Environmental, social and corporate governance is central to diversified miner Sibanye-Stillwater’s strategy, and guides the company in how it operates and generates shared value for its stakeholders.
Core to this strategy is building “climate-change-resilient businesses”, states Sibanye-Stillwater energy and decarbonisation manager Jevon Martin.
“This includes growing our green metals portfolio by adding lithium, nickel and other metals required for the batteries of the future to our existing leading platinum-group metals (PGMs) global production. This will be complemented by further exposure to the circular economy through developing our existing automotive catalytic PGMs recycling business, in the US, and our tailings retreatment strategic partner, DRDGold, and, more recently, investment in mining and tailings company New Century in Australia,” explains Martin.
He adds that the company is looking to build operational resilience to mitigate the effects of climate change and changing weather patterns.
Martin stresses that the company has committed to achieving carbon neutrality by 2040 and has set out a group energy and decarbonisation strategy that will enable it to achieve this goal using five pillars.
The first pillar comprises active energy and decarbonisation advocacy.
Sibanye-Stillwater advocates for the reduction of carbon emissions and creates an enabling environment for decarbonisation across the jurisdictions within which it operates.
The company advocates for policies that will allow for decarbonisation. In South Africa, where 97% of the company emissions stems from, this would be implemented by the South African government, local regulator the National Energy Regulator of South Africa and State-owned power utility Eskom.
The company has meaningfully contributed through voluntary association bodies such as the Energy Intensive Users Group and Minerals Council South Africa, and has helped to change energy policies and enabled, for example, the implementation of private power generation.
The second pillar is concerned with demand-based energy management.
“We have a strategy to actively reduce our energy consumption through energy efficiency interventions, and we’ve been successful in this regard. We achieved a reduction of 165 000 t of carbon dioxide (CO2) emissions through our efforts last year.”
The third pillar embodies strategic energy sourcing, with initial focus on the company’s South African operations.
Martin notes that 88% of the company’s operational emissions stem from the electricity provided by Eskom, as the power utility still sources the majority of its power from coal.
To decarbonise its operations, Sibanye-Stillwater is executing a portfolio of renewable-energy wind and solar energy projects, with a cumulative capacity of 485 MW.
“The 225 MW of solar projects at our South African gold and PGM operations will directly interconnect into these operations and provide energy during the day. We’re also actively pursuing up to 250 MW of remote indirect wind energy through local independent power producers (IPPs) that would develop the projects on our behalf and sell the electricity to us through power purchase agreements (PPAs).
“We’d then rely on Eskom to wheel that power to our operations, effectively requiring a financial reconciliation on our energy bills.”
These renewable-energy projects will enable the company to reduce its Scope 2 emissions by 25% by 2025.
The fourth pillar involves leveraging technology, as Sibanye-Stillwater spends extensive time and resources exploring decarbonisation-enabling technologies.
These technologies range from digital solutions, such as digital twins of the company’s energy intensive operations, to energy storage, which the company regards as a key component in enabling higher renewable-energy penetration.
Sibanye-Stillwater is running a prefeasibility study on underground pumped water at one of its local gold operations, in addition to exploring green hydrogen technology, which it envisions “will play a meaningful role in addressing our hard-to-abate emissions stemming from diesel consumption”.
The fifth pillar focuses on Scope 3 emissions and carbon offsets.
“We need to take accountability for those emissions that occur upstream and downstream of operations. We’re engaging with various stakeholders and seeking a proactive way of reducing these emissions – our Scope 3 emissions. We’re developing carbon offset opportunities to also neutralise the remnant emissions as part of our carbon neutral journey.”
Power Purchase Agreements
The majority of Sibanye-Stillwater’s emissions come from its South African operations, and the country is a highly regulated environment with a monopoly electricity supplier in Eskom, says Martin. This presents challenges in executing renewable-energy projects, which, consequently, take a “long time” to plan and execute.
“We’ve tried to seek the best IPPs to help us execute these projects, which create value in terms of enabling decarbonisation, generating cost savings and offsetting potential carbon tax liabilities. They also integrate in terms of socioeconomic benefits and are structured in a way that we ensure they benefit the buyer and seller of electricity, and our various stakeholders.”
Further, when developing these renewables projects, Martin explains that Sibanye-Stillwater has opted for a PPA structure where the company would appoint a third-party to build, own and operate, and later transfer, the renewable-energy facilities to Sibanye-Stillwater.
The agreement would be for 15 to 20 years, and the company would buy the electricity generated for the duration of that contact.
It also enables the company to retain its capital for core mining projects and execute its business and corporate strategy.
“We’ve taken control of our own future in developing renewable-energy projects for our own use. We’re also looking to use them to continue our legacy in terms of sustainability and value creation for all our stakeholders, and we want to ensure those projects service the communities in which we operate,” he concludes.