If the South African mining sector drives decarbonisation along the value chain and adapts to the global shift in mining commodity value pools, African Rainbow Minerals (ARM) CEO Michael Schmidt says, it can remain internationally competitive and promote socioeconomic development in South Africa by enabling green opportunities across sectors.

ARM is a diversified mining and minerals company with long-life, low unit cost operations within the iron-ore, manganese ore, platinum-group metals, nickel and thermal coal commodities.

ARM also produces manganese alloys and has an investment in gold through its shareholding in gold miner Harmony.

Speaking on the occasion of the miner’s one-year operation anniversary of Rainbow Mining Support, in Westonaria, in Gauteng, on November 4, Schmidt stressed the importance of South Africa needing to decarbonise its economy in the next three decades and to transform it into a low-carbon, climate-resilient and innovative economy.

He noted that this transition would also need to take place in a manner that was “just and that simultaneously addresses inequality, poverty and unemployment to ensure that no one is left behind, and that our future economy is also socially resilient and inclusive”.

However, South Africa’s mining sector will still have key challenges to respond to as more countries and companies set ambitious decarbonisation targets, Schmidt warned, adding that as a significant shift in commodity value pools begins to materialise, it will “have a significant business impact for South African mining players”.

Clean energy technologies, in the meantime, will become major drivers of new demand for mining commodities, the rapid deployment of which implies “a significant increase in demand for selected minerals”.

Taking this into account, Schmidt reiterated ARM’s commitment to be a net-zero Scope 1 and 2 greenhouse-gas emissions miner by 2050.

This, he explained, formed part of the company’s drive to reduce the country’s dependency on coal and oil, even though Schmidt projected that coal was “still going to be around for a long time”.

Considering that global warming is now a stark reality the world faces, Schmidt commented on the world’s call that pre-industrial global warming percentages need to be maintained at about 1.5 °C - which requires that certain global targets be put in place.

However, this means that South Africa, which Schmidt cautiously referred to as “one of the biggest per capita polluters in the world today”, will need to do “far more than the average” owing to its over-dependency on coal.

To this effect, Schmidt referenced the recent R131-billion concessional climate pledge for South Africa’s low-carbon transition – a move which sees the governments of South Africa, France, Germany, the UK and the US, partnering to mobilise $8.5-billion (or R131-billion) over the next three to five years through a range of instruments to support the implementation of South Africa’s revised Nationally Determined Contributions through a just transition to a low-carbon and climate-resilient economy.

The political declaration, announced on November 2, represents a first-of-its-kind partnership to turn these commitments into reality and a model for similar forms of collaboration globally.

This partnership, Schmidt said, would assist the country in reducing its dependency on coal, while simultaneously implementing a social compact that would address South Africa’s trifecta of issues – unemployment, poverty and inequality.

This commitment for the country needs to spill over into its mining industry, he added, as he implored long-life industries to “think 10 to 20 years into the future” and focus on being a sector of decarbonisation throughout its value chain.

This move would also need to promote socioeconomic development within the industry, while enabling a green industry and green technology.

“If there’s enough thinking and provision, there’s a lot of low-hanging fruit and opportunity,” Schmidt said.