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ESG key to improving investor sentiment

LOW CARB FUTURE Exxaro aims to transition from a coal-based to a minerals and renewable-energy solutions business that will thrive in a low-carbon future

MATLA MATTERS Through its environmental stewardship, Exxaro has aided the monitoring of the grass-owl population at its Matla coal mine, in Mpumalanga

26th August 2022

By: Tracy Hancock

Creamer Media Contributing Editor


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Working alongside key stakeholders and employing good governance structures, such as sound environmental, social and governance (ESG) practices, is an effective way of improving investor sentiment about the African mining industry, says coal and heavy minerals mining company Exxaro stakeholder affairs executive head Mzila Mthenjane.

Africa remains an attractive jurisdiction, despite the continent’s hosting four of the world’s least attractive mining destinations, he adds.

Zimbabwe, the Democratic Republic of Congo, Mali and South Africa ranked in the ten least attractive jurisdictions in the world for investment when considering policy and mineral potential, indicates independent research organisation Fraser Institute’s Annual Survey of Mining Companies, 2021, published in April this year.

However, Africa’s vast mineral wealth makes it important to invest in the continent’s mining industry and understand the factors that contribute to its growth and socioeconomic impact, says Mthenjane.

The continent holds 30% of the world’s mineral reserves, including 40% of its gold and up to 90% of its chromium and platinum, according to the United Nation’s Environment Programme.

Through events such as the Investing in African Mining Indaba, African mining stakeholders can collaborate to achieve greater goals, such as the green industrial revolution, combating climate change and ensuring a just transition for all to a low carbon future, highlights Mthenjane.

“Attracting and retaining specialised talent in the ESG space enables the continent’s mining companies to have an advantage in sustainably managing current resources and foreseeing the potential of adopting other minerals in Africa’s energy mix. This serves as a contributor to the growth of the African mining industry, which captivates many stakeholders worldwide.”

Exxaro recommends using the management of regulatory compliance to help shape a company’s policies, such as those relating to ESG criteria, which are becoming increasingly integral in investors’ decision-making.

ESG is no longer optional or a point of differentiation, but rather the minimum operating standard, says professional services firm PwC Africa energy, utilities and resources leader Andries Rossouw in a Mining Weekly report published in June.

Maintaining a leading ESG rating is more than an accolade – it is a driving imperative and is why Exxaro has invested in environmental rehabilitation and preservation, as well as skills, business opportunities, safety, health and infrastructure, advances Mthenjane.

Supporting a Sustainable Future

Guided by its purpose to power better lives in Africa and beyond, Exxaro understands that it cannot grow sustainably without deliberately creating a positive impact on the environment and communities it serves, he adds.

“Our programmes are aligned with our goal to be carbon neutral by 2050. From expanding our minerals portfolio to wind farms, solar power, system and process innovations, and renewable energy sources, we know that the power of possibility is all around us.”

Exxaro’s 80 MW Lephalale Solar Project, the first phase of decarbonising its flagship Grootegeluk mine, in Lephalale, Limpopo, was registered by the National Energy Regulator of South Africa and the Regulator Executive Committee last month.

The approval of the generation licence serves as a catalyst for Exxaro’s sustainable growth and impact strategy, presenting an opportunity to accelerate the company’s expansion into renewable energy, which supports its low-carbon transition, advises Mthenjane.

“We remain committed to responsibly enhancing the value of our coal assets while playing an active role in creating a future which enables our vision of resources powering a cleaner world. We aim to transform Exxaro in a systematic and integrated manner into a diversified company that will transition from a coal-based to a minerals and renewable-energy solutions business that will thrive in a low-carbon future.”

Exxaro further intends to stimulate economic development to ensure that communities can sustain themselves beyond the life-of-mine. This involves environmental stewardship towards a just transition by restoring ecosystems through transferring 90% of post-mining land to emerging farmers in local communities by 2026.

Through its environmental stewardship, the company has aided a rhino relocation project in Mozambique, the Mokolo Crocodile River water augmentation scheme; land baboon spider relocation at its Grootegeluk mine and the monitoring of the grass-owl population at its Matla coal mine, in Mpumalanga.

In support of economic development, the company’s enterprise and supplier development (ESD) initiatives provided financial support worth R127.7-million for small businesses in communities surrounding its operations during the 2021 financial year.

“We further provided nonfinancial support through a contractor development programme, in conjunction with the Gordon Institute of Business Science, as well as other institutions, and disbursed R85.8-million to ESD beneficiaries over the period,” says Mthenjane.

Exxaro’s young employees and those in surrounding communities have also been empowered through various initiatives that encourage digital innovation, including a recruitment platform, interactive platforms for engaging the talent pipeline of professionals in training and bursars, and the MyNexxt learning platform to enhance the learning experience.

Additionally, its focus on health and safety has yielded five consecutive fatality-free years as of March this year, while 12 791 employees and 2 452 community members have been vaccinated against Covid-19.

“Overall, upskilling, investing and developing our employees and neighbouring communities contributes towards a just transition in Africa,” he concludes.

Edited by Nadine James
Features Deputy Editor


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