Green Economy Journal Issue 52

G R E E N
Economy
journal
www.greeneconomy.media
ISSUE 52 | 2022
IMPROVING LIVES
THROUGH WATER
The Olifants
Management Model
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G R E E N
Economy
journal
CONTENTS
6 NEWS AND SNIPPETS
8 WATER
Improving lives through water
12 MINING
Green business for good
14 The economic case for the mining
industry to support carbon taxation
18 STORAGE
Carbon Capture, Utilisation and
Storage
20 MINING
Sunshine is golden for the mining
industry
24 Global standard prioritises better
management of water
26 TSF failure: standards for response
and recovery
29 Opportunity for Africa to fill the
commodity gap
30 Winning with the right procurement
localisation
34 MOBILITY
EV battery supply chain – trends,
risks and opportunities in this
fast-evolving sector
37 State of the motor industry
41 STORAGE
Second-life storage batteries:
a true circular economy solution
42 ENERGY
The race to green hydrogen in Africa
46 Shaping tomorrow’s hydrogen market
48 METROLOGY
The National Metrology Institute of
South Africa supports manufacturing
and trade
50 THOUGHT LEADERSHIP
To densify or not: the pandemic as
a driver of urban transformation
54 WATER
The good, bad and ugly in South
Africa’s watercompliance
56 GREEN TECH
The fully-fledged state-owned
enterprise
59 ENERGY
Industrialisation through local
manufacturing
60 WASTE
Sustainable IT transforms waste
into opportunity
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3

PUBLISHER’S NOTE
Dear Reader,
The renewable energy market is bursting with megaprojects,
either awarded or about to be awarded, with new
rounds being announced (sic REIPPPP BW6) while at the
same time somehow retentive, hesitant, stymied while the
broader economy is desperate for power and an end to the
incessant load shedding.
RMIPPPP promises so much and yet a combination of
legal challenges, radical technology, cost hikes, delays in
permissions, grid capacity constraints and myriad other
headaches are ratchetting up the pressure, the costs and
ultimately the risk.
And we know how banks feel about risk!
REIPPPP BW5 has been awarded, but also faces the same
input tech cost hikes and grid access challenges. And I
cannot overstate this – IPPs with gigawatts of bid-ready
projects, after doggedly soldiering through the bidding
hiatus, have seen the bulk of their pipelines wiped off the
books by the grid access f__k-up in the Northern Cape. Eish!
The private sector is steaming ahead, but there too, it’s all
too new and it’s taking time for the nay-sayers to leave the
building, and let the doers get on with it, while equipment
gets more expensive and less available in this Putin inspired
global mess previously known as logistics.
I feel like I’m in a straight jacket trying to gesture my
argument, while onlookers note that I’m obviously mad!
Calling all stakeholders to find a way to make these
projects work, shift tariffs if costs have legitimately shifted,
find a way for IPPs to jointly fund investments in grid
capacity, cut red tape, let ideology take a back seat. We all
need this. We all need this now!
Yours,
G R E E N
Economy
journal
EDITOR:
CO-PUBLISHERS:
LAYOUT AND DESIGN:
OFFICE ADMINISTRATOR:
WEB, DIGITAL AND SOCIAL MEDIA:
SALES:
GENERAL ENQUIRIES:
ADVERTISING ENQUIRIES:
Alexis Knipe
alexis@greeneconomy.media
Gordon Brown
gordon@greeneconomy.media
Alexis Knipe
alexis@greeneconomy.media
Danielle Solomons
danielle@greeneconomy.media
CDC Design
Melanie Taylor
Steven Mokopane
Gerard Jeffcote
Glenda Kulp
Nadia Maritz
Tanya Duthie
Vania Reyneke
info@greeneconomy.media
alexis@greeneconomy.media
REG NUMBER: 2005/003854/07
VAT NUMBER: 4750243448
PUBLICATION DATE: May 2022
www.greeneconomy.media
YOU SEE USED
BOTTLES.
COLLECTORS
SEE VALUE.
Publisher
EDITOR’S NOTE
Welcome to the 52 nd issue of Green Economy Journal. On
page 8, we look at an integrated water service model for the
Olifants River raw and potable water management called
the Olifants Management Model Programme. The model
has the potential to be replicated across the country as it
is underpinned by public-private participation which sets
a platform for community inclusivity. We wish the launch of
the Olifants Management Model Programme all the best.
To coincide with the African Mining Indaba 2022, this
issue of Green Economy Journal focuses on all things mining.
Enjoy!
Alexis Knipe
Editor
Cover image: The cover image shows the launch of the Olifants Management
Model Programme. Top picture: Anglo American Platinum. Bottom picture:
De Hoop Dam.
All Rights Reserved. No part of this publication may be reproduced or transmitted in any way or
in any form without the prior written permission of the Publisher. The opinions expressed herein
are not necessarily those of the Publisher or the Editor. All editorial and advertising contributions
are accepted on the understanding that the contributor either owns or has obtained all necessary
copyrights and permissions. The Publisher does not endorse any claims made in the publication
by or on behalf of any organisations or products. Please address any concerns in this regard to
the Publisher.
Recycling PET plastic bottles creates over 60 000 income
opportunities every year in South Africa. Many of these are
reclaimers, who helped divert upwards of 95 000 tonnes
of PET plastic bottles from landfill in 2019. The used bottles
they collect are recycled, ensuring that they become
bottles yet again. This creates yet more jobs in the process,
contributing positively to our country’s GDP while eliminating
the chance that they end up harming the environment.
Recycling ensures that a circular economy is established
where the value of plastic bottles continues indefinitely.
Plastic bottles are not trash.
55% POST-CONSUMER
beverage PET bottles
collected for recycling.
OVER 50 000
active collectors invloved in
PET Collection and recycling.
R278 MILLION
The market value of post-consumer
PET bought by PET recyclers.
* Reported in 2020
2106099_FP_E
4

NEWS & SNIPPETS
NEWS & SNIPPETS
NEW MINING GUIDELINES
In March 2022, the DMRE published the Artisanal and
Small-Scale Mining (ASM) Policy and the Mine Community
Resettlement Guidelines. Both policy documents illustrate
the desired integration of ESG standards in the mining sector.
The regulator provides guidelines on ASM and resettlement of
mine communities to assist them to fulfil their ESG obligations.
THE ASM POLICY
Currently, mining laws in South Africa do not regulate ASM as a
discrete form of mining. Instead, a mining permit which is less
onerous than a mining right can be obtained, but ASM miners still
struggle to meet its requirements. The ASM Policy aims to create
a formal ASM industry that can operate in a sustainable manner
and contribute to the economy. It introduces formal definitions for
artisanal and small-scale mining, setting out monetary thresholds
to differentiate between artisanal (maximum R1-million) and
small-scale (maximum R10-million) miners. It also distinguishes
between illegal mining, which is a criminal activity, and ASM, for
which an ASM permit is required.
IFC TO EXPAND GREEN BUILDING FINANCING IN SA
To support the construction of green buildings in South Africa,
IFC is providing a R600-million ($42-million equivalent) loan
package to Business Partners, a South African non-banking
financing entity specialised in providing finance, mentorship
and support programmes to SMEs.
WIND AND SOLAR
The Global Electricity
Review 2022 reports that
wind and solar generated
over a tenth (10.3%) of
global electricity for the
first time in 2021, rising
from 9.3% in 2020, and
twice the share compared
to 2015 when the Paris
Climate Agreement was
signed (4.6%). Combined,
clean electricity sources
generated 38% of the
world’s electricity in 2021,
more than coal (36%).
