Modern Mining December 2021

Talking points for 2021 W hile the COVID-19 pandemic has had a range of impacts on mining companies, the one thing the past year has taught industry is the value of building resilience to navigate uncertain futures. In what PwC terms a year of doom and gloom on so many fronts in its SA Mine 2021 report , the mining sector however delivered a sterling performance with value deliv- ered to all stakeholders.

will supply renewable energy to the Grootegeluk Complex, the integrated coal operations owned by another subsidiary of Exxaro, Exxaro Coal, in accordance with a long-term power purchase agreement. Elsewhere, Gold Fields is forging ahead with the construction of its 40 MW solar plant at South Africa’s South Deep mine, west of Johannesburg, following board approval in May this year. This fol- lows the granting on February 25 this year of a licence by the National Energy Regulator of South Africa. Another key talking point is how the COVID-19 pandemic has further accelerated the digitalisation of work processes in mining. The mining indus- try is increasingly making use of innovative and cutting-edge technologies to run more efficient operations, to manage risk, to improve health and safety, reduce the cost of maintenance and extraction, as well as bringing about a skills uplift. The COVID-19 pandemic has further accelerated the digitisation of the work process, as well as the adoption of automation and other innovative tools in the mining industry. At the height of the COVID-19 pandemic, the importance of good health and safety management at mining operations cannot be reiterated enough as the industry presses ahead with its goal for zero harm. Mining companies have strongly shown their commitment to continually evaluate their operat- ing practices to work towards a workplace with no injuries or illnesses. Like most industrial work, mining involves a lot of risk – and getting as close as possible to eliminating that risk and protecting workers always has to be a key priority. Looking ahead, industry figureheads have this year reiterated how demand for most minerals is projected to be high in order to achieve the energy transition. While fossil fuels have helped to improve living standards around the world for a long time, their associated greenhouse gas emis- sions have led to global warming. For instance, a 2021 study by Wood Mackenzie has noted that efforts to limit global warming to 2 °C would require the development of 23-million tonnes of new supply of copper by 2035. To put it in context, this new additional supply is similar to current global production levels. The study also predicts that the increase in copper demand will last longer than the increase during the super cycle of 2005 – 2015, when the growth was largely due to Chinese demand. The difference is that today copper is essential for the entire planet and does not depend on a single country. The development of this new supply of copper will require an investment of more than US$500-billion. 

As supply and demand jostled to find their way back to pre-pandemic levels, demand and prices were the outright winners. With record rand prices for gold, the platinum group metals basket, iron ore and more recently, coal, it was no surprise that the industry’s financial performance exceeded expectations on most fronts. Apart from the industry’s proven resilience amid volatility, for me there were several other talking points that shaped the mining industry in 2021. First and foremost was the renewed focus on environmental, social and governance (ESG). There was a time when the industry’s stance on ESG issues was a public relations tactic. However, in today’s rapidly changing business climate, attention to ESG issues is becoming critical to long-term competitive success. There is a common understanding that ESG represents one of the mining industry’s most sig- nificant opportunities for long-term value creation, building trust and sustainable growth. Miners are making significant strides to engage with their stakeholders and start to ‘bake’ ESG into the core of their strategies. To meet their ESG com- mitments, mining companies are getting serious about decarbonisation, while they are also work- ing hard to overcome the trust deficit. Driven by external pressure to reduce green- house gas emissions and a strengthening business case for diesel replacement and elec- trification, many mining companies have been making strides towards decarbonisation. With at least some of the renewable energy sources approaching price parity, the cost of taking action is also said to be decreasing. While the costs of transitioning must also be taken into account, operationally it is now much cheaper to replace fossil fuels with renewables and, in many cases, attain significant economic benefits. Anglo American Platinum, for instance, recently announced that it had selected a preferred sup- plier to build a 100 MW solar photovoltaic (PV) plant at its Mogalakwena mine in Limpopo Province, South Africa. As part of its overall renewable energy strategy, Exxaro Resources Limited, through its wholly- owned renewable energy subsidiary, Cennergi, is developing the 70 MW Lephalale Solar Project that

COMMENT

Munesu Shoko

Editor: Munesu Shoko e-mail: mining@crown.co.za Features Writer: Mark Botha e-mail: markb@crown.co.za Advertising Manager: Bennie Venter e-mail: benniev@crown.co.za Design & Layout: Darryl James

Publisher: Karen Grant Deputy Publisher: Wilhelm du Plessis Circulation: Brenda Grossmann Published monthly by: Crown Publications (Pty) Ltd P O Box 140, Bedfordview, 2008 Tel: (+27 11) 622-4770 Fax: (+27 11) 615-6108 e-mail: mining@crown.co.za www.modernminingmagazine.co.za

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Average circulation July-September 2021: 10 696

2  MODERN MINING  December 2021