LESS COAL, MORE WIND IN ITS SAILS.

LESS COAL, MORE WIND IN ITS SAILS.

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Exxaro Resources, at present a predominantly coal mining company, has started to diversify away from fossil fuels towards alternative resource opportunities. The company has a 20% stake in Kumba’s Sishen Iron Ore Company. It also has two wind farms in the Eastern Cape with a generation capacity of 239MWthrough its ownership of Cennergi, which owns and operates the Tsitsikamma Community and Amakhala Emoyeni wind farms. “Renewable energies will be a future growth area,” says Exxaro CEO Mxolisi Mgojo. “We have been very deliberate about how we diversify Exxaro’s portfolio towards cleaner energy resources.” In March, Exxaro published its climate change position statement, which includes its target to be carbon neutral by 2050. Mgojo says the company is cognisant of the physical and transitional risks of climate change and considers it a serious threat both to the business and to society, A decision was taken to develop policies and programmes to begin the transition to a low-carbon future. Exxaro is part of the mining industry’s Just Transition Climate Change Pathways Project. “We believe renewable energy resources can play a significant role in the supply of reliable power in SA, providing greater economic participation and energy security for previously marginalised communities and access to affordable energy, while keeping our communities healthy and resilient to the impact of climate change,” says Mgojo. A key element of Exxaro’s climate change adaptation journey is operational resilience. What this refers to, explains Mgojo, is the company’s ability to withstand changes in the global economy by managing its portfolio of projects and capital allocation and by climate-proofing the business through ways of incorporating an eco-friendlier approach to supplying power. However, Mgojo says coal will continue to be a critical part of SA’s energy mix for the foreseeable future. “Coal will remain relevant in the production of electricity in SA for some time to come high
ExxaroOur Climate Change Response Strategy is integral to our Sustainable Growth and Impact strategy and objectives as we understand that these elements of our business and operating environment are deeply connected. Our strategic response is also guided by our purpose of powering better lives in Africa and beyond. We believe our greatest opportunity is to help steer South Africa towards a sustainable future through undiluted focus on low-carbon minerals and energy. Our existing coal business portfolio will continue to remain relevant and central to our transition journey. South African government has outlined the energy transition of the country in the Integrated Resource Plan 2030. As the largest supplier of coal to Eskom we have the national responsibility to ensure that we continue to provide quality coal to Eskom during the energy transition process contained in the IRP-2030. We also recognise the risk of stranded assets due to transitional and physical risks of climate change that may make it difficult for our business to operate. To mitigate this risk we have implemented the Early value strategy that will optimise our coal resources to focus on realising maximum value in the shortest period. Climate change does not only present our business with risks, we are leveraging the opportunities presented by the transition to low carbon world. We are committed to meeting our target of being carbon neutral by 2050 by consistently reducing our direct emissions. We also have a responsibility to partner with our suppliers and customers in an effort to reduce our indirect emissions. Our metrics and targets will ensure we have visibility in our progress towards achieving this target and making our business climate-proof.

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