Global electricity generation. (Terawatt hours)
DOWNLOAD REPORT HERE
The ASM Policy provides structure to the ASM industry and, as
it becomes formalised and pays taxes, the ASM industry will be
able to contribute to poverty alleviation and economic growth.
The ASM may mostly be limited to surface and opencast mining.
THE RESETTLEMENT GUIDELINES
Resettlement for mining is not a new phenomenon. It is a
global issue which has attracted the attention of international
bodies such as the International Labour Organisation and the
International Council on Mining and Metals, both of which have
published guidance documents.
The Resettlement Guidelines outline the process for applicants
and holders of prospecting and mining rights or mining permits
to follow when their operations require the physical resettlement
of landowners, lawful occupiers, holders of informal land rights
and mine and host communities. It also applies to both new
operations and existing mines that are expanding and is intended
to apply throughout the lifecycle of the operation, whenever
resettlement is necessary.
Business Partners will use IFC’s loan to finance the construction
of certified green commercial buildings in South Africa and/or
to renovate existing commercial buildings to make them more
environmentally friendly, making them at least 20% more energy
efficient. Eligible green building certifications will include EDGE,
LEED, BREEAM and Green Star.
IFC will also provide financial incentives to Business Partners
to partially offset the costs involved in greening and certifying
buildings, based on the company meeting certain green building
targets in their portfolio.
Conventional buildings account for almost 40% of energyrelated
greenhouse emissions worldwide due to a growing urban
population and outdated construction practices. An IFC study
estimates that South Africa’s green building demand presents
a $7-billion investment opportunity between 2016 and 2030.
Although the supply of green buildings in the country is growing,
the green building market is still at a nascent stage.
Ember's Global Electricity Review
INVESTEC ISSUES GREEN BONDS
Investec has reaffirmed its commitment to funding a
sustainable future, with the issue of the group’s first green
bond. The bond is backed by several of Investec’s flagship
renewable energy projects. The bonds raised R1-billion under
Investec’s DMTN bond programme. The issue, which was 3.8
times oversubscribed, highlighted a healthy appetite among
institutional investors looking to make a positive impact in
terms of their ESG commitments.
The bonds have been issued in line with the Green Bond
Principles of the International Capital Markets Association, a
global association of debt securities issuers as well as the Investec
Sustainable Finance Framework. The principles seek to support the
financing of environmentally sound and sustainable projects that
foster a net-zero emissions economy.
“Investec’s green bond issue references existing, returngenerating
projects, rather than future projects. These are all
accredited renewable projects currently delivering clean power
into the grid,” notes Louis Dirker, head of debt capital markets at
Investec Bank. “In many cases, the projects also have concurrent
programmes helping to create jobs and uplifting communities.”
Investec’s green bonds reference five of South Africa’s leading
wind and solar projects, namely:
• Bokpoort CSP Power Plant (50MW)
• Aurora Wind Power Project (94MW)
• Karoshoek Solar One Project (100MW)
• Kathu Solar Park (100MW)
• Windfall 59 Solar Project (74MW)
According to the World Economic Forum, annual issuance of
green bonds is expected to exceed US$1-trillion in 2023, double the
amount issued last year. Considering that the global bond market
is worth some US$130-trillion, there’s significant room for green
bonds to grow within the fixed income asset class.
According to Dirker, South African institutional investors are
becoming more aware of the risks of climate change to their
portfolios and are having to disclose these. “There’s also greater
pressure being brought to bear from their stakeholders to make
a positive contribution through their ESG policies and related
financing. Green bonds thus fulfil an important role within the
fixed-income component of an institution’s portfolio, especially
where there is a reference to bankable, cash-generative projects.”
CLIMATE CHANGE BILL OPEN FOR COMMENTS
The portfolio committee on environment, forestry and
fisheries opened comments for the Climate Change Bill
in April 2022. The bill seeks to enable the development of
an effective climate change response and a long-term just
transition to a low-carbon and climate-resilient economy
and society for South Africa.
The bill details the need for appropriate adaptation
responses and requires the Minister of Environment, Forest
and Fisheries to implement an effective nationally determined
climate change response that encompasses mitigation
and adaptation actions that represent South Africa’s fair
contribution to the global climate change response.
GLOBAL LEADERS TO GUIDE COAL PHASE-OUT
The International Energy Agency (IEA) recently announced
that a high-level advisory group of global energy, climate
and finance leaders will provide strategic input for a
forthcoming IEA special report that will explore how to put
the world’s coal emissions on a path toward net zero amid
the major energy security and affordability challenges that
are affecting countries worldwide with particularly severe
economic impacts in the developing world.
IEA executive director Fatih Birol convened the High-Level
Advisory Group to offer recommendations for the major new
IEA report, Coal in the Global Net Zero Transition: Strategies
for Rapid, Secure and People-Centred Change, which is due to
be published in the fourth quarter of 2022. The report will
provide the first authoritative assessment of how to tackle
one of the world’s biggest energy and climate challenges
in the changed global landscape resulting from Russia’s
invasion of Ukraine.
The emerging global energy crisis driven by Russia’s
invasion of Ukraine has laid bare the challenges that
countries face in ensuring, sustainable and affordable
energy supplies in a complex and uncertain geopolitical
environment. As well as hurting consumers and businesses
around the world, especially in developing economies, the
turmoil in global energy markets threatens to derail efforts
to prevent the worst effects of climate change. Last year,
global energy-related CO2 emissions rebounded to their
highest level in history, largely because of record use of
coal to generate electricity.
The move away from coal will not be straightforward.
Renewable energy options are the most cost-effective new
sources of electricity generation in most markets, but there
are still multiple challenges to reducing emissions from the
existing global fleet of coal power plants while maintaining
secure and affordable electricity supplies. Increased financial
flows and new financing mechanisms will be essential to bring
down coal emissions and innovation in areas such as carbon
capture will be key in many industrial sectors
Tackling the consequences of change for workers,
communities and vulnerable consumers will also require
dedicated and determined policy efforts. This is especially
the case in developing economies where electricity demand
is growing rapidly, coal is often the incumbent fuel for power
generation, and unabated use of coal in the industrial sector
is on the rise.
Many of these challenges have become even more acute
in recent months amid the sharp increases in the prices of
energy and other crucial commodities, such as cereals and
other food staples, which have been driven to all-time highs
by Russia’s invasion of Ukraine. This is putting further strains
on the already fragile financial situation in many developing
economies. It also risks pushing energy sector transformation
down the policy agenda in countries worldwide.
6
7

WATER
WATER
IMPROVING LIVES
THROUGH WATER
Bolstered by a collective call to action by the president for the public and private
sectors to work together to address the infrastructure backlog, the sectors collaborated
and conceptualised the Olifants Management Model Programme.
SYNERGISTIC CO-EXISTENCE
The hive understands the need synergy between nature and
bees and between bees themselves. The bee logo (below) was
chosen as an interim icon to represent the synergistic nature of
the OMM Programme. The programme aims to achieve synergy
or collaboration between the public and private sector.
proposed Olifants Management Model Water User Association
(OMM WUA) with institutional and commercial members based
on a 50/50 collaboration model.
LAUNCHING THE OMM PROGRAMME
Institutional and commercial members joined forces to plan an
integrated water service model for the Olifants River raw and
potable water management called the Olifants Management
Model (OMM) Programme. The model has the potential to be
replicated across the country as it is underpinned by public-private
participation which sets a platform for community inclusivity.
To address the issues relating to the supply of water in the
region, members agreed to accelerate bulk raw water delivery,
potable water service delivery and socio-economic development
(SED). Besides providing much-needed water to surrounding
areas, the model will unlock the strategic mineral and industrial
potential in the region. It will also establish a sustainable platform
for the technical, financial and socio-economic growth of Limpopo.
