Modern Mining July 2024

corporate power purchase agreement – that recently started supplying electricity to the South African operations of mining company Tronox. With CIB as the joint lead mandate arranger, two 100-megawatt (MW) solar farms in Lichtenburg, North West, are producing electricity for Tronox operations in KwaZulu-Natal and the Western Cape. The two solar farms are expected to

proceeds of a green loan can be used to procure and install a wind or solar farm to power a mine’s operations. The second option is a sustainability-linked financing structure that incentivises achievement of ambitious, predefined performance targets. These are based on material key performance indicators that are measured

on milestone dates. Sustainability-linked structures do not have any limitations in terms of the use of proceeds, and the key performance indicators will be driven by the key ESG risk factors of the particular mining operation, aligned with its sustainability strategy. Finally, there is transition financing, a type of sustainable finance solution created for hard-to abate industries such as mining. It is an option to help mining companies attract financing where they would otherwise not typically fit into traditional green or sustainability-linked structures. It is used to support projects and initiatives that will deliver a long-term strategic reduction in GHG emissions. The Tronox transaction

generate about 580 gigawatt-hours (GWh) of electricity per year, equivalent to the annual consumption of more than 40 000 households. Tronox, a New York Stock Exchange-listed world leader in the mining, production and marketing of inorganic minerals and chemicals, expects the project to reduce its global Scope 1 and Scope 2 carbon emissions by about 13% when compared with its 2019 baseline. The company’s energy-intensive

The first is the energy-intensive industry’s sizeable carbon footprint: mining accounts for between 4% and 7% of global greenhouse gases (GHGs).

operations – which include mines in Mtunzini on the KZN coast and Brand-se-Baai on the Namaqualand coast, concentration plants, and smelters in Empangeni and Saldanha Bay – are expected to draw 40% of their electricity from the solar PV project. The projects’ total investment is close to R4 billion, with debt financing at about R3 billion. CIB committed roughly R827 million to the debt for these two solar PV projects, handling the associated interest rate hedges. CIB’s involvement showcases its leadership in financing renewable energy projects across Africa, reinforcing its position as one of the leading banks in energy finance. In these deals and many others, mining companies have relied on the experience, mining knowledge and seasoned sustainability credentials of Nedbank CIB. 

With its proven track record underpinned by deep sector-specific expertise and experience, Nedbank Corporate and Investment Banking (CIB) has established itself as a leading provider of sustainable financing solutions to the mining and metals industry. A recent transaction illustrating the impact of sustainable financing involves a R4 billion solar PV installation – one of South Africa’s largest solar projects constructed under a

Mining companies are leading the charge towards renewable energy.

JULY 2024 | www.modernminingmagazine.co.za  MODERN MINING  31