Like the rest of the Anglo American group, iron-ore miner Kumba is developing solar energy generation capacity and is investigating green hydrogen as a renewable energy source for mining activities.
Presenting on the highlights of the company's sustainability report, which follows on the publication, in 2018, of its Sustainable Mining Plan, on November 11, Kumba CEO Themba Mkhwanazi commented that, with he world, and Kumba’s biggest markets specifically, such as China, becoming increasingly environmentally conscious, it calls for higher quality iron-ore and sourcing from sustainable operations.
“In a world of increasing climate change pressure, we need to be cognisant of the importance of sustainability in our mining practices," he stated.
Kumba's Sustainable Mining Plan is aligned with the United Nations' Sustainable Development Goals, as well as the parent company’s “Social Way” strategy, and is built on three pillars − environmental, social and governance.
Kumba has had no fatalities or major environmental incidents in the last four years.
“It should not be remarkable when employees and contractors return home safely. Instead, it should be the norm and that is what we work towards. We aim to be a zero harm, fatality-free company,” says Kumba executive head of safety Philip Fourie.
Meanwhile, the company has an average 84% return rate on capital employed, which enables it to support livelihoods in its host communities.
Mkhwanazi said the company’s Sustainable Mining Plan’s first pillar revolves around a healthy environment, with Kumba recognising that biodiversity, energy and water all lie within the company’s stewardship, while the second pillar involves thriving communities, with better health, education and levels of employment.
Thirdly, Kumba’s sustainability plan encompasses trusted corporate leadership, who strive to provide ethical value chains and remain accountable.
The company’s commitment to sustainability is supported by internal and external engagement forums, including a social, ethics and transformation committee.
Mkhwanazi said five board committees provide oversight on sustainability and material matters.
“Good governance brings ethical leadership, transparency and strong risk management into the business. At Kumba, we recognise that good governance ensures good business.”
Additionally, Kumba executives' long-term incentives map directly to sustainability performance metrics, including total recordable case frequency rate, level three to five environmental incidents, dust control, financial provision provided for rehabilitation and mine closure, attributable free cash flow and attributable return on capital employed.
The Social Way was leveraged this year to develop Kumba’s Covid-19 WeCare community response plan, providing much-needed support for host communities. Kumba had spent R2.4-billion with more than 300 businesses in host communities to positively impact the lives of more than 16 000 people.
In terms of climate change and the company’s role in the transition to a low-carbon world, Kumba is targeting a 30% reduction in its greenhouse-gas emissions and a 30% improvement in energy intensity, against its 2016 baseline, by 2030.
As it stands, the company’s fossil fuel use accounts for 82% of its total energy consumption and the company paid R11.5-million of carbon tax in 2019.
The company has also revised its water strategy to target a more than 14% reduction in water use by 2025, while water efficiency projects are already being implemented.
Meanwhile, Mkhwanazi said that, in the short term, Kumba aims to enhance its margin by ensuring that its assets operate at full potential, while its medium-term goal is to extend the lives of its assets to 2040.
The company’s long-term goals include expanding its iron-ore business in the Northern Cape.
“To successfully deliver on our purpose to re-imagine mining to improve people's lives, we need to change the way we mine. We need to earn our social licence to innovate. Our FutureSmart Mining approach which includes our Sustainable Mining Plan, is focused on technology, digitisation and sustainability working to ensure safer, more efficient and precise mining with an optimised footprint.
“We are continually improving our business model using new technology and strategies that create a safer, greener and sustainably profitable business. This provides more control over our destiny such that we can meet all of our sustainability commitments and create value for all of our stakeholders,” explains Mkhwanazi.