COLLABORATION IS KEY
The OMM Programme was formalised through the signing of
a Heads of Terms for an OMM Framework Agreement in 2022
between institutional and commercial members.
Structured collaboration
In terms of the proposed governance structure, the OMM
Programme will be housed within the OMM WUA, which will
be the implementation vehicle for the OMM Programme. The
proposed OMM WUA authority structure is underpinned by
a Charter in accordance with the principles of King IV TM good
governance. The OMM Programme Steering Committee shall
consist of seven members: three appointed by DWS, three
appointed by the Commercial Users Consortium, with the CEO as
a co-opted member.
De Hoop Dam outside Steelport in Limpopo.
South Africa is a water-stressed country and is facing several
water concerns. The lack of basic services such as water
supply and sanitation is a key symptom of poverty and
under development. In this context the provision of water supply
and sanitation services cannot be separated from the effective
management of water resources.
Department of Water and Sanitation (DWS), as sector leader,
seeks to manage the critical balance between sustainability of
the resource, equitable allocation and economic growth. The
National Water Act 36 of 1998 mandates DWS to ensure efficient
conservation, management and control of resources to support
the country’s water security needs. Future challenges will depend
on current responses.
Sustainable solutions require a systematic approach of
integrated solutions rather than addressing issues in isolation.
Most of these opportunities will need to take advantage of the
synergies between government, private sector and civil society.
In response to the negative growth impact of water and
sanitation challenges, DWS has over time established a wide
variety of partnerships. Lebalelo Water User Association (LWUA)
was established in 2002, in line with the National Water Act, as a
WATCH VIDEO
collaboration between DWS and the mining industry (ie ordinary
and industrial members) to build bulk raw water infrastructure
that will develop the Eastern Limb of the Bushveld Igneous
complex in Limpopo.
LWUA’s purpose is “improving lives through water” and its
strategy sets out a staged implementation approach that not only
aims to transform the Association into a strategic model for future
water delivery in the country, but to use water as a catalyst for
socio-economic development in the areas it operates in. LWUA
itself is also transforming and rebranding and will become the
Sustainable solutions
require a systematic
approach of integrated
solutions rather than
addressing issues in isolation.
THE NEED FOR THE OMM PROGRAMME
The OMM Programme aims to improve socio-economic growth
in the Limpopo Province through the acceleration of the Olifants
River Water Resources Development Plan (ORWRDP) and the costeffective
provision of potable and raw water infrastructure to
defined areas in the Northern and Eastern Limbs of the Bushveld
Igneous Complex.
In the early 2000s, DWS conceptualised the ORWRDP to address
the bulk water needs of the middle Olifants River catchment
area. Projected water demands had increased significantly due
to the anticipated development of the mining sector. A key
objective of government was to stimulate this mining growth
and associated economic activity in a sustainable way for the
8
9

WATER
WATER
OMM PROGRAMME OVERVIEW
The scope of work entails:
Augment Supply. Move a portion of the scheme’s current
supply from Flag Boshielo Dam, via the abstraction point on
the Olifants River at the Havercroft Weir, to the De Hoop Dam
to enable water supply to the Mogalakwena area from the Flag
Boshielo Dam.
Re-sequence ORWRDP. Re-sequence the construction of the
ORWRDP bulk raw water infrastructure to meet revised water
needs and reduce capital costs.
Establish resource partnership. Set up a partnership to construct,
operate and maintain defined infrastructure.
Implement socio-economic development. Put a SED plan
into effect that is focused on potable water (for approximately
380 000 people), sanitation services, connectivity, education
and enterprise development to develop skills, create jobs and
change behaviour.
benefit of the local and national economy in concert with the
Growth and Development Strategy and the Spatial Development
Framework of the province.
ORWRDP is a designated strategic integrated project in terms
of section 7(1) of the Infrastructure Development Act, 2014 and of
significant importance to South Africa.
Phase 1 of the project, raising Flag Boshielo Dam by five metres,
was closely aligned to the developing mining sector in the area.
Prosperity in the area is closely linked to mining as it creates
employment opportunities and economic growth – and water
is the catalyst for this development. The ORWRDP Phase 2 forms
part of the Presidential Infrastructure Coordinating Commission’s
strategic infrastructure projects, which were aimed at fasttracking
development and growth across South Africa.
The construction of De Hoop Dam was the second phase of the
ORWRDP and was first announced by President Mbeki in 2003 as
one of the flagship programmes of government’s Accelerated and
Shared Growth Initiative for South Africa (AsgiSA). De Hoop is the
13th largest dam in the country with a 347-million cubic metre
reservoir capacity.
The importance of the dam was twofold; it would be a bulk
storage facility to augment the water supply around the Steelpoort
and Olifants rivers as well as to the mines and unlock vast deposits
of platinum group metals (PGM) found in the region – the largest
known unexploited mineral wealth in our country.
While the ORWRDP was partially developed over the last
two decades, recent studies together with rising community
pressure have highlighted the need to adjust and accelerate
the ORWRDP.
In the Eastern Limb of the ORWRDP, social unrest has impacted
on communities’ access to potable water and mines and other
commercial operations’ ability to safely operate. There had also
been increasing levels of vandalism on water infrastructure.
With bulk raw water pipelines passing through communities
that have no access to water, the communities’ frustrations are
understandable. Their difficulties are further compounded by the
lack of employment, economic development and opportunities.
The concerns of the community are valid, and something needed
to be done to improve their quality of life.
The OMM Programme aims to accelerate the delivery of bulk
raw and potable water infrastructure to the Northern and Eastern
Limbs of the Bushveld Igneous Complex.
OBJECTIVES OF THE OMM PROGRAMME
Given the country and the region’s endowment of critical raw
materials, water infrastructure development is a key enabler to
create employment through the infrastructure programmes, mining
expansion and manufacturing of renewable energy technology. This
aligns with the South Africa’s industrialisation objectives.
Besides providing much-needed water to communities, the
OMM Programme will unlock the enormous strategic mineral and
industrialisation potential of the region to capitalise on the global
transition to cleaner energy. Key benefits include:
Water security. Accelerate delivery of the ORWRDP as part of
the OMM Programme and supply potable and bulk raw water to
identified areas.
Economic growth. Develop enabling infrastructure essential to
the industrialisation of the Bushveld Igneous Complex and to take
advantage of mining commodity cycles.
Job creation. Create local jobs through construction and system
operations, as well as mining developments and develop skills in
the water sector.
Cost savings. Re-sequence the build programme to utilise
existing dams and infrastructure to their optimal efficiency levels.
Fiscus support. Private sector contributions to the infrastructure
programme will provide support to the fiscus while tax revenues
will also benefit from the increased economic activity in the region.
Socio-economic development. SED in Limpopo will also be
accelerated through localisation of infrastructure and operational
spend as well as widening the skills base through local and
regional development.
Sustainability. Mandate and equip the OMM WUA to implement,
manage, operate and maintain the OMM Programme.
Replicable model. The public-private collaboration model has
the potential to be replicated across the country and other sectors.
Social harmony. Improve integration through the provisioning of
water, job creation and SED.
Water conservation. The Programme will implement behavioural
change programmes with a focus on conscious water use.
Water reuse. SED activities will prioritise sanitation and water
reuse and address wastewater treatment.
ESG footprint. The OMM seeks to make optimal use of
infrastructure resources (cement, steel, diesel, etc) to minimise
its footprint.
