Miners need to invest in renewables to fight global warming

By Leon Louw, founder and editor of WhyAfrica 

25 August 2021 – Mining companies should be at the forefront in the battle against climate change. As part of its offensive, miners need to invest in renewables to fight global warming.   

The recently released climate report by the United Nations (U.N.) special climate panel paints a grim future for the planet. In the report, scientist of the Intergovernmental Panel on Climate Change (IPCC) says that humans are “unequivocally” to blame for global warming, and that the world is certain to face further climate disruptions for decades, if not centuries to come.

Although immediate action to cut greenhouse gas emissions could limit the impacts, others are locked in, the report states.

In response to the release of the report U.N. Secretary-General António Guterres said the “alarm bells are deafening.”

“The solutions are clear.  Inclusive and green economies, prosperity, cleaner air, and better health are possible for all if we respond to this crisis with solidarity and courage,” said Guterres.

We need action on energy

We need immediate action on energy.  Without deep carbon pollution cuts now, the 1.5°C goal will fall quickly out of reach.  This report must sound a death knell for coal and fossil fuels, before they destroy our planet.

“There must be no new coal plants built after 2021.  OECD [Organisation for Economic Co-operation and Development] countries must phase out existing coal by 2030, with all others following suit by 2040.  Countries should also end all new fossil fuel exploration and production, and shift fossil-fuel subsidies into renewable energy.

“By 2030, solar and wind capacity should quadruple and renewable energy investments should triple to maintain a net-zero trajectory by mid-century,” said Guterres.

Higher standards for environmental performance

The report is an eye opener and a reality check for mining companies still building their business models around a reliance on fossil fuels as energy source. International pressure will continue to intensify if they do not change and join the green movement. In fact, it will become almost impossible to get any sort of funding if a mining company cannot prove that it does its part for global warming.

TSX- and LSE-listed gold miner Centamin CEO Martin Hogan recently stated in a media interview that investors were applying higher standards to environmental performance and were therefore demanding cleaner operations.

“With environmental, social and governance (ESG) aspects becoming more and more important, miners will start struggling to access financing for their projects,” he said during a keynote address at the virtual Energy and Mines Africa conference earlier this year.

According to Jane Joughin, Sustainability Consultant at SRK Consulting, ESG is not a fad, it is here to stay. “ESG expectations are already deeply rooted in international sustainable development goals (SDGs), sustainability standards, law and the minds of the next generation of consumers.  Bad practices may result in a change in the term “ESG” but the imperatives driving the need for ESG will not disappear,” says Joughin.

Miners need to invest in renewables to fight global warming

Mining companies that ignore the importance of renewable energy thus runs the risk of being starved of funding and of being accused of not doing their part in the fight against global warming. Although it remains a challenge to set up solar, wind or some form hybrid system in many parts of Africa, it has become much easier than three or four years ago.

Gone are the days when finding a solution to fit your requirements in Africa were like pulling teeth. There are a host of companies from around the world ready to partner and assist mining companies. In fact, the challenge is now to find the most suitable supplier.

Scandinavian renewable power producer Release by Scatec is one of the solutions that mining companies with a footprint in Africa will find interesting.

The company entered into a lease agreement with mining company Torex Gold in Mexico earlier this year. Scatec’s 8.5MW solar plant provides renewable power to the Morelas Media Luna and El Limon Guajes project in the Guerrero Gold belt about 180km southwest of Mexico City. The project is a good case study for any mining company looking to install a hybrid system in Africa. https://releasesolar.com/

The initial contract term is ten years with the possibility of extension and options for buy-out starting after the expiry of year three. The solar plant can at any time be expanded, including adding battery storage to further increase the use of renewable energy. It can also be moved to a new location if needed.

The Release model is designed to provide flexibility both with regards to contract term and capacity, and thus has great potential in mining.

The new plant is expected to reduce Torex’ Scope 2 greenhouse emissions by up to 8.6% using 2019 as the baseline year and is Torex’ first major foray into renewable energy at its operations.

Mining companies should be at the forefront of the battle against global warming and should limit their contribution to emissions as much as possible. Investing in a renewable system is not only the right thing to do, but it makes sense operationally, cutting input costs significantly. If we do not act now, we might be in serious trouble. Miners need to invest in renewables to fight global warming

Guterres said that the evidence is irrefutable:  greenhouse‑gas emissions from fossil-fuel burning and deforestation are choking the planet and putting billions of people at immediate risk.  “Global heating is affecting every region on earth, with many of the changes becoming irreversible,” he said.

Leon Louw is the founder and editor of WhyAfrica. He specialises in natural resources and African affairs.        

WhyAfrica provides you with business intelligence that matters. Africa is our business, and we want it to be yours too. To subscribe to WhyAfrica’s free newsletter or digital magazine, and for more news on Africa, visit the website at www.whyafrica.co.za or send a direct message.

 

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