The growing emphasis on environmental, social, and corporate governance (ESG) and the global focus on a just energy transition are putting pressure on the mining sector. According to Professor Michael Solomon, chairperson of the Southern African Institute of Mining and Metallurgy’s ESG and Sustainability Committee, these pressures are both internal and external.
At the Sanlam ESG Conference, Solomon highlighted that mining companies face demands from investors and external stakeholders while also needing a social license to operate. He noted that South African mining companies aim to comply with the Paris Agreement’s requirements. However, challenges such as high power costs are pushing a shift towards renewable energy.
Solomon stressed the importance of proper mine closure strategies, warning that inadequate closures could cause further environmental damage and social and economic distress. He also emphasized including communities in the just energy transition, arguing that just energy projects by mines do not always benefit mining communities.
“It’s crucial to enable communities impacted by mining activities to benefit from distributed energy generation post-mine closure,” Solomon said. “This is a problem that we haven’t solved.”
Energy Council of South Africa CEO James Mackay, also on the panel, discussed technology disruption in mining. He noted that clean technology is dominating global investment. Mackay argued that South African companies need to become competitive in this space and resilient as an economy.
“We have to recognize the impact of climate change. Ultimately, a just energy transition will occur around industrialization, which creates more jobs, skills, and manufacturing,” Mackay said. “Businesses need to think quickly, be nimble, and have strong strategies. ESG reporting and stakeholder engagement are crucial.”
Solomon added that while South Africa has reporting policies, the responsibility lies with those operating within the policy to implement its objectives. Mines are committed to ESG and carbon neutrality, but policy implementation and communication need improvement.
The mining sector faces a complex landscape. It must balance the demands of ESG with economic realities and community impacts. With the Paris Agreement setting the stage for environmental responsibility, mining companies are under pressure to transition to greener practices. Renewable energy is becoming more attractive as traditional power costs rise.
However, the transition is not without challenges. High costs and technical hurdles must be overcome. Proper planning and community involvement are critical to ensure a smooth transition and avoid negative consequences. As the mining sector navigates these changes, effective ESG strategies and transparent reporting will be key.
The mining sector is at a crossroads. The pressure to meet ESG standards and transition to renewable energy is mounting. Companies must adapt quickly, implement effective strategies, and engage with stakeholders to succeed in this evolving environment. The future of mining depends on its ability to navigate these challenges and embrace sustainability.
Source: Mining Weekly