SUSTAINABLE DEVELOPMENT
Sustainable development is one of the key underlying concepts of
the OMM WUA’s mission, vision and strategy. The United Nations
adopted 17 Sustainable Development Goals in 2015 as a universal
call to action to end poverty, protect the planet and ensure that
by 2030 all people enjoy peace and prosperity. The 17 goals are
integrated, and it is recognised that action in one area will affect
outcomes in others, and that development must balance social,
economic and environmental sustainability. The defined OMM
Programme targets will directly or indirectly impact on all these
sustainable development goals.
SOCIO-ECONOMIC BENEFITS
Formal economic activity in Limpopo is highly diverse and is
characterised by commercial and subsistence agriculture, mining
activities, manufacturing, commerce and tourism. Large coal, PGM
as well as copper and phosphate deposits are found in the area. The
Olifants Catchment is home to several large thermal power stations
that are strategically important, and which provide energy to the
country as a whole.
A large proportion of the catchment is not economically active
(45%), with a further quarter (24%) of the population being
unemployed. Only a third of the population (31%) are employed
of which 68% are employed in the formal sector.
The OMM Programme represents a significant opportunity
for SED in the region given the extent of the infrastructure
programme across the province and its associated
capital and operational spend.
Themes to steer development
Five priority themes have been identified to steer socioeconomic
development activities, and all SED projects
within the OMM Programme will align to the themes
represented in the diagram on the left. A central hub
concept is to underpin all collaboration, to ensure inclusivity
and transparency. In terms of quick wins, the OMM
Programme aims to expand on existing SED projects (youth
leadership and entrepreneur development), work with
existing Water Service Authority projects, collaborate with
schools and build on existing technology infrastructure.
WATCH VIDEO
The five priority themes that have been identified to steer socio-economic
development activities.
Watch Bertus Bierman, CEO of Lebalelo Water User Association
in an interview with Gordon Brown, publisher of GreenEconomy.
Media.
The dam will supply water to thousands of residents as well as mines in the Waterberg, Sekhukhune and Capricorn districts.
GREEN OUTCOMES
The OMM Programme will pursue:
Renewable energy. Considering water resource availability and
regional water needs, additional studies will be conducted in the
pre-feasibility phase of the OMM Programme to further optimise
and reduce water costs through energy use optimisation and the
use of renewable energy.
Future challenges will
depend on current responses.
10
11

OUR IMPACT
PURPOSE
To safeguard global sustainability
through our metals and energy
solutions.
The difference we make in the world through our business.
Core guiding principles - the basis for all our decisions and actions.
VISION
To be a leader in superior shared value
for all stakeholders.
ESG AND SHARED VALUE
STRATEGIC FOUNDATION
C.A.R.E.S VALUES

MINING
MINING
Anglo American Plc
Cox et al. 2022
Projected demand
change for copper and
nickel requirements
for energy transition
technology. The solid
bars show the amount
of metal demand
projected for the
energy transition, while
the transparent bar
shows the actual total
demand for copper
and nickel across all
industries in 2020.
Anglo American Plc, Kumba Iron Ore, Sishen.
industry and government. The idea that the industry supplying the
technology for renewable energy is also opposing the economic
policy needed to curb emissions is counterproductive. Simple
economic modelling proves that resisting a carbon tax is the wrong
strategy for the industry.
METALS OUT, A LITTLE CO2 IN
There are many factors throughout the mining process that
contribute to carbon emissions. The commodity being mined
heavily influences the number of emissions and where the
emissions are generated throughout the mining process.
For iron and steel most emissions are generated in the later
stages during smelting. Mining copper ore, on the other hand,
generates most of its emissions in the earlier stages during the
crushing, grinding and hauling of ore.
One way to look at the impacts of carbon taxation in mining is to
compare the commodity’s carbon footprint to its economic value.
For example, the average carbon footprint of copper is 3.83 tons of
carbon dioxide per ton of copper.
So, for each ton of carbon dioxide emitted, 261 kilograms of
copper worth US$1 700, using 2019 copper prices, are produced.
This is a relatively high value. The same cannot be said for other
The economic case
for the mining industry
to support carbon taxation
Anglo American Plc
As governments try to navigate a path to a safe climate in the 21st century, the public
debate has focused on net zero, carbon taxes, electrification and renewable energy. Mining
is rarely an anchor point of the discussion, even though renewable energy infrastructure
and low-carbon technology require vast amounts of metals and minerals.
BY SALLY INNIS, BENJAMIN COX, JOHN STEEN, NADJA KUNZ*
Nickel, for example, is essential for electric vehicles and
battery storage. The amount of nickel required by 2040
for the energy transition alone will be equal to the total
demand for nickel across all industries in 2020, according to the
International Energy Agency.
There is widespread consensus among economists that carbon
taxation is one of the most effective policies to reduce carbon
emissions. Presently, 27 countries have enacted carbon taxation
policy at the national level, however only seven of these are
leading mining countries, and mining companies and industry
organisations oppose carbon taxes in many of these countries.
Addressing climate change requires a coalition between
Anglo American Plc, Platinum, Mogalawkwena North Concentrator.
14
15

MINING
MINING
One way to look at the impacts
of carbon taxation in mining is to compare
the commodity’s carbon footprint
to its economic value.
industries, like animal agriculture, where a ton of carbon emissions
corresponds to about US$125 of wholesale beef (using equivalent
2019 pricing).
HOW WOULD A CARBON TAX AFFECT MINING?
The basics of a carbon tax are that more carbon-intensive
industries will be taxed more. Our study tested three levels of
carbon taxation: US$30, US$70 and US$150 per ton of carbon
dioxide, and compared them against commodity prices in 2019.
These levels closely follow the Pan-Canadian approach to carbon
pollution pricing, which are currently set to $50 per ton and
increase $15 per year to $170 in 2030.
We modelled the impact of a carbon tax on a range of
commodities. Our model included all Scope 1 and Scope 2
emissions – direct emissions from the source and indirect
emissions associated with heating, cooling or electricity.
The production of some commodities is more carbon-intense
than others, which affects the impact of the carbon price.
In some cases, the carbon tax can be greater than the product’s
value. When the price of carbon is US$150, coal is taxed at 144%
of its value. Copper, on the other hand, is taxed at 10% of its value.
Two metals are outliers to the industry: aluminum and steel. The
mining of the raw materials is not carbon intensive. Bauxite and
iron ore generate 0.005 and 0.02 tons of carbon dioxide per ton
of product respectively but smelting these ores into metals emits
more carbon in production.
MINING FOR CARBON TAXES
Outside of aluminum refining and steel mills, the mining industry
will perform better with a carbon tax than it would without one.
This is because the carbon tax would increase the price of fossil
fuels relative to renewable energy and the materials required for
renewable energy technology.
For example, the costs of coal used for energy production will
more than double, making electricity from coal increasingly
uncompetitive. The rising demand for solar and wind power will
drive further increases in the consumption of base metals for wind
turbines and solar panels.
If implemented on a global scale, a carbon tax would not change
the underlying cost of the base metal business, but it does have
vast financial benefits for the mining sector. These benefits come
from the increased demand for metals from the energy transition,
paired with a relatively lighter percentage of global carbon taxes, in
comparison to other industries.
The impact of
three levels of
carbon taxation
(US$30, $70 and
$150) modelled
as a percentage
of present
product value
for selected
commodities.
This shows
that most
mining industry
and energy
transition
commodities
will not be taxed
to the same
degree as other
commodities.
Rather than opposing carbon taxes, the mining sector should
become a global advocate for aggressive carbon targets, the
harmonisation of international carbon taxes and pursue further
reductions to emissions such as the electrification of fleets or
carbon offsets.
