET-ZERO PATHWAY

Coming out of COP26, the world is coalescing around a net-zero pathway for global warming, which Carney sees as “the first net positive”.

The world is already at 1.1 ℃ warmer and the impactful frequency of extreme weather events has become far more severe. It is non-linear between 1.5 ℃ and 2 ℃, with 2 ℃ being a death sentence for Barbados, the world has heard.

By the end of COP26, countries had moved from 30% of global emissions covered by country-level net-zero objective two years ago to more than 90% now.

“So, again, a big shift,” he added.

Other positives out of COP26, he noted, were a series of side deals, some of them quite significant, including an end to deforestation by 2030, signed by more than 100 countries. COP26 also saw much greater private sector action, some of it mandatory for companies listed in the UK.

Stakeholders who attended MineSafe 2021 on November 25 have recommitted themselves to working towards the elimination of fatalities, injuries and occupational diseases on South Africa’s mines in pursuit of Zero Harm and to ensure each employee returns from work unharmed every day.

The urgency of interventions to address health and safety and, more specifically, the continued loss of life of employees in the mining sector cannot be understated, the Minerals Council South Africa said in a statement on December 6.

It noted, with concern, the deaths of 69 people so far this year, compared with 48 in the same period last year. This is the second consecutive year of regression in fatalities and the industry’s stakeholders have committed to urgently address the “unacceptable situation”.

In 2020, the total number of fatalities was 60, up from the lowest number on record, of 51, in 2019.

To achieve a step change towards transforming health and safety in the mining sector, stakeholders from the Department of Mineral Resources and Energy, the Minerals Council, organised labour, suppliers’ organisations, professional associations, the Mine Health and Safety Council and Mining Qualifications Authority have committed to taking full accountability in addressing the challenges besetting the mining sector.

Work is already under way to address falls of ground and transport-related accidents which are the leading causes of fatalities.

At the MineSafe 2021 Conference, stakeholders accepted responsibility to assist in ensuring individual and group commitments to improve health and safety performances.

The commitments agreed to at the MineSafe 2021 Conference would complement and help the mining industry to achieve the 2014 Summit Ten-Year Milestones, the council said.

The tangible outcomes of the MineSafe 2021 Conference included agreements on the implementation of, besides other interventions, treating all employees with respect, trust and dignity, while also assisting each other, asking for help and providing guidance to maintain a healthy and safe environment.

Agreements were also implemented to build the existing relationship by earning the trust of other stakeholders by honouring agreements and upholding commitments while engaging respectfully with each other.

Among other measures, stakeholders agreed to the implementation of the five-year R46-million investment on the implementation of Fall of Ground action plan launched at the Minerals Council ‘s National Day of Health and Safety in Mining held in July this year.

Stakeholders also intend to conduct a statistical analysis of all fatalities over the last decade using international leading practice methodologies and proposing an action plan to eliminate all other risks effectively through for example modern training methods.