Setting a benchmark for energy performance and carbon management in the mining industry

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Climate change affects every country and does not respect national borders, yet the greenhouse gas emissions driving climate change continue to rise. Global emissions of carbon have increased by almost 50 per cent since 1990 and grew more quickly between 2000 and 2010 than in each of the three previous decades. Climate change can disrupt national economies and affect lives, with the poorest and most vulnerable people being affected the most. All ICMM members implement the 10 principles and related position statements that underpin our Sustainable Development Framework. ICMM’s position statement on climate change commits member companies to being part of the solution.

When the UN’s Sustainable Development Goals (SDGs) officially came into force in January 2016, the nations of the world committed to mobilise efforts to end poverty, fight inequalities and tackle climate change. Business has a significant part to play, alongside governments and civil society, in creating pathways for a greener, safer and sustainable future for us all. Metals and minerals are essential to almost all aspects of everyday life; they enable farming, healthcare, communications, construction, transport and energy and water supply. And they will arguably become more important as they help to deliver the infrastructure required for a low-carbon future. This is one of a series of case studies gathered from our members to highlight how companies are working to enhance their contribution to society and help industry to manage potential adverse impacts their activities may have on the realisation of some of the SDGs.

Faced with rising energy costs and supply constraints across its operations, Gold Fields, one of the largest gold producers in the world, is improving corporate energy performance through an Integrated Energy and Carbon Management Strategy, launched in 2014.

The strategy, which supports Gold Field’s commitment to SDG 12 (Responsible Consumption and Production) and SDG 13 (Climate Action), has driven energy efficiency across the company, reduced greenhouse gas (GHG) emissions, and improved energy security.

The quality of company’s reporting in relation to its energy and carbon reduction efforts has earned it a ‘Level A’ ranking by the CDP (formerly the Carbon Disclosure Project) for the past five years, signifying world leadership in disclosure, awareness, management and action in relation to addressing climate change risks.

Gold mining and energy use  

Gold Fields has emerged as one of the world leaders in utilising low-carbon, sustainable energies at its mining operations.

Gold mining is a highly energy intensive process. The depth at which gold is found requires increased hauling distances, power for cooling and ventilation services, and increased energy use due to declining ore grades.

From 2007 to 2017, energy use rose from 9 per cent of Gold Fields’ total operating costs to around 20 per cent, despite consumption declining by 15 per cent over the same period.  

With the costs of energy continuing to rise globally, one of the fundamental challenges for the mining industry is to ensure affordability and security of energy supply over the life-of-mine.

Mining’s carbon footprint

Mining is also a significant emitter of greenhouse gasses and the ICMM has encouraged companies to work towards mitigating climate change through the adoption of GHG reduction and energy performance policies.

In addition, Gold Fields’ operations in South Africa and Ghana are highly dependent on the national power grids, which has exposed the company to uncertain power supply and frequent disruptions in these countries, as these countries battled to maintain security of supply.

Implementing an integrated energy and carbon management strategy

In light of these challenges, increasing the share of low carbon and renewable energy in its energy mix is now a core sustainability priority for Gold Field’s Board and senior management team.

Gold Fields’ integrated Energy and Carbon Management Strategy sets the framework for the business to ensure energy security, decrease carbon emissions, explore immediate and long-term energy efficiency opportunities, and investigate viable sources of alternative energy.  

Under the Strategy, Gold Fields has implemented a range of initiatives, including:

Commitments to renewable and low-carbon energy

Gold Fields has embarked on a number of projects over the past two years that commit the company to using renewable or low-carbon energy at its operations, for example:

Partnership initiatives

In implementing this Strategy Gold Fields has entered into a number of collaborations and partnerships in order to draw on additional expertise and resources to enhance its energy and climate change mitigation goals. Examples include:

Setting a high standards for energy performance, carbon disclosure and transparency

Gold Fields’ total group energy spend declined from US$361m in 2015 to US$289m in 2016 as a result of its initiatives.

Importantly, average energy spend per ounce of gold produced declined by 6.3 per cent between 2014 and 2016.

In 2016, the company also saved 323TJ of energy while avoiding emissions totalling 56,000t CO₂-e, though overall emissions intensity has increased over the past three years.

In additional to achieving a ‘Level A‘ Climate Score in the CDP 2017, the quality of Gold Fields’ CDP report submissions has also been acknowledged by the company’s inclusion in the Johannesburg Stock Exchange (JSE) Top 100 Climate Disclosure Leadership Index (CDLI) for six or more of the eight years that the CDLI has been in place.

In 2016, Gold Fields CEO Nick Holland was honoured as “Energy Visionary of the Year” at the Energy and Mines World Congress in Toronto for the company’s efforts to reduce intensity and emissions.

The next steps for Gold Fields’ Energy and Carbon Management Strategy

According to Dr Tsakani Mthombeni, Group Head of Carbon and Energy, the company’s strategy is ever-evolving, taking into consideration the latest technological, operational and regulatory developments.

Central to the successful implementation of its integrated energy and carbon management strategy has been a strong and consistent executive leadership and Board commitment, which drives investment into the right areas. This encourages a strategic and systematic approach to energy management.

Some of the areas that Gold Fields is focusing on improving in the near future are: (1) implementation of energy management systems, (2) fully integrating energy management into business processes, including strategic energy planning, while (3) demonstrating commitment to reduction of its carbon footprint and minimising impacts of climate change.

‘Next year we plan to focus on climate change, monitoring carbon pricing at a regional level and looking at a shadow carbon price,’ he says. In addition, the company is also keeping a close eye on legislation in all its jurisdictions, disclosure initiatives and pending regional carbon taxes.

Gold Fields is also aligning its energy management practices to the ISO 50001 global energy management system standard. Full alignment is expected by 2020.

ICMM members supporting the SDGs