Metals Focus, a leading precious metals consultancy, has annoouonced the publication of its PGM ESG Focus 2024 report. This offers readers comprehensive comparisons of key Environmental, Social, and Governance (ESG) metrics across five major PGM miners, from which production accounts for over 85% of global supply. The report aims to provide a better understanding of these companies from an ESG perspective, alongside overall ESG trends in the PGM mining industry.
PGM producers covered in the report: Anglo American Platinum, Impala Platinum, Norilsk Nickel, Northam Platinum and Sibanye-Stillwater.
Highlights of the PGM ESG Focus report include:
Combined Scope 1 and 2 Greenhouse Gas (GHG) Emissions from PGM Mining Companies in this Report Remained Flat Year-on-Year (“y/y”) in 2023.
In 2023, combined scope 1 and 2 GHG emissions from the five PGM mining companies in this report remained unchanged y/y at 22,818 kilotonnes (“kt”) of CO2e. Amplats recorded the largest increase, up 5% y/y to 4,290 ktCO2e, attributed to energy inefficiencies caused by unreliable power supply from Eskom. Reductions in emissions at Nornickel, Sibanye-Stillwater, and Implats offset this increase, with changes largely driven by shifts in energy consumption patterns.
Water Withdrawals Fell by 9% y/y to 409 Gigalitres (GL) in 2023
Water is vital for PGM extraction and beneficiation processes, making effective water management critical to operations. Water withdrawals by the companies in this report fell 9% y/y to 409 GL, with 312 GL derived from natural sources. Nornickel recorded the largest withdrawals at 315 GL, though this was reduced by 11% y/y through conservation measures.
Total water consumption fell by 6% y/y to 280 GL, representing 74% of total water withdrawals. Sibanye-Stillwater achieved the highest water recycling rate at 61%, supported by closed-loop systems and targeted initiatives, highlighting the industry’s continued focus on water conservation.
Payments to Governments Dropped 30% y/y to $5.3 Billion, Impacted by Lower Basket Prices
Contributions to governments, comprising of taxes, royalties, and other payments, dropped significantly in 2023 due to weaker basket prices. Payments to governments by the companies in this report fell by 30% y/y to $5.3 billion, with Amplats and Implats reporting payments below $1 billion for the first time since 2020.
Local procurement spending also fell, by 1% y/y, to $5.5 billion, largely driven by lower spending by Amplats and Nornickel. Implats boosted its procurement spending by 2% y/y to $1.5 billion, driven by expansion projects at Zimplats. Community development expenditure dropped by 35% y/y to $348 million, with Nornickel’s expenditure halved year-on-year, to $205 million, overshadowing the increased spending by all the South African PGM producers.
Female Representation in the Workforce Reached 21% in 2023
Female participation in the PGM workforce continued to grow, with an average representation of 21% reported in 2023. Notably, all companies achieved board-level female representation exceeding 20% for the first time since 2020, reflecting progress in fostering diversity and inclusion. Implats’ female board representation rose from 47% to 54% in 2023, but Amplats experienced a reduction, bringing its representation down to 25%.
Extracts from the report:
Multiple ESG indices have been developed for investor benchmarking, but distilling ESG into a single metric oversimplifies its complexity, especially in mining. This report thus covers a broader array of ESG metrics, though Metals Focus notes a direct comparison between Nornickel and other PGM producers is difficult given Nornickel’s focus on base metals. Instead, this report examines how ESG strategies are evolving across the industry and within individual companies, rather than drawing comparisons among miners. Traditional financial tools, like net present value and return on investment, are generally unsuitable for assessing ESG strategies. Alongside evolving stakeholder demands and regulatory pressures, this creates substantial challenges for PGM miners.
As the industry contends with lower PGM prices and tighter margins, cost-cutting efforts could jeopardise the survival of some operations. Enhancing ESG standards often requires additional investment, which may be questioned under current economic pressures. PGM supply is becoming more competitive, with recycled PGMs anticipated to grow their supply share as vehicles with higher PGM loadings are increasingly decommissioned. Growing focus on the circular economy bolstered by EU regulations, could see the origin and environmental impact of PGMs becoming a more significant consideration for consumers, emphasising the need for strong ESG practices.
Sarah Tomlinson, Director of Mine Supply at Metals Focus, commented:
“We are delighted to publish this year's PGM ESG Focus report, and I would like to thank my colleagues at Metals Focus for their continued hard work in pulling this report together.
“This year, we observed stability in the industry's environmental performance, with combined scope 1 and 2 GHG emissions remaining flat year-on-year. While this reflects progress in managing emissions, companies must continue to innovate, particularly as they address challenges with power supply and energy efficiency.
“We are also pleased to see significant advances in water conservation, with withdrawals and consumption both falling by 9% and 6% respectively, demonstrating the success of recycling initiatives and conservation measures.
“The financial contributions of the companies have faced pressure this year due to declining basket prices. However, companies remain committed to supporting host communities through education, health, and infrastructure initiatives. Local procurement, which decreased slightly by 1%, continues to be a critical driver of economic support.
“On diversity, it is encouraging to see the PGM sector making notable improvements in representation of females in the workforce and at board-level. The growth in female participation highlights the industry's commitment to breaking traditional barriers and embracing a more balanced and forward-looking approach to workforce development, even in a challenging economic environment.
“We are optimistic about the future of the PGM mining industry as it seeks to strengthen its environmental and social contributions. While challenges remain, the industry’s continued focus on its ESG credentials offers a pathway to a more resilient and impactful future.”