Exxaro CEO Mxolisi Mgojo
Photo by: Creamer Media's Donna Slater
Coal mining company Exxaro Resources, which acknowledges coal’s negative impact on climate in a 20-page publication released recently, expresses the view that a just transition to a low-carbon future should inform global climate action.
“If we don’t take climate change issues very, very seriously, and see them as being part of our responsibility to respond in very effectful and impactful ways, God help us,” Exxaro CEO Mxolisi Mgojo stated at the company’s latest presentation of 2019 results.
The Johannesburg-listed company is one of the largest and foremost black-empowered South Africa-based diversified resources companies, with an asset portfolio that includes coal, renewable energy and an investment in iron-ore.
The company, with coal operations on seven sites, this month acquired the remaining 50% of renewable energy company Cennergi.
Late last month, it implemented a coronavirus crisis management plan and business continuity plan that includes health and safety controls to keep the infection rate at a minimum and deal with risks associated with Covid-19 cases as they arise.
Interestingly, International Energy Agency executive director Dr Fatih Birol argued in a recent commentary that the stimulus plans being developed by governments to counter the economic damage of the Covid-19 pandemic offered an excellent opportunity to ensure that the essential task of building a secure and sustainable energy future did not get lost amid the flurry of immediate priorities.
In the 20-page ‘Exxaro and Climate Change 2020’ publication, the company commits itself forcefully to a world that will see a less than 2 °C increase in global warming by 2100.
“The world is facing many challenges which compel our organisations to operate with the highest level of social and environmental consciousness,” Mgojo states in a foreword comment that recognises that the use of coal to generate electricity contributes to climate change through the emission of greenhouse gases.
“While the share of coal in the global energy mix is expected to decline in the medium to longer term, it is likely to remain dominant in South Africa for the foreseeable future as we transition to low-carbon energy sources.
“Nevertheless, we regard this as a medium to longer-term risk, and it is part of our diversification imperative to explore other climate-resilient opportunities to develop and commercialise new businesses that will add value to society.”
“We are committed to supporting a smooth and just energy transition to the low-carbon economy,” he states.
Exxaro plays an active role in climate- change policy development, working with policymakers directly and through business associations and research institutions.
The company has a strategy of extracting coal value early and disposes of coal assets that do not fit this strategy.
The diversification of the portfolio into renewable energy through Cennergi is part of the company’s effort to build climate-change business resilience.
The consolidation of this renewable-energy asset comes at a crucial time in South Africa and aligns with the company’s response to increasing negative sentiment towards coal-based electricity generation.