SA CARBON TAX
South Africa introduced a carbon tax in June 2019 as part of
a package of policy measures to help achieve the Nationally
Determined Contribution commitments submitted under the
Paris Agreement. To assist industries to transition to sustainable
and low-carbon practices in a cost-effective manner, a carbon
offset tax-free allowance is provided to companies under the
Carbon Tax Act (No 15 of 2019) to help reduce their carbon tax
liability and encourage additional investments in eligible lowcarbon
offset projects.
The Conversation under Creative Commons License
MINING UNDER PRESSURE TO DECARBONISE OPERATIONS
In 2021, President Ramaphosa recommitted South Africa to a
series of steps aimed at reducing the country’s carbon footprint
because “the world is facing a climate crisis of unprecedented
proportions”. South Africa joins the world in this urgency as it
races to achieve net zero targets over the coming decades.
Sameer Singh, research analyst at Old Mutual Wealth Private
Client Securities, says that to reach the goal of carbon net zero,
industry at large, and diversified miners specifically, can expect
increased stakeholder pressure and must plan for business
process transformation to remain both relevant and profitable.
“Mining, as an extractive activity, leaves a long-lasting mark
on the environment. Additionally, the processes of extraction
and refining emit a substantial amount of greenhouse gases. The
mining industry specifically will see dramatic shifts in both the
demand for their products and the regulatory environment. For
some it will signal the beginning of the end, while for others it will
be the start of a new growth trajectory,” says Singh.
One miner plotting the path of mining for the future is Anglo
American. For much of the company’s existence, it had been about
expansion. The 21st century ushered in a phase of consolidation,
which saw the group shifting from operating eight business units
with multiple commodities to four key business units and six
commodity groups.
Anglo’s strategic shift started in 2015 when the miner
recognised both a change in demand as well as the inevitable
need to define a relevant and more responsible mining industry
of the future.
Singh says increased demand for platinum group metals
(PGMs) is far more than a cyclical commodity trend. “Renewable
energy, electric vehicles and battery storage, electricity networks
and other clean energy technologies require significantly greater
amounts of critical minerals than we are currently consuming.
Transitioning to and meeting this increased demand will be a key
focus for all miners over the next few decades. PGMs are integral
to the energy transition value chain, where hydrogen plays a big
role too,” he says.
Singh says the miner’s vision, which aims to build connected,
intelligent, automated and waterless mines, should see the miner
achieve “less waste, fewer inputs, reduced energy consumption
and lower capital intensity, which are all earnings accretive”.
Anglo is focusing on renewable energy generation, switching
Anglo American Plc, Platinum, water testing at Der Brochen, South Africa.
from diesel for fuel to hydrogen, battery energy storage,
limiting methane emissions, pursuing carbon efficiency and
implementing emission compensation strategies.
“When investors look at the medium and long-term prospects
of mining companies, they should do so with a future-oriented
lens and track where the miner is going relative to where the
world is going, and what stakeholders will demand,” adds Singh.
Anglo has already secured 100% renewable energy for all its
South American operations and is currently testing the mining
industry’s first hydrogen-electric haul truck.
“From an investor’s perspective, Anglo is doing all the right
things and is executing them well,” explains Singh. He adds
that 8% of the company’s long-term incentives are linked to
greenhouse emission reductions and 5% of annual bonuses are
tied to key environmental programmes.
Operationally, the group has realised an 8% improvement in
energy efficiency and a 22% saving in greenhouse gas emissions.
Earlier this year, the group concluded the spin-off of its South
African thermal coal business and announced the sale of South
American thermal coal.
By 2030 Anglo is targeting a 30% improvement in energy
efficiency, a 30% net reduction in greenhouse gas emissions, aims
to have eight carbon neutral sites and by 2040 the group aims to
be carbon neutral across all its operations.
Anglo American has signed a MoU with EDF Renewables, a
global leader in renewable energy to work together towards
developing a regional energy ecosystem in South Africa. While
there is an abundance of solar and wind power in our country,
there is limited renewables infrastructure to harness it.
*Sally Innis, PhD candidate, Benjamin Cox, PhD student, mining engineering, John Steen, ey distinguished scholar, global mining futures, Nadja Kunz, Canada research chair and assistant professor,
mining, all from University of British Columbia.
Anglo American South Africa PGM operations, such as Mogalakwena (featured), are increasingly using treated effluent, or grey water, rather than
drawing on freshwater supplies.
16
17

CoUnCIL FoR GEosCIEnCE
CoUnCIL FoR GEosCIEnCE
CoUnCIL FoR GEosCIEnCE
The Council for Geoscience (CGS) is the national custodian responsible for the collection, compilation and curation of
May
all
2022
onshore and offshore geoscience data and information. The CGS aims to use this information and knowledge to develop
geoscience solutions to real-world challenges in South Africa.
The Council for Geoscience (CGS) is the national custodian responsible for the collection, compilation and curation of all
onshore and offshore geoscience data and information. The CGS aims to use this information and knowledge to May develop 2022
geoscience solutions to real-world challenges in South Africa.
MInERaLs The Council anD for EnERGY Geoscience (CGS) is the national custodian responsible for the collection, compilation EnGInEERInG and curation GEoLoGY of all
The onshore Minerals and and offshore Energy theme geoscience data and information. The CGS aims to use this information anD and knowledge GEoHaZaRDs to develop
includes geoscience integrated solutions geoscience to real-world challenges in South Africa.
As the custodian of the national
MInERaLs mapping, anD which EnERGY is the core
seismological EnGInEERInG network, GEoLoGY the
function of the CGS. This theme
CGS
The Minerals and Energy theme
anD monitors GEoHaZaRDs and maintains
aims to attain a fundamental
a geohazard inventory for
includes understanding integrated geoscience of South
South As the Africa. custodian This of information the national
mapping, Africa’s which is the core
seismological network, the
function
MInERaLs onshore
of the CGS.
anD and EnERGY offshore
is
This theme
EnGInEERInG primarily used in
CGS monitors and
GEoLoGY developing
geology using an innovative
effective maintains
aims The to Minerals attain and a fundamental
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anD
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GEoHaZaRDs
and novel geohazard
multidisciplinary approach. The
mitigation solutions inventory promote for
understanding includes theme encompasses integrated of fundamental
geoscience South
As safe South the and custodian Africa. judicious This of the land information national use.
Africa’s mapping, geoscience onshore which mapping, and is offshore economic the core
seismological Modern primarily artificial used network, intelligence
developing the
function geology using of and the geochemistry an CGS. innovative This theme and
CGS techniques effective monitors and are novel and applied maintains geohazard
multidisciplinary aims various to geophysical attain approach. a fundamental
techniques. The
a subsidence mitigation geohazard mapping solutions inventory and seismic promote for
theme understanding These encompasses data are fundamental of integrated South
South hazards safe Africa. and characterisation.
judicious This information land use.
geoscience Africa’s towards enabling onshore mapping, South and economic offshore Africa’s
is Modern primarily artificial used in developing intelligence
geology
geology minerals and and using
geochemistry energy an security innovative
and and
effective
techniques
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applied in
various
multidisciplinary socioeconomic geophysical growth. approach.
techniques.
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mitigation
subsidence
solutions
mapping
to
and
promote
seismic
theme encompasses fundamental
safe and judicious land use.
