"In 2020 Exxaro aquired Tata Power’s 50% stake and today we are the fourth largest renewable energy company in South Africa."
Can you give an overview of Exxaro and the company’s history in the region?
MM: Exxaro was established in 2006 and culminated from a history of two companies that came together; the non-iron ore business of Kumba Resources and Eyesizwe Coal. The company has grown to become one of the largest black-empowered diversified mining companies in South Africa and has an asset portfolio that includes coal operations and investments in iron ore and zinc, residual pigment manufacturing and renewable energy. In 2012 we formed a 50/50 joint venture with Tata Power to establish Cennergi, out of which we bid for renewable energy assets and ended up constructing two wind farm projects with 230 MW generation capability. In 2020 Exxaro aquired Tata Power’s 50% stake and today we are the fourth largest renewable energy company in South Africa.
Can you elaborate on Exxaro’s ESG strategy?
NT: Our revenue is generated mainly from coal sales to domestic and international energy markets. We are the largest coal supplier to Eskom and the fourth largest South African exporter of thermal coal. South Africa’s latest Integrated Resource Plan 2019 (IRP 2019) expects approximately 5,400 MW of coal-fired electricity generation by Eskom to be decommissioned by 2022, increasing to 10,500 MW by 2030, 25,765 MW by 2040 and 35,000 MW by 2050. Any new coal power capacity must use clean coal technology due to international restrictions on financing coal-fired power plants. As the largest coal supplier to Eskom, we will continue to support and maintain the supply of coal in line with the government-approved IRP 2019.
Our sustainable growth and impact strategy integrates business sustainability as well as development and impact because we understand that these elements of our business and operating environment are deeply connected. We cannot grow sustainably without deliberately creating a positive impact on the environment and communities we serve. We aim to make our portfolio resilient to low-carbon worlds. We want to ensure that our revenue is primarily generated from low-carbon business operations while moving towards carbon neutrality (scope 1 and 2) by 2050. We are committed to meeting our carbon neutrality target by consistently reducing our direct emissions and partnering with our suppliers and customers to reduce our indirect emissions. We have already started to move to electric vehicles and are conducting in-pit crushing to reduce our emissions.
MM: Since 2010, we have focused on ESG principles to participate in the transition to a low-carbon world and greening the energy system to reduce emissions while supporting prosperous and safe communities. The just transition to a low-carbon business envisages social inclusion that will make our business resilient to climate change transitional and physical risks, sustain and create employment opportunities, and increase the adaptive capacity of communities relying on our operations.
Renewable energy opportunities will drive the global response to climate change. The commissioning of our wind farms demonstrates that we are committed to powering a clean world with a portfolio of clean energy resources.
SS: Exxaro recognizes the negative contribution our coal mining assets can have on the environment. We also have no control over the uncertainty over the future of coal as a commodity. With coal’s uncertain future, we must focus on our control over how we exploit our resources and what we do with these resources to leverage from where the value is in the market. We have thus implemented an Early Value Strategy that will optimize our coal resources to focus on realizing maximum value in the shortest period.
Do you have a final message for our international readership?
NT: Given our years of experience, Exxaro is well positioned as a renewable player. If we will succeed in creating a green economy, we will need minable commodities that contribute to building this economy.
MM: Exxaro has always had a diversified portfolio. Today we are rebuilding our efforts and following a pathway to leverage our capabilities and skillsets to support a green economy. We have a strong focus on sustainability founded on creative, mutually constructive relationships and common values with our stakeholders. We conduct our business activities to create success for both us as a company and society as a whole. From how we mine to what we mine, we’re stewarding our natural assets and social capital and using them to uplift our communities. We are aware of the need to be responsible and accountable for our actions and conduct our business activities to support the development of society within our spheres of influence. We strive for operational efficiency, growth and regulatory compliance within a framework of responsible corporate citizenship.