Golden lining on management of greenhouse gas emissions

Afforestation of sand tailings in Sierra Leone
Afforestation of sand tailings in Sierra Leone.jpg

Mines in African countries should not wait for the inevitable tightening up of measures on climate change and carbon emissions before exploring greener energy options on mining sites, especially as there are significant cost savings to be made from fast-evolving renewable technologies.

Many operations must make their own power supply arrangements, as they are too remote to access the national electricity grid or the supply of electricity is not reliable. This usually involves establishing diesel generation on site, an option which both increases energy costs – not least because diesel must be delivered to site – and adds significantly to the carbon footprint of the mine.

Mines in Africa, like elsewhere, are required to comply with resource efficiency and pollution prevention standards stipulated either by national regulations, by Equator Principles Financial Institutions (EPFI) like the International Finance Corporation (IFC), or by index listing requirements such as the Dow Jones Sustainability Index. The requirements usually include quantifying and reporting on greenhouse gas emissions in accordance with internationally recognised methodologies and good practice such as the Greenhouse Gas (GHG) Protocol.

In terms of the Equator Principles, the EPFI requires clients to report publicly each year if the project emits over 100,000 tonnes of CO2 equivalent annually. If emissions are over 25,000 tonnes, then clients are encouraged to report publicly. This can be done through voluntary reporting mechanisms such as the Carbon Disclosure Project.

The IFC’s Performance Standards on Environmental and Social Sustainability stipulate that mines should consider energy generation and usage alternatives and “implement technically and financially feasible and cost-effective options to reduce project-related GHG emissions during the design and operation of the project”. This could include use of renewable energy for generation and driving increased energy efficiency of operations.

Developing useful and reliable accounting systems for monitoring carbon emissions is a lengthy process but is key to proactively managing risk and insulating the business from the effects of future regulations, especially as more onerous climate change policies are clearly on the way in most developing countries; it is easier to adapt the systems and measures in place rather than trying to address the problem retroactively. South Africa has committed itself to applying a carbon tax, for instance, although it is not yet clear when it will be imposed and how the grounds for exemption will be negotiated.

Treating cleaner energy as a ‘nice to have’ instead of a necessity would be to miss a valuable opportunity. There is merit in being more innovative about managing greenhouse gas emissions, especially taking advantage of improved small scale renewable energy generation technologies.

Africa’s climate, and its abundant sunshine in particular, can open up various opportunities to improving a mine’s bottom line. Regardless of the scale of the operation, a mine could benefit from renewable energy as a strategy to gain a measure of ‘energy independence’ – not just from an unreliable grid but from the carbon-based fuels traditionally used on site. There are already quite a few small-scale solar projects that have proved successful in supplying capacity of up to about 10 MW – enough power to run a factory process or a small mine.

Opportunities also lie in the fact that mines often exist in clusters, where operations mine the same or adjacent orebodies. In an ideal world, it would make sense for neighbouring mines to investigate energy solutions on a cooperative basis, using the economy of scale and sharing facilities.

Interestingly, the current push towards renewable energy in many African countries suggests that future policies and programmes in other parts of the continent will be more progressive than South Africa has been, despite the latter’s larger internal market. East African countries are enthusiastically involved in the Africa Clean Power Corridor initiative, and are setting ambitious renewable energy targets for themselves. North Africa has a planned network of solar-generated electric schemes, which has its eye on exporting electricity to Europe.

Even hydro-power is on the table as an option for small-scale applications, and is being explored in countries in West Africa, as well as in the Democratic Republic of Congo. Looking 20 or 30 years ahead at Africa’s power options, the energy mix is likely to be very different, and this will no doubt bolster any efforts that mines are making to find clean energy solutions. Indeed, reliable and affordable technologies in renewable energy may well open up opportunities for mining in areas where access to conventional sources was prohibitively expensive.

The reputational and financial impact is important for a mine’s stakeholders, including its financiers and increasingly green-minded shareholders. It is also possible that a mine’s investment in renewable energy may help facilitate electricity provision to surrounding communities. The opportunities are there, and deserve exploration at the earliest possible point in the project concept and feasibility studies.

Besides looking at clean energy initiatives, there are instances where the use of renewable energy is not the best practical option for reducing a mine’s carbon footprint. In such cases, off-sets are an alternative option and could include planting forests or vegetation which could have the effect of a ‘carbon sink’ – a reservoir to absorb carbon dioxide from the atmosphere. However, there is some debate on the real efficacy and impact of this option.

Carbon offsetting is still a relatively new concept that, in South Africa at least, is still in development from a policy perspective. From an African perspective, value could be derived from putting in place emission reductions that qualify as a ‘Clean Development Mechanism’ (CDM) project or through a ‘Reducing Emissions from Deforestation and Forest Degradation’ (REDD) mechanism.

These options involve highly complex certification processes, but there can be financial gains for the mines in terms of selling carbon credits and positive community and social initiatives that could be established. While this may not be technically regarded as offsetting, it is a more attractive proposition in regions where legislation regarding carbon emissions is relatively weak. Realistically, offsetting should be viewed as the last option in the mitigation hierarchy.

By Vis Reddy, principal scientist and partner, and Paul Jorgensen, environmental scientist, SRK Consulting (SA)

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Issue 42