These data are integrated
hazards characterisation.
geoscience mapping, economic
Modern artificial intelligence
towards enabling South Africa’s
geology and geochemistry and
techniques are applied in
minerals
various
and
geophysical
energy security
techniques.
and
subsidence aFRICan mapping FootPRInt and seismic anD
socioeconomic
These WoRLD data CLass growth.
are FaCILItIEs integrated
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CoLLaBoRatIons
The towards geoscience enabling functions South Africa’s of the
As the Permanent Secretariat
minerals CGS are and supported energy security by a multifacetted
laboratory growth. that performs
Geological aFRICan Surveys FootPRInt (OAGS), anD
and
of the Organisation of African
socioeconomic
WoRLD a wide range CLass of analytical FaCILItIEs services
the otHER CGS leaves CoLLaBoRatIons
an impressive
such as petrography, whole rock
footprint in the African continent
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As the Permanent Secretariat
geochemistry, petrophysics, coal
where
CGS are supported by a multifacetted
WoRLD and
aFRICan it oversees
of the Organisation FootPRInt and carries
of anD African
science
laboratory CLass hydrochemistry.
that FaCILItIEs In
WatER anD EnVIRonMEnt
out
performs
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Geological CoLLaBoRatIons
geoscience services
addition, the CGS manages a
The CGS carries out hydrogeological studies and
in line with global
Surveys
standards,
(OAGS),
a wide The geoscience range geoscience of analytical museum, functions services library, of the
aquifer modelling. In addition, the organisation carries
As international the the CGS Permanent leaves policy an Secretariat impressive and
such CGS bookshop as petrography, are supported and a national whole by a rock multifacetted
repository, laboratory all petrophysics, of which that are performs coal used
Geological where it oversees Surveys and (OAGS), carries
core
out environmental geoscience research which aims to
of governance. footprint the Organisation in the In African this of capacity, African continent
geochemistry,
science and hydrochemistry. In
WatER
provide sustainable
anD EnVIRonMEnt
solutions to monitor and mitigate the
the CGS also collaborates with
a by wide the range scientific of analytical community services and
impact of geology and mining activities on the health of
the various out CGS various academic leaves geoscience an institutions impressive services and
addition, such the general as the petrography, CGS public. manages whole rock a
The the environment CGS carries and out its inhabitants. hydrogeological studies and
footprint science line councils. in with the African global continent standards,
geoscience geochemistry, museum, petrophysics, library, coal aquifer modelling. In addition, the organisation carries where international it oversees and policy carries and
bookshop science and hydrochemistry. a national core In
WatER anD EnVIRonMEnt
out environmental geoscience research which aims to
out governance. various geoscience In this services capacity,
repository, addition, all the of CGS which manages are used a provide The CGS sustainable carries solutions out hydrogeological to monitor and studies mitigate and the in the line CGS with also global collaborates standards, with
CGs by geoscience the at scientific WoRK museum, community library, and
impact aquifer of modelling. geology and In addition, mining activities the organisation on the health carries of international various academic policy institutions and and
the bookshop general public. and a national core the out environmental and geoscience its inhabitants. research which aims to
governance. science councils. In this capacity,
• repository, The CGS all is of undertaking which are used an integrated provide and sustainable multidisciplinary solutions geoscience to monitor and mapping mitigate the programme the across CGS South also collaborates Africa. with
• by Some the scientific recent community projects under and this programme impact of geology include: and mining activities on the health of
various academic institutions and
the - Multidisciplinary general public. geoenvironmental baseline the environment investigations and its inhabitants.
the southern Karoo into the feasibility science of shale councils. gas development.
CGs at This WoRK work has uncovered previously undefined groundwater aquifers.
• The - Regional CGS is undertaking soil geochemical an integrated sampling and and multidisciplinary detailed follow-up geoscience surveys, particularly mapping programme in the Northern across Cape, South North Africa. West and
CGs at WoRK
• Some Mpumalanga recent projects Provinces. under this programme include:
-• Multidisciplinary The - Geothermal CGS is undertaking energy geoenvironmental and an carbon integrated capture baseline and and multidisciplinary investigations storage research, in geoscience the southern aiming mapping to Karoo expand into programme South the feasibility Africa’s across current of South shale renewable Africa. gas development. energy
• This Some mix
work
while recent has
decreasing projects uncovered under the
previously
country’s this programme carbon
undefined
footprint. include: groundwater aquifers.
- Regional - Ground Multidisciplinary stability and
soil geochemical geoenvironmental geotechnical assessments
sampling baseline and detailed investigations for infrastructure
follow-up the development
surveys, southern particularly Karoo in the into Northern in the feasibility Cape
Northern of and shale Free
Cape, gas State
North development. Provinces.
West and
Mpumalanga This work has Provinces. uncovered previously undefined groundwater aquifers.
- Geothermal - Regional soil energy geochemical and carbon sampling capture and and detailed storage follow-up research, surveys, aiming particularly to expand South in the Africa’s Northern current Cape, renewable North West energy and
mix Mpumalanga while decreasing Provinces. the country’s carbon footprint.
- Ground - Geothermal stability energy and geotechnical and carbon assessments capture and storage for infrastructure research, development aiming to expand in the South Northern Africa’s Cape current and Free renewable State Provinces. energy
mix while decreasing the country’s carbon footprint.
ContaCt
- Ground
Us
stability and geotechnical assessments for infrastructure development in the Northern Cape and Free State Provinces.
Our head office is located at: 280 Pretoria Street, Pretoria, 0184 I @CGS_RSA I I I
Tel: +27 (0)12 841 1911 I Email: info@geoscience.org.za I Web: www.geoscience.org.za
ContaCt Us
Our ContaCt head office Us is located at: 280 Pretoria Street, Pretoria, 0184 I @CGS_RSA I I I
Tel: Our +27 head (0)12 office 841 is 1911 located I Email: at: 280 info@geoscience.org.za Pretoria Street, Pretoria, 0184 I Web: I www.geoscience.org.za
@CGS_RSA I I I
Tel: +27 (0)12 841 1911 I Email: info@geoscience.org.za I Web: www.geoscience.org.za
May 2022
CS2022_ Advert_ CGS Services (Generic)_ Full Page (210x275mm)_ May 2022_ 20220429_ v1.indd 1 2022/04/29 09:22:53
Carbon Capture, Utilisation and Storage
in a South African context
Owing to its reliance on a coal-based energy supply, South Africa ranks globally as one of the
high emitters of greenhouse gases. The Council for Geoscience has been commissioned by
Department of Mineral Resources and Energy to pilot and prove Carbon Capture Utilisation
and Storage in our country.
BY THE COUNCIL FOR GEOSCIENCE
Early research has formulated an Atlas of Geological Storage
focussing on the prospectivity of deep saline aquifers and
depleted oil and gas reservoirs. However, given that the
major CO2 emissions point sources are located inland, primarily
in Mpumalanga and Gauteng, a shift in focus to possible storage
sites proximal to major point-source CO2 emitters was initiated.
As such, the Council for Geoscience has entered into agreements
with the Govan Mbeki Local Municipality in Mpumalanga to
establish a Carbon Capture Utilisation and Storage (CCUS) pilot
injection and storage project near Leandra. It is envisaged that
10 000 to 50 000 tons of CO2 will be injected into Archaean-age
(2 700-million-year-old) mafic and ultramafic formations of the
Ventersdorp Supergroup at depths ranging between 1 000 and
1 700m below the surface.
Mafic volcanic rocks comprise 60% of the earth’s surface and,
owing to their widespread distribution globally, are deemed
viable targets for CO2 sequestration in regions where classical
sedimentary storage options are limited. Mafic (commonly
basalts) and ultramafic units are rich in divalent cations (eg Ca2+,
Mg2+, and Fe2+) which are chemically reactive to CO2.
The addition of water, either injected with the CO2 plume, or
as formational waters, results in the formation of stable, nontoxic,
void-filling carbonate minerals such as calcite, magnesite,
and siderite. In these conditions, geological soluble and mineral
storage conditions are created significantly more rapidly than
can be achieved through conventional storage options, with
mineralisation occurring within a matter of years post-injection.
