Are big corporate mining companies trying to look good by selling mines to black junior miners and black companies? Or is this just a timely coincidence of luck to black junior miners and small black companies?
By Matome Seketa
A decarbonized economy is fast becoming an ideal economy, and the world has embraced the inevitability of the
effects of climate change caused by global warming and the world’s contributions thereto. Measures are being put into place to mitigate the environmental impact that results from gas emissions, among other global warming attributes. The Paris Agreement signed in April 2016 where South Africa also took part alongside other countries became a legally binding international treaty on climate change intended to limit global warming.
Investors worldwide are also increasingly putting pressure on companies to offload environmentally unfriendly assets as as the world takes a new direction, mining companies as gas emitters cannot afford to sit behind and simply
turn a blind eye, it’s time for them to proactively adapt or (in a long run) demise.
Mining companies doing businesses in South Africa are not immune to this coming imminent change, a move towards a greener mining sector. According to Anglo American’s website, the company wants to get rid of its coal mining
interests, as the company plans to become carbon neutral by 2040. Anglo American has already unbundled to form a company named Thungela Resources to hold the company’s coal assets in South Africa, and it has sold some of its coal mines. Thungela Resources will also hold a 50% stake in Mafube Colliery in Mpumalanga, Anglo American’s joint venture with Exxaro.
Exxaro also sold three coal mines, collectively known as ECC(Exxaro Coal Central) to a 100% black-owned mining company, Overlooked Colliery. Exxaro asserted that ECC is ‘noncore to the company’s future strategic objective’. Exxaro is said to venture into greener alternative energy technologies. SAEC (South African Energy Coal), majority-owned by Australian based South 32, has sold mines to Seriti.
The question is: Are these companies being strategically proactive or is this just a timely coincidence?
Recent reports indicates a 14% decrease in the global carbon dioxide emissions attributed to fossil fuels burning and industrial procession which also include coal mining, directly and indirectly. Numbers are proofing that the world
is gradually emitting lesser carbon dioxide, and that more and more companies are establishing carbon neutrality targets and if that is the case (and it is the case), then why are black owned companies still clinging on to coal mining, or why are they at this point still eager to buy into this businesses? Why would they want to go one direction when the entire world seems to be intending to go on the other direction, are they consequently shooting themselves on the foot by buying coal mines when the captains of the industry seems to be dumping them, is it because of profit? South 32’s SAEC(South African Energy Coal), which is now owned by Seriti, and Exxaro’s Coal Central (ECC) now
owned by Overlooked Colliery are major coal suppliers to Eskom, which is the seventh largest electricity generator in the world, and with the lack of alternative energy sources and the country’s estimated coal reserves of 200 years of
coal supply, profit is guaranteed in this industry.
Profit is good and mines are still essential for the economy of the country, which is on the top five world coal supplier in the entire world, however what this is going to say about these mining companies might be that to them environmental preservation and protection is subordinate to financial gains
Coal is South Africa’s major energy source, and there has not been any major feasible investment to technology innovation for carbon neutral energy generation for the country’s energy supply made yet, either by the state-owned energy entity, Eskom, or the Department of Public Enterprise. This means coal mining is still essential for the country’s
Clearly there is a gold mine of profit to be made from the coal mining industry and black people have been excluded from the table for far too long during the past years of racial discrimination even in business, perhaps it is just about time for black-owned companies to also have their hands on the pie for the time being, that is for as long as there is a
need for the supply of coal and until there are sustainable alternatives.
Global warming is a course for concern, and the truth is; history will harshly judge those that are not putting effort into averting towards carbon neutral energy. Companies intending to build good lifelong reputations knows that profit is sometimes to be subordinated to reputation for long term gains