The mining sector is responding to increased demands of shareholders and the macro-economic environment for carbon-neutrality, but many companies are struggling to implement the novel solutions and forge the partnerships required to achieve results.
“A consistent theme in this year’s Mining Indaba is the imperative toward action,” said Mark Dickson, Head of Energy Transition and Decarbonisation at dss⁺. “Many companies have pledged their willingness to change, but the practicality of these changes – which need to be systemic – are much more complicated to address.” Dickson was speaking at a session titled “Decarbonisation – Key Trends and Strategies” at the Investing in African Mining Indaba in Cape Town.
“Taking risks into consideration is paramount, and implementing real decarbonisation plans requires internal planning and risk mapping, the right capabilities and operating models at the asset level, external collaboration with relevant partners, as well as industry-level solutions and lobbying,” said Dickson. “A big challenge is ensuring that the transmission and distribution of renewable energy, for example, can service the demands of the mines moving from diesel or other fossil-based sources – and this is not a problem that can be solved purely by one company.”
Another key issue is funding. In order to mobilise decarbonisation projects, companies need to access finance that will not hinder company returns whilst enabling the projects that achieve demonstrable ESG results. “Resources like sustainability and ESG-linked loans can be tied to specific outcomes, such as GHG emissions reduction, for which the borrower receives a discount on the interest rate,” added Dickson. “These type of financing vehicles will become more important as mines start to turn decarbonisation roadmaps into action.”
The information session on decarbonisation was organised with dss⁺, whose recent acquisition of the Sofies group and KKS Advisors has expanded their capabilities to assist mining operations with designing and implementing decarbonisation strategies.