The current project identified potential target injection zones
within mafic and ultramafic volcanic rocks of the Klipriviersberg
Group which forms the base of the Ventersdorp Supergroup in
the region. The core of sixteen boreholes in the area was scanned
at the National Core Library of the Council for Geoscience
at Donkerhoek using Intellicore hyperspectral core imaging
software. The hyperspectral scanner at the library allows for
high-resolution core imaging in the Red-Green-Blue (RGB), Short
Wavelength Infra-Red (SWIR) and Long Wavelength Infra-Red
(LWIR) bands, as well as mineral and spectral classifications.
Of the scanned boreholes, two (BH2068 and BH2188) occur
within a 3km radius of the study area and were therefore
selected for detailed logging and appraisal. The boreholes
achieve adequate depths to intersect deep potential reservoir
zones greater than 800m. For basaltic injection, however, the
800m supercritical CO2 phase barrier is not of vital importance,
as evidenced by the shallow (400-800m depth) injections in the
Carbfix project in Iceland.
The current study focuses primarily on basaltic reservoir/seal
pairs located at depths greater than 800m. This allows for the
potential injection of supercritical, dry (non-water-dissolved) CO2
(as has been achieved by Big Sky Regional Carbon Sequestration
Partnership in Wallula, USA).
STORAGE
Schematic
illustration
of a possible
CCUS site
in Govan
Mbeki
Municipality.
The boreholes were logged at centimetre scale utilising RGB
and mineral composition band ratios to define potential reservoir
zones and associated seals. Cut-off values of 5m thickness, like
those used in the Wallula project, were chosen to delineate the
most prospective reservoir seal pairs. The identified pairs were
subsequently logged and sampled. Reservoir zones comprised
both ultramafic volcanic units, highly porphyritic lava flows,
highly vesicular and amygdaloidal flow-top zones, agglomerates
and flow-top breccias, whilst confining zones (cap rocks) are
defined by individual massive basaltic flows, massive basalt flow
interiors and entablature zones.
In line with international best practice, guidelines for CCUS site
characterisation requires data on porosity, permeability, water
saturation, salinity and pore pressure data to effectively define
and model potential reservoir/seal pairs within specific geological
strata. Analyses of these criteria are currently underway at the CGS
using X-ray fluorescence, X-ray diffraction, helium porosimetry,
conventional optical microscopy, scanning electron microscopy
and X-ray tomography.
Resultant porosities determined for 15 potential seal and 23
reservoir units correlate well with low apparent values defined
for confining zones and reservoir zones, respectively, within the
Columbia River basalts of the Wallula project. Results for average
envelope (bulk) density, true density and porosity are closely
aligned with findings published internationally.
Geological characterisation has defined potential injection
zones within porphyritic basalts, breccia zones and ultramafic
volcanics developed between the depth intervals of 1 000 and
1 700m. The targeted injection reservoirs are capped by massive
basalts, recognised to have low permeability. The identified
sequence of stacked reservoir/seal pairs results in a world-first
scientific opportunity to study the chemical reaction behaviour
of CO2 within Archaean (2 700 Ma) volcanic sequences. The
Council for Geoscience will continue research and development,
including extensive environmental baseline monitoring, with a
view to establishing the first pilot CCUS site in South Africa.
19

MINING
MINING
SUNSHINE IS GOLDEN
FOR THE
MINING INDUSTRY
BASF
This case study details the renewable energy solution modelled for a tailings processing
and exploration diamond mining operation. It uses certain assumptions to demonstrate
the engineering and economic feasibility of various hybrid energy approaches.
BY GLYNIS COETZEE, TOUCHPOINT ENERGY*
CASE STUDY: RENEWABLE ENERGY SOLUTION FOR MINE
Technical and commercial review for a solar photovoltaic and battery energy storage hybrid
project to supply a South African based mine.
Storage projects in Varel, Lower Saxony, Germany using NaS (sodium suphur) batteries. For more information on NaS batteries in South Africa,
please email Lloyd Macfarlane, Altum Energy at lloyd@altum.energy.
PROBLEM STATEMENT
The mine operation, which runs crushing and sorting machines,
water processing and purification as well as general mining
processes has a monthly electricity bill of between R3.5-million and
R5-million, comprising and inclusive of usage charges in cents per
kWh consumed, network demand charge in cents per kWh, as well
as other service and ancillary charges at fixed rates.
The primary objective of this project’s first phase is to lower
the electricity consumption and therefore usage costs of the
mine operation and improve the yield, by the installation of a
photovoltaic (PV) solar energy generation system. This PV solar
system is intended to provide cheaper electricity, generated from a
renewable resource and, if economically viable, provide non-fossil
fuel security of supply, by the additional installation of an energy
storage system (ESS) to mitigate load shedding and other outages
that may occur periodically due to lightning strikes or other
unforeseen events.
BATTERY ENERGY STORAGE SYSTEM
A battery energy storage system (BESS) has been selected to meet
these objectives. Both Lithium Iron (Life) and Sodium Sulphur
(NaS) BESS options were examined to determine the optimum
Levelised Cost of Storage (LCOS) in this application. The ratio split
between off-peak, standard and peak usage costs are calculated
as a percentage of the total consumption to provide a basis
for modelling the application of the BESS. The NaS BESS was
selected as the NaS economics are advantageous when compared
to LiFe under these conditions and is most suitable for the
six-hour option, while the LiFe BESS is more suitable for a twohour
backup.
The addition of a BESS to provide uninterrupted power for the
full 24-hour operational cycle, essentially creating a fully gridindependent
energy usage scenario, would potentially allow for
a lowering of the network maximum demand (NMD) charges by
lowering the peak. Due to the initial CapEx costs, this would likely
have the nett effect of increasing the usage tariff above the current
Eskom tariff, diminishing the cost savings, thus the focus is on
operational expenditure cost saving for now.
CHALLENGES AND ASSUMPTIONS
The primary challenge is to ensure that the solution is financially
beneficial to the operation by being able to offer a reduced
tariff on a power purchase agreement (PPA) for a set period. In
this instance, it is assumed that there will be a 15-year PPA –
reducing the period further will have the effect of increasing the
proposed tariff.
The mine is on a Time of Use (ToU) tariff of Ruraflex Interval
and to determine the competitive levelised tariff which must be
achieved, the breakdown of percentage usage in each of the ToU
periods is applied (see Figure 2). This is a typical usage breakdown,
but further savings are achievable by planning the battery storage
to peak save.
RURAFLEX - NL 22/23
The mine is an open-cast prospecting mineral and tailings
crushing and processing operation, situated in the
Northern Cape region, of South Africa, and operates
24 hours per day, seven days a week. The mine electricity
supply is grid-connected directly to the Eskom grid and could
potentially export energy via the local 10MW substation,
approximately 15km away from the Point of Connection (PoC)
to the mine incoming supply. The mine has several diesel
generators on site that provide electricity supply backup in the
event of outages.
The load profile is essentially flat at a peak demand of 4.8MW
(see Figure 1). There was planned maintenance over the lower
consumption period, which is an anomaly to be ignored for the
purposes of this model.
5000
4000
3000
2000
1000
0
D J F M A M J J A S O N D
Figure 1. Annual peak demand graph.
Extra c/kWh Tariff 22/23 Import
0.3474 1.53 LowPeak 12% R1.88
0.3474 0.6676 LowOff 18% R1.02
0.3474 1.0528 LowSTD 51% R1.40
0.3474 4.6899 HighPeak 2% R5.04
0.3474 0.7714 HighOFF 4% R1.12
0.3474 1.4209 HighSTD 12% R1.77
Average 100% R1.5036
Figure 2. Comparative Eskom tariff.
