Coal mines having to make do in a hostile financing environment
Institutions are increasingly reluctant to fund fossil fuel developments
COAL MINES requiring finance for capital projects face a “hostile environment” from banks and even multilateral development finance institutions because of the environmental constraints these organisations have begun to impose on the financing of fossil fuels.
This was according to Nikisi Lesufi, Minerals Council SA senior executive: environment, health and legacies, who said at the Mining Indaba in Cape Town yesterday that the council was trying to engage with the banking sector on this issue – the council has members that view climate change as an existential crisis while its other members see it as an opportunity.
He said that while the banks might not wish to finance new coal mining projects, the council was trying to get banks to consider financing projects at coal mines that would aid the mines to move towards a just energy carbon free energy transition and to finance the diversification of energy sources at the mines.
Lesufi said that events in Europe, where European countries were scrambling for coal stocks for power stations in the wake of an energy crisis precipitated by the Russian invasion of Ukraine, showed that there was an acknowledgement that climate change initiatives should not lead to economic suicide.
He said coals mines employed 45 percent of the total employment in the mining sector in South Africa and accounted for 60 percent of the gross domestic product of the sector, and he anticipated that coal would form part, if a much lower proportion, of South Africa’s energy mix, even after 2050, a year in which many countries were targeting a net zero emission approach.
Meanwhile, Gold Fields SA executive vice-president Martin Preece said they aimed to be a net zero carbon emitter by 2050 and the group was the first mining group to establish solar operations in South Africa.
He said the aim was to eventually be able to produce up to 16 megawatts of power to reduce the group’s reliance on electricity from the national grid, which currently accounted for 93 percent of the group’s carbon emission impact.
He said their solar power operations were currently producing power at only 8.5 percent of the price of power from the grid.
Preece said they would introduce their first electric vehicles on their mines later this year, and many forms of renewable energy were being investigated as part of their climate change initiatives, including hydrogen and wind power.
“We believe this is a value add to our operations rather than a cost burden,” he said. Preece said Gold Fields had obtained its renewable energy generation licence from the Nersa in six months, which was a short period compared to some of the other groups that had tried to obtain a licence.
“Understand what they want and take them on the journey with you.”