Integrated Annual Review 2012 Annual Financial Report 2012 Mineral Resources and Mineral Reserves Regional overview  
 

5.3.3 Reducing our carbon and managing climate change

Growing recognition around the risks linked to climate change, as well as the implementation and increasing likelihood of carbon regulation in a range of jurisdictions, means we place strong emphasis on carbon and climate change management.

In addition, rising energy costs mean that any success in reducing our energy consumption delivers important commercial benefits, whilst also cutting our emission levels. In our South Africa region (which accounted for the majority of our power consumption in 2012), 90.5% of electricity is derived from carbon-intensive coal generation. As a result, it accounts for the bulk of our Scope 2 CO2 emissions.

Figure 5.18: Group CO2-e emissions –
Scope 1,2 and 3 (tonnes – pre-unbundling)
  Figure 5.19: CO2-e emissions by type
(% – pre-unbundling)
Figure 5.18: Group CO<sub>2</sub>-e emissions – Scope 1,2 and 3 (tonnes – pre-unbundling)   Figure 5.19: CO2-e emissions by type (% – pre-unbundling)

Energy and Carbon Management Strategy

Under our newly developed and fully integrated Energy and Carbon Management Strategy, we are targeting:

  • Carbon emissions reductions of 13% by 2016 against our ‘business as usual’ projections
  • An average of 20% renewable energy generation on all new mine developments

Furthermore, we will now apply two key rules to all future energy investments:

  • No operation should utilise a more carbon intense source unless security of supply or price makes it necessary
  • All new mine developments must rely on renewable sources for at least 20% of their energy demands

Under this strategy, each of our regions in collaboration with the Group Technical Services function has developed a Carbon Management Plan (CMP), focusing on:

  • Management and reporting
  • Mitigation
  • Adaptation

These plans will support the integration of energy and carbon pricing and reduction into our financial and operational planning – as well as the integration of energy and carbon targets into managers’ balanced scorecards – from 2013 onwards.

Carbon Pricing Mechanism in Australia

Australia’s Carbon Pricing Mechanism commenced in July 2012 (p151), prompting our Australasia Region to implement impact mitigation measures, including:

  • The locking-in of diesel prices through the application of a fuel hedge
  • A study on potential vendor and contractor carbon price pass-through costs

We estimate that the removal of our diesel rebate under the new tax regime will increase our costs by A$6 million (US$6 million) a year.

Beatrix Methane Project

Although the Beatrix Methane Project continued to operate during 2012, burning 250m3 of methane a second, we have put on hold plans to install a second burner. This is due to a slump in the price of Certified Emissions Reductions (CERs), which has a material impact on the project’s economics. Nonetheless, Beatrix started generating electricity from the project in March 2013 – accounting for around 3% of the mine’s total energy needs.

The project was also registered under the UN’s Clean Development Mechanism (CDM), helping it generate an initial batch of 9,643 CERs at the end of 2012, valued at a total of R280,000 (US$35,000).

Total emissions reductions relating to the Beatrix Methane Project in 2012 amounted to 40,928 tonnes of CO2-e.

Wider renewable energy projects

We have further enhanced plans for potential renewable energy projects in both the South Africa Region and the West Africa Region, including:

  • The 30MW Tarkwa Biomass Power Plant project, with construction to potentially be undertaken by the Nollen Group. A construction decision is expected in 2013
  • Completion of a prefeasibility study for a waste and biomass energy project at KDC and initiation of registration of the project with the CDM
  • Ongoing collection of wind data at St Ives to assess potential for wind generation
Figure 5.20: Carbon intensity (pre-unbundling)1
Figure 5.20: Carbon intensity (pre-unbundling)1
1 Scope 1 and 2 only