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Energy and carbon management

Energy and carbon management

Electricity consumption (MWh)
Electricity consumption
(MWh) – per region
Diesel consumption (TJ)
CO2 emissions* (tonnes)
 

Rising energy costs and growing concerns about the effect of climate change have elevated the importance of energy efficiency and carbon management for large companies such as ours.

In its pursuit of being the global leader in sustainable gold mining, Gold Fields has been proactively aligning the company and its operations to a carbon-constrained economy. Our intention is to make low-carbon behaviour and related business decisions the norm within the company. Energy efficiency is integral to our carbon policy and a key environmental consideration. At most of our operations electricity is derived via coal or diesel, which are major contributors to CO2 emissions around the globe. Saving energy will thus have a positive and measurable impact on our environmental footprint.

Adopting an integrated carbon management strategy

Gold Fields is in the process of formulating an integrated carbon management strategy. This will align us with the latest corporate governance standards and the requirements of King III, which demands increased attention to climate change and recognition of the business costs and opportunities of environmental risks.

Once implemented, the strategy will provide a framework for the inclusion of carbon and climate change-related issues into business planning models and decision-making processes throughout the company. Through the implementation of this strategy Gold Fields will seek, amongst others, to:

  • Limit its liabilities in view of existing and impending emissions regulation;
  • Decrease energy costs through improved energy efficiency and lower emissions; and
  • Increase revenues through opportunities such as carbon trading.

The strategy has been distilled into 15 initiatives and will be rolled out to all regions supported by an extensive communications campaign.

Tracking and reporting on impact

The company’s key source of carbon emissions is coal-fired electricity in the South African operation and gas and diesel-generated power in the Australasia, West Africa and South America Regions. In a number of countries in which we operate our emissions are being measured and monitored.

In South Africa Gold Fields was ranked fifth overall on the Carbon Disclosure Leadership Index among the JSE Top 100 Companies. The company furthermore discloses its carbon footprint to the National Business Initiative’s Carbon Disclosure Project (CDP), which details the calculation of the carbon footprint and quantifies and reports greenhouse gas (GHG) emissions. During the year under review we reported on Scope 1, 2 and 3 emissions for the company’s global operations.

Our carbon footprint for the year was 7.4 million tonnes CO2-e, comprising 1.3 million tonnes Scope 1 emissions, 5.1 million tonnes Scope 2 and 1 million tonnes Scope 3 emissions. Total 2010 emissions were virtually unchanged from 2009 levels, but significantly higher than the 6.1 million tonnes CO2-e emitted in 2008, when the South Deep and Cerro Corona Mines were not included in our portfolio. The carbon footprint per ounce of gold was determined to be 1.78 tonnes CO2-e/ounce, compared with 1.51 tonnes CO2-e/ ounce in 2009 and 1.4 tonnes in 2008. (This calculation only takes into account Scope 1 and 2 emissions). The scope definitions are contained in the glossary.

The South African operations accounted for 90 per cent of all Gold Fields Scope 1 and 2 emissions for calendar 2010. This is not surprising given that the South African mines, with their extensive underground operations, utilise the most electricity.

In accordance with the National Greenhouse and Energy Reporting Act 2007, the Australasian operations reported to the National Pollutant Inventory and made its annual energy efficiency opportunities submission. Four projects were highlighted as potential opportunities, including a fuel management system installation, ore haulage optimisation and secondary fan rationalisation.

Australia’s draft legislation for the Carbon Pollution Reduction Scheme (CPRS) was postponed until 2012. In the interim Gold Fields has registered with the CPRS. When it comes into force, this cap and trade legislation will allow the company to import certain carbon units.

The South African energy challenge

Electricity accounts for around 96 per cent of the energy used in the Gold Fields’ South Africa Region. The country’s energy supply crisis and the 25 per cent per year national electricity tariff increase for each of the next three years are therefore material issues. As part of its ongoing response to the energy supply crisis in the country, the company made a commitment during the year to reduce its electricity consumption at its South Africa Region by five per cent during financial 2010, equivalent to around 30 MW.

It is however important to understand this figure in light of various factors that affect energy consumption in underground mining. Around 48 per cent of all electricity consumption is used for ventilation and the cooling and pumping of water. The cooling requirements of deep underground mines depend on the depth of the mine and increase exponentially with the depth at which mining is undertaken. The average depth of ore mined in South Africa has increased over the past few years and as a result energy consumption per tonne mined has risen. Similarly we are ramping up production at South Deep which also requires a significant rise in power usage.

Furthermore average electricity demand rises as the grade of ore mined declines due to increased hoisting and milling requirements. In South Africa the average yield has decreased from 5.5 g/t in financial 2007 to 4.2 g/t in financial 2010, resulting in a slight increase in average electricity consumption per kilogram gold produced. However, the energy savings alluded to earlier managed to offset these increases and enabled the South Africa Region to reduce its energy consumption significantly during the year under review.

The Group’s total electricity consumption rose by 11 per cent to almost 5,922,322 MWh as Cerro Corona was included for the full financial year for the first time. The commissioning of Tarkwa’s CIL plant also boosted power usage.

Energy-saving and alternative energy projects

During the year, Gold Fields invested heavily in energy-saving initiatives across all its operations. These initiatives have gained higher commercial viability with the increased use of carbon credits to fund them. The South Africa Region has identified ten potential projects that, if successfully developed, could yield savings in excess of 600,000 tonnes of CO2-e (equivalent) per year.

The first among these projects – and the one that is up and running – is the Beatrix Mine Methane Project, which will generate about 5 MW of electricity and save around 2,000 tonnes of methane, which equals 42,000 tonnes of CO2–e (see case study, page 116).

Other projects include the Kloof Ice Chiller Project, currently in validation stage, which employs hard-ice technology for underground mine cooling. Once implemented the two projects should reduce our greenhouse gas (GHG) emissions by around six per cent.

In the Australasia Region, we have successfully tested a solar/ wind lighting system at St Ives to replace diesel-fired lighting. The company is reviewing options to roll out the system more extensively at the St Ives and Agnew operations and is also investigating the possibility of using solar-powered pumps for tailings dams.

As a new operation, the South America Region is still investigating potential energy-saving projects. Two focused investigations at our Ghanaian mines – extending the life of truck tyres and use of cleaner diesel fuels – have already led to significant energy savings. However, as a result of the increased mining rate, diesel consumption in Ghana went up slightly.