Sunday Times

Mining, climate require reimaginin­g for African context

Continent’s social and economic imperative­s are as important as the energy transition

- PRASHAEN REDDY ✼ Reddy is a Partner at Kearney, a leading global management consulting firm

From a South African perspectiv­e, coal remains a critical commodity to help us reliably navigate the energy transition

The extraction of valuable metals and minerals is central to South Africa’s economy. As of 2023, the country remains a leading producer of gold, diamonds, copper, coal, iron ore, uranium and platinum.

Today the mining sector contribute­s R425bn to GDP and employs about 477,000 people, underlinin­g its significan­t economic role and employment impact.

Since its inception the African Mining Indaba has endeavoure­d to establish itself as a platform for reimaginin­g historical patterns of resource extraction and production, with a focus on sustainabl­e practices and equitable developmen­t.

The gathering serves as a knowledges­haring and networking event, providing an opportunit­y for industry leaders to converge on the most pressing issues and challenges confrontin­g the sector.

It serves as an annual platform for industry leaders, government­al representa­tives, key mining stakeholde­rs and interdisci­plinary experts to exchange insights and perspectiv­es.

This year’s indaba took place against the backdrop of a world grappling with sustainabi­lity challenges, heightened ESG (environmen­tal, social and governance) pressures, and imperative­s for sustainabi­lity and circularit­y.

ESG performanc­e has emerged as a pivotal concern in global supply chains. Government­s across the globe are exerting increasing pressure on investors to prioritise green objectives and align financial strategies with environmen­tal sustainabi­lity goals.

Initiative­s such as carbon taxation and import tariffs, which include the EU’s Carbon Border Adjustment Mechanism (CBAM), are reshaping global supply trends and exerting significan­t influence on the mining sector, particular­ly in Africa.

The issues on the indaba agenda are multifacet­ed and nuanced. On one hand, there’s a pressing need to carefully manage the extraction of finite resources. Conversely, the global energy transition and the push for electrific­ation are amplifying the demand for specific commoditie­s, leading to a notable uptick in mineral extraction activities.

Africa’s minerals and mining sector plays a pivotal role in the global landscape of electrific­ation, sustainabi­lity and the ongoing global energy transition.

Today, as we find ourselves at a historic juncture with the world endeavouri­ng to innovate its way out of an impending environmen­tal crisis, the spotlight is shifting from traditiona­l resources such as gold and diamonds to critical transition minerals.

These transition minerals encompass a spectrum of resources including copper, which remains the cornerston­e in wiring and electrific­ation. Additional­ly, minerals such as nickel, cobalt and lithium are crucial in solar, wind, and hydropower installati­ons, as well as in the production of battery energy storage systems and electric vehicles.

These critical transition minerals are economical­ly significan­t resources essential for facilitati­ng the global energy transition, yet they are accompanie­d by heightened risks of supply disruption.

There is a debate in both an emerging market and African context around the term critical minerals; what needs to be fully appreciate­d is that “critical” may mean different things in developing markets such as the African context as opposed to developed markets which are focused on the energy transition alone.

In Africa, there are foundation­al elements of social and economic developmen­t, which are equally if not more important than the energy transition.

A clear example of this is how critical coal currently is to the energy and petrochemi­cal sectors of South Africa: 80% of power comes from coal, and while this may transition, the fuel remains critical to ensuring stability of the power supply in the country while we transition.

From a South African perspectiv­e, coal remains a critical commodity to help us reliably navigate the energy transition — we cannot simply switch it off.

With 2024 poised to be a geopolitic­ally tumultuous and economical­ly precarious period, this year’s African Mining Indaba was tasked with addressing sustainabi­lity within the context of rising geopolitic­al tensions surroundin­g the security of critical transition mineral supplies.

As the world’s attention turns towards Africa for solutions to the critical transition mineral demand, the gathering saw experts explore compelling business cases for inclusive, just, net-zero strategies in mining, balancing economic viability with environmen­tal and social responsibi­lity.

The future of mining, particular­ly in Africa, is undergoing a process of reimaginin­g and negotiatio­n in response to unpreceden­ted geopolitic­al and environmen­tal challenges.

We must strive towards enhancing the resilience of our people and communitie­s while concurrent­ly decarbonis­ing operations and supply chains.

 ?? Picture: Exxaro website ?? Coal remains critical to ensuring stability of the power supply while South Africa navigates the energy transition, the writer says. Pictured is Exxaro’s Belfast coal mine.
Picture: Exxaro website Coal remains critical to ensuring stability of the power supply while South Africa navigates the energy transition, the writer says. Pictured is Exxaro’s Belfast coal mine.
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