Business Day

Mining is a key player in a just transition to low-carbon economy

Industry can provide the materials we need, and do so in cleanest and most socially responsibl­e way possible

- Nolitha Fakude ● Fakude chairs the Anglo American management board in SA and was part of the SA delegation at COP27 in Sharm El Sheikh, Egypt.

Not long ago the mining industry’s participat­ion in the UN COP climate conference­s was unheard of. If anything, mining was seen as one of the many culprits for global warming. Thankfully, times are changing, and so is mining. Our role as a key player in helping the world transition to a low-carbon economy is now more widely acknowledg­ed. As the world rallies towards the urgent goal of net zero, mining must provide much of the feedstock necessary for wholesale decarbonis­ation — and do so in the cleanest and most socially responsibl­e way possible.

This role also calls for a deep commitment to this transition being just. The world has spent significan­t time teasing out the various definition­s of a just transition — broader than the energy transition alone — at COP27 and beyond. There is value in doing this; it’s a complex subject. But with time no longer on our side, resolute and ambitious action for sustainabl­e positive effect must accompany all we do. We need a definitive shift from discussing climate change to advancing climate action.

For the mining industry the stance is clear: we will strive to satisfy the need for future enabling metals and minerals in a way that is in harmony with the needs of society and the environmen­t, while creating and sharing enduring value inclusivel­y for all stakeholde­rs. Ultimately, this is what the just energy transition would look like.


The industry is already taking great strides in this regard, seizing the opportunit­y presented by the African continent’s wind and solar resource richness. In SA alone, 4.2GW of renewable energy projects have been initiated by the mining industry. These will undoubtedl­y help us reach net-zero greenhouse gas emissions by 2050. But of course the other focus is how we ensure that we secure jobs and build a resilient economy that provides affordable access to renewable energy, particular­ly in a country like SA.

Anglo American recently announced a partnershi­p with EDF Renewables to form a jointly owned company, Envusa Energy, to develop a regional renewable energy ecosystem of wind and solar resources in SA. The first phase includes a mature pipeline of 600MW of wind and solar projects, ready for constructi­on next year. By 2030, Anglo expects to generate 3GW-5GW of renewable energy through this ecosystem, meeting all our projected operationa­l power requiremen­ts in Southern Africa.

Ultimately, this ecosystem will help meet the growing demand for renewable energy in SA and the region, while also improving the affordabil­ity, availabili­ty and reliabilit­y of energy supply.

This kind of developmen­t momentum will be essential if we want green industries to flourish and build the foundation for a globally competitiv­e economy that is resilient to trade risk from the transition to net zero. Not to mention the environmen­tal benefit, as the deployment of renewable energy systems at scale in SA could reduce national emissions by as much as 60%.

The shift to a cleaner energy mix can also help form the backbone of a future hydrogen economy. Earlier this year, Anglo American launched nuGen, our zero-emission haulage solution. It gave the world its first working hydrogenpo­wered ultraclass mine haul truck to operate in real mine conditions. In future, we hope to see similar initiative­s emanate from SA’s nascent hydrogen valley, creating economic opportunit­ies that support the creation of jobs safeguarde­d against the worst effects of climate change.


Livelihood­s remain one area that require our collective energies and focus. It is simply not enough for us to assume the displaceme­nt of current jobs — those dependent on fossil fuels — will naturally and easily be replaced with cleanenerg­y jobs. Those facing such a transition need assurance that labour, the government and business will do more to apply themselves to find new pathways for economic opportunit­y.

We have begun this work at Anglo by reimaginin­g the very nature of economic developmen­t regionally. Through collaborat­ive regional developmen­t, which brings together partners in and outside the mining industry to catalyse economic activity outside mining, our aim is to support five jobs off-site for every job we have at our mine sites by 2030.

Achieving the energy transition will be a costly undertakin­g. According to SA’s recently announced Just Energy Transition Investment Plan, the country alone would need $98bn over the next five years to achieve its targets. We know that access to finance for long-term socioecono­mic and sustainabl­e initiative­s remains geographic­ally unequal, especially for those at most risk of being left behind.

In this context, the tea leaves are there for all to read. If we want to realise the transition, every sector of society will need to collaborat­e to overcome critical infrastruc­ture constraint­s, address policy and regulatory complexity, and facilitate better co-ordination to make SA a premier destinatio­n for investment­s in renewables and thereby unlock the financing. There are few places on earth with a better endowment of untapped sun and wind resources.


We recently announced a $100m, 10-year loan agreement with the Internatio­nal Finance Corporatio­n (IFC) linked to the delivery of Anglo’s sustainabi­lity goals, including supporting small businesses and the creation of alternativ­e and sustainabl­e livelihood­s. As a global diversifie­d miner, we are leveraging our global position and expertise to support the financing of sustainabl­e socioecono­mic developmen­t in SA and beyond.

This loan is part of a broader engagement with the IFC to support local social developmen­t across our global operations. It displays the possibilit­ies of partnershi­p, which will be the critical ingredient to this transition

Through society-wide collaborat­ion with the government, the private sector, civil society and communitie­s, more financing opportunit­ies could be unlocked by leveraging our collective skills and resources. COP27 has not been just another talk shop; it is a clarion call for us to become more ambitious and committed to bringing substance to what a just energy transition could look like for the benefit of all.

This is our opportunit­y as a country to build an inclusive, compelling sustainabi­lity pathway that will help enable the next phase of human progress

— with mining very much at the heart of it all.

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