A globally diversified resources company has confirmed it will transition away from fossil fuels and increase renewables.
South32 will reduce its metallurgical coal market presence and shift the business towards more low-carbon commodities.
“We have been actively repositioning our portfolio to increase our exposure to base metals that are critical in the transition to a low carbon world,” chief development officer Simon Collins said in a video shared on YouTube.
“We currently have more than 20 greenfield exploration partnerships and projects targeting copper, zinc and nickel predominantly in the Americas and Australia. All of these projects create an exciting opportunity to transform South32 for the long-term.”
‘Theory’ motivates exit
The proponent claims its new strategy will halve the amount of carbon dioxide its operations release into the atmosphere by the year 2035. It believes this will reduce any impact on long-term weather patterns according to the theory of climate change.
“Four of our operations generate about 90 per cent of our emissions [and] they are Hillside Aluminium, Mozal Aluminium, Worsley Alumina and Illawarra Metallurgical Coal,” South32 chief external affairs officer Kelly O’Rourke said in the same video.
“There are opportunities at each of these operations to reduce their carbon intensity [and] we are looking at options to reduce emissions from our refineries and smelters by transitioning to green energy.”
The company has already finalised the sale of its stake in South32 SA Coal Holdings (also known as South Africa Energy Coal) to Seriti Resources, after reporting multiple mining areas made losses.
“Exiting thermal coal is a transformative milestone for South32 [and,] with fewer operating sites and reduced head count, we are a significantly simpler company,” Collins said.
“We were [also] seeking a black-owned and operated company to acquire South Africa Energy Coal, consistent with South Africa’s transformation agenda. We are pleased to have achieved this vision through the transaction with Seriti Resources.”
South32 has also exited the Tasmanian Electro Metallurgical Company and placed the Metalloys Alloy Smelter in care and maintenance to halve its scope three (also known as value chain) emissions.
“We will halve our scope three emissions [and] we will substantially reduce our capital intensity, increase group margins, and have greater balance sheet flexibility,” Collins said.
The company hopes to go carbon neutral no later than the year 2050 through investing in more environmentally friendly technology and business practices.
“We will deliver this target through decarbonising our existing operations, securing green energy, designing our growth projects to be carbon neutral and low-carbon technology,” O’Rourke said.
“This will take time. In the short term, we have set ourselves quantitative and qualitative targets to reduce our carbon footprint through investing in efficiency projects, applying low-carbon design principles, and evaluating carbon reduction technologies.”
South32 will also inject funds into improving and extending a variety of projects including the Cannington Silver and Lead Mine in McKinlay, 312km southeast of Mount Isa.
“We will continue to invest in improvement and life extension projects across our portfolio, from Cerro Matoso to Cannington to our aluminium smelters,” South32 chief financial officer Katie Tovich said.
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