Modern Mining May 2020

EXPERT VIEW

Mines can’t ignore the carbon tax, but can take control of it

According to Air Quality Expert at the European Environment Agency, Alberto Gonzalez Ortiz, the world has seen a dramatic drop in pollution due to the COVID-19 pandemic. But this is mainly due to the reduction in nitrogen dioxide emitted by road traffic in cities. By Francois du Plessis, operations director at EDS Systems.

Index to advertisers AEL Mining IBC Allied Crane Hire 37 Bell Equipment 3 Bosch Diesel 7 Brelko 41 ELB Equipment 39 Flexicon 11 With Phase 2 around the corner, mines are having to ensure that the entire organ- isation understands the Carbon Tax Act, in addition to the impact carbon emissions have on the environment, to assist in cap- turing accurate information in preparation of their deadline. They also have to prepare for the Act’s impact in a cost-effective and sustainable manner. If we consider that asbestos was once a common building material but now attracts massive penalties, carbon emissions are M ines in South Africa, however, have been allowed to restart operations from 20 April 2020 during the lockdown period and as a result, continue to emit greenhouse gases (GHG). Mining is one industry that needs to gear itself for phase 2 of South Africa’s Carbon Tax Act which will commence in mid-2022. Fortunately, this provides the industry with the time needed to prepare and gain con- trol over its GHG emissions. Why prepare now? Adhering to the Carbon Tax Act and contin- ually working towards reducing emissions is no simple task and this challenge has reached the doorstep of primary emitters as Phase 1 tax returns were due by June 2020, although this deadline has been pushed by three months. However, they will still need to provide the reports for the time period stipulated in Phase 1.

following the same route. It’s a growing risk and tax liability that every organisation must get ahead of. The benefits of the tax might not seem very obvious at the moment, but those will develop over time as we pay it forward to the future. It’s not all doom and gloom The mining industry also needs to consider that the Carbon Tax Act was steadily intro- duced by the South African government and that they have been reasonable about their scope. There are free allocations that don’t attract a tax. But if mining operations don’t know their carbon emission levels, they can’t look for those advantages or reduce liabilities. Nor can they capitalise on any long-term opportunities stemming from the act. Awareness of carbon emissions can also improve efficiency and productivity. These organisations also need to bear in mind that poorly calculated tax will cost more and provide a poor picture of guid- ance for mitigation and modernisation. In addition, mines need to be aware of their carbon footprint, as this will assist in lowering tax once emissions have been calculated. Not all tax tools are equal There are a few Carbon Tax tools in the market currently that can calculate carbon emissions. However, organisations should ensure these tools incorporate the South

African Carbon Tax Act’s parameters into consideration along with additional func- tionality that adds value such as also being able to establish a company’s carbon footprint. Importantly, the tool should simplify car- bon monitoring and tax calculations, be aligned with the South African Carbon Tax framework with local thresholds and be able to report, analyse and benchmark against these thresholds. This underpins the ability for the tool to calculate the exact figure – in rands – that is liable at the end of each reporting period, simplifying a traditionally onerous exercise. Moreover, it needs to leverage modern digital technologies to create accessibility, better management of the tax’s metrics, and engagement with the different levels of a business. As the world becomes more aware of the impact mines have on the environment, lowering their carbon footprint becomes even more pertinent. Fortunately, there are tools that enable mining houses to take tax carbon tax by its horns by reducing com- plexity and adding value to the business and the environment. 

FLSmidth

43

thyssenkrupp

31 22

ifm (APJ Automation)

6

Transcor Truck Hire

Invincible Valves

OBC

UMS Group

OFC

Kwatani Maptek

38 40 35 19

Vega

34 23

Weba Chute Systems

MMD Mineral Sizing

Weir Minerals

IFC

Mynbou / Belaz

Wirtgen

42

44  MODERN MINING  May 2020