Coal industry needs to acknowledge ‘just transition’, says Exxaro CEO-designate

22nd September 2021 By: Simone Liedtke - Writer

Considering the polarising views on the coal industry’s importance, diversified mining and energy company Exxaro Resources CEO-designate Dr Nombasa Tsengwa believes the industry must acknowledge the “just transition” from coal to renewables as both a manner of going green, and a chance for mining companies to identify new opportunities.

“Even though the just transition is necessary, there needs to be a holistic approach that considers the socioeconomic transition. The industry needs to acknowledge that the just transition, and also going green, goes beyond just removing us from our balance sheets, thus reducing the attributable emissions,” Tsengwa said during her keynote address at this year’s Coalsafe virtual seminar on Wednesday.

Tsengwa stressed that “there should be great importance placed on improving the health and safety sector, using technology to operate as responsible as possible”, while also placing environmental, social and good governance at the forefront for health and skills development, as well as energy and water use initiatives.

She urged that the industry needed to be “guided by its vision” and that it should lead by example by investing in resources that “power a clean world”. This approach was about ensuring that the planet, and society, benefitted.

However, while it was imperative to transition to cleaner sources of energy, South Africa would continue to be dependent on coal for electricity, and it would remain in the country’s energy portfolio for the foreseeable future.

“The most recent Integrated Resource Plan anticipates that 46% of our electricity will be generated from coal by 2030. To replace the current energy generation capacity with alternative sources of energy will take some time to implement and will require significant cover, as well as holistic industry leadership,” she noted.

Further, considering that coal production and related industries would require significant capital, as well as holistic industry leadership in terms of driving relevant initiatives, Tsengwa noted that the commitment to jobs, regional economic development and environmental good practice would require “serious attention and serious priority planning”.

“An energy transition of this magnitude requires an understanding of the socioeconomic challenges we are faced with as a nation. We [must therefore] embrace and productise sustainable community development initiatives through our enterprise and community development programmes, as well as the supply chain sustainability policies that support the increased participation of black women and youth, and people with disabilities.”

Exxaro, in this regard, aims to lead economic transformation that will create jobs in its host communities and transform the supply chain.

Examples of such include the miner’s growth aspirations through its enterprise and supplier development programme, through which it has supported 66 entities, 24% of which are wholly black owned and another 26% women owned.

Since the inception of the programme in 2018, about R1.2-billion in business has been created across the supply chain. It has also generated between 1 100 and 1 200 additional jobs, “demonstrating that supporting respecting provisional economies, needs to go beyond compliance obligations, and can be effectively achieved through public-private partnerships for greater impact”, Tsengwa commented.

With that in mind, she urged mining companies to create a flexible environment which fostered collaboration and was focused on sustainability and the community.