With growing emphasis being placed on environmental, social and corporate governance (ESG) and a global focus on a just energy transition, the mining sector faces various internal and external pressures to deliver on ESG, and carbon neutrality and abatement targets, Southern African Institute of Mining and Metallurgy environmental, social, governance and sustainability committee chairperson Professor Michael Solomon has said.

During a panel discussion at this year’s Sanlam ESG Conference, held on August 1, he pointed out that, while mining faces pressures from investors and external stakeholders, the sector was also driven by a social licence to operate.

He noted that, while mining companies in South Africa aimed to comply with the requirements of the Paris Agreement, challenges, such as high power costs, were also pushing a shift towards renewable energy.

Solomon also discussed the importance of appropriate mine closure strategies, warning that mine closures could create further environmental damage, as well as social and economic distress.

Moreover, Solomon also noted the importance of including communities in the just energy transition, arguing that the implementation of just energy projects by mines did not necessarily benefit mining communities.

To this end, he noted the importance of enabling communities impacted by mining activities to benefit from distributed energy generation post mine closure.

“This is a problem that we haven't solved,” he said.

Also speaking on the panel, Energy Council of South Africa CEO James Mackay discussed technology disruption in mining, noting that clean technology was dominating global investment.

With this in mind, he argued that South African companies needed to think about becoming competitive in the space and how to be resilient as an economy.

“We have to recognise the impact of climate change, but ultimately, a just energy transition is going to [occur] around industrialisation, because that's how we're going to create more jobs, more skills, more manufacturing, and this is where the investment is moving.

“So I think in that context, businesses have to think really quickly, be very nimble and have really good strategies. I think this ESG reporting, and everything that goes in it, including the engagement with your stakeholders is super critical,” he added.

Additionally,  Solomon argued that, while South Africa had reporting policies in place, it was the responsibility of those operating within that policy to implement policy objectives.

Hence, he argued that while mines were committed to ESG, and carbon abatement and carbon neutrality, policy implementation, as well as communication, needed to be improved.