The mining industry in South Africa stands at a crucial crossroad as it faces the dual challenges of escalating climate change and the imperative for sustainable development. As a pivotal enabler of clean energy technologies, the sector is tasked with strategically navigating its complex journey towards achieving Net Zero emissions.
Servaas Kranhold, Head of Natural resources at BDO, says, “The transition to renewable energy is driving unprecedented demand for critical minerals. The International Energy Agency projects that the requirements for minerals essential to clean energy technologies, such as copper, nickel, lithium, and rare earth elements, will grow exponentially.” He adds, “By 2030, demand for these minerals is expected to nearly triple, presenting both significant opportunities and substantial operational challenges for the mining sector.”
Kranhold notes that technological innovation has become central to advancing sustainable mining. “The integration of autonomous systems, machine learning, and predictive analytics is revolutionising the mining landscape by optimising resource extraction processes, minimising environmental impacts, and enhancing safety and efficiency. Moreover, these technologies play a crucial role in reducing carbon emissions through intelligent monitoring and management systems.”
True sustainable mining extends beyond mere environmental management, requiring a holistic approach that includes:
- Environmental stewardship: Implementing practices that reduce the ecological footprint of mining activities.
- Socio-economic development: Contributing positively to the economic welfare of mining communities.
- Transparent governance: Ensuring that operations are conducted in a manner that is open and accountable.
- Community engagement and empowerment: Actively involving local communities in decision-making processes and ensuring they benefit from mining activities.
According to Kranhold, many South African mining companies are beginning to adopt decarbonisation strategies, often driven by global market trends, investor pressure, and national policy incentives. However, “the transition remains slow due to challenges such as the high costs of renewable energy adoption, infrastructural deficits, and the need for regulatory clarity.” Successful examples include some companies transitioning to solar and wind power for operations. Yet, setbacks often involve difficulties scaling these technologies and managing the energy supply shortfalls in the country, which underline the complexities of transitioning in resource-intensive industries.
Uncertainty in economic and development trajectories is expected to create volatility within commodities markets. Commodities aligned with the just energy transition, such as critical minerals, will remain a focus for investors. However, factors like labour practices, ethical business conduct, and biodiversity risks will increasingly differentiate companies capable of attracting green financing. ESG performance-related loans are likely to become more prominent to redirect capital towards more sustainable business practices.
To maintain its trajectory towards sustainability, Kranhold notes that the mining industry must tackle several challenges:
- Balancing mineral demand with environmental conservation: Ensuring that the increased extraction required for renewable technologies does not come at the expense of ecological health.
- Developing skills and workforce capabilities: Preparing the workforce for the high-tech, sustainable mining industry of the future.
- Implementing robust governance mechanisms: Adhering to stringent standards that regulate environmental and social impacts.
- Aligning with global sustainability standards: Keeping pace with evolving international norms and expectations.
He offers the following recommendations for mining companies to successfully manage their transition to Net Zero, they should:
- Embrace circular economy principles: Reducing waste through recycling and reuse of minerals.
- Invest in low-carbon technologies: Prioritising innovations that decrease overall carbon footprints.
- Forge strategic stakeholder partnerships: Collaborating with governments, communities, and other sectors to align efforts towards common sustainability goals.
- Continuously innovate and adapt technologically: Staying ahead in the application of technology that can further reduce environmental impacts.
“The path to Net Zero for the mining industry requires a strategic vision that includes technological innovation and a comprehensive approach to sustainability. By following these principles, the sector can support global decarbonisation efforts, improve its operations, and maintain economic health. This proactive approach allows mining to contribute positively to a sustainable future and set a leading example in the fight against climate change,” concludes Kranhold.