20
21

MINING
MINING
Under the PPA proposal, Touchpoint Energy builds, owns,
operates and maintains the entire PV solar generation system until
the end of the PPA period, whereafter it reverts to the mine at no
cost. The mine can then either choose to continue to operate the
system, potentially under a Service Level Agreement with the
original or a new Independent Power Producer, or may require a
decommissioning of the system.
Other assumptions are as follows (including but not limited to):
• All land area required – between 15HA and 22HA – is available
for development of the PV solar facility and BESS installation for
the options described
TECHNICAL AND COMMERCIAL SOLUTIONS
Option A: 5mw load plus six-hour battery backup
This option sizes the PV solar generator at 10MW/11MWp to ensure that the NaS 250-1500kWh BESS can be charged using the
PV during daylight generation hours. This option provides for six hours of BESS backup, which would allow for further reduction
of the use of power from Eskom. Because of the mine’s 24-hour operation, the stored battery energy could be used during the
peak morning and peak evening times, thus reducing the reliance on the expensive Eskom electricity.
Low demand season
Peak times in low and high demand season.
Municipal vs Touchpoint Energy costs per year.
• 10MW connection size
• Operation and maintenance (O&M) as well as insurance costs
are included in the financial model
• Financial model assumes that the full production will be
purchased (take-or-pay)
• P50 yield figures have been used in the financial model
• Escalation for the tariff from Eskom is projected at a regular10%
increase per year
• Exchange rates assumed at R14.85/U$D
High demand season
23 24 1 23 24 1
22 22
2
WEEKDAYS
WEEKDAYS
21 21
3
20 SATURDAY
4 20
SATURDAY
4
19 5 Peak 19
5
Standard
SUNDAY
18 SUNDAY
6 18
6
Off peak
17
17
7 7
16 8 16
8
15 9 15
9
14 10 14
10
13 11 13
11
12 12
Commercial feasibility
The financial model based on the above design produces the following feasibility for the project, while achieving the desired return
for the investor.
• Project cost approximately R235-million
• Touchpoint Energy tariff is at 135.25c/kWh against the levelised Eskom tariff of 150.36c/kWh
• Annual escalation at 6% against an escalation of >10% by Eskom
The mine would enjoy immediate starting savings of more than 10% on existing levelised tariff over the period of renewable
energy production, as per the savings graph below. Cumulative savings over period of the PPA – usage only, excluding any
potential savings on NMD – amounts to more than R352-million.
2
YEAR
3
USAGE SAVINGS
/ MONTH
USAGE SAVINGS
/ YEAR
2023 R283 674.75 R3 404 097.01
2024 R411 959.41 R4 943 512.88
2025 R558 14906 R6 697 788.67
2026 R724 269.96 R8 691 239.47
2027 R912 559.62 R10 950 715.39
2028 R1 125 487.96 R13 505 855.56
2029 R1 365 780.61 R16 389 367.26
2030 R1 636 444.35 R19 637 332.22
2031 R1 940 795.26 R23 289 543.08
2032 R2 282 489.39 R27 389 872.71
2033 R2 665 556.64 R31 986 679.69
2034 R3 094 437.78 R37 133 253.39
2035 R3 574 025.21 R42 888 302.49
2036 R4 109 707.60 R49 316 491.23
2037 R4 707 418.99 R56 489 027.83
Option B: 5mw load plus two-hour battery backup
This option sizes the PV solar generator at 6.3MW/7.4MWp with the addition of an 8.4MWh LiFe BESS. This option provides for two
hours of BESS backup for load shedding mitigation, which could allow for a reduction of the use of the expensive peak time power
from Eskom at the beginning and/or end of the day.
Commercial feasibility
This financial model produces the following feasibility for the project while achieving the desired return for the investor.
• Project cost approximately R125.5-million
• Touchpoint Energy tariff is at 112.75c/kWh against the levelised Eskom tariff of 150.36c/kWh
• Annual escalation at 6% against an escalation of > 10% by Eskom
The mine would enjoy immediate starting savings of 25% on existing levelised tariff over the period of renewable energy
production, as per the savings graph below. Cumulative savings over period of the PPA – usage only, excluding any potential
savings on NMD – amounts to approximately R315-million.
Municipal vs Touchpoint Energy costs per year.
Both options provide considerable savings for the mining
operation, reduce the company carbon footprint and increase
the yield for the mining operation with no capital outlay so
that the mine company can focus on its core business.
ADDITONAL BENEFITS
An added benefit of the project would be the reduction of the
operation’s carbon footprint, as well as the potential for job creation
in the area used for the basic maintenance of the installation. The
resultant CO2 annual saving is approximately 15 665 tons per year
for Option A and 23 226 tons per year for Option B.
YEAR
USAGE SAVINGS
/ MONTH
USAGE SAVINGS
/ YEAR
2023 R476 231.18 R5 714 774.21
2024 R578 638.68 R6 943 664.12
2025 R694 007.94 R8 328 095.32
2026 R823 754.98 R9 885 059.73
2027 R969 441.01 R11 633 292.07
2028 R1 132 786.92 R13 593 443.00
2029 R1 315 689.11 R15 788 269.30
2030 R1 520 236.88 R18 242 842.55
2031 R1 748 731.51 R20 984 778.16
2032 R2 003 707.24 R24 044 486.83
2033 R2 287 954.20 R27 455 450.37
2034 R2 604 543.71 R31 254 524.47
2035 R2 956 855.90 R35 482 270.85
2036 R3 348 610.15 R40 183 321.82
2037 R3 783 898.34 R45 406 780.07
*Touchpoint Energy is part of the Genesis Group: projects@genesis-eco.com.
22
23

MINING
MINING
Global standard prioritises
better management of water
With water posing a significant risk to the stability of a tailings storage facility, the Global
Industry Standard on Tailings Management places significant focus on water management
as part of its sweeping realignment of what global stakeholders now expect of mines.
BY PETER SHEPHERD, SIMON LORENTZ, LINDSAY SHAND, SIMON BRUTON, SRK CONSULTING
become more resilient to climate change, they will need to carefully
balance the likely risks against rising infrastructure costs.
Monitoring and controlling water-related variables on TSFs
means applying appropriate instrumentation for water level
sensors – in dam levels as well as in outflow structures. Mines
have been paying more attention to these aspects, including the
increased use of automatic water level sensors within TSFs, flow
measurements in drains and trenches and in site-wide reticulation.
The GISTM will undoubtedly lead to an acceleration in this
trend as well as the frequency of monitoring. Rather than monthly
or weekly analyses of data collected, this should ideally be done
continuously in real time using telemetry monitoring systems.
This will require mines to scrutinise the gaps in their monitoring
and metering network more closely to ensure that the resulting
data can effectively inform short-term and long-term actions.
SRK Consulting
These requirements include aspects such as diversion of
clean water away from the tailings complex, capturing
and containing water that falls within the tailings storage
facility (TSF), measuring and recording of flow data and
simulating the likely effects of climate change. Being a key
element in the transportation of tailings, water has in recent
years received more attention as mines work to reduce the
water volumes reporting to tailings facilities while increasing
the volumes that can be re-used in the processing plant.
The rainfall that falls directly onto the TSFs needs to be managed
and stored in a safe manner. The water should be drained through
the penstocks and drains safely and quickly to reduce the risk of
overtopping the TSF basin walls. The Global Industry Standard
on Tailings Management (GISTM) also highlights that the water
balance model and the associated water management plans must
be applied throughout the structure’s lifecycle, even in perpetuity,
to protect against unintentional release and this requires stochastic
as well as historical water balance modelling. As mines look to
Beyond the on-site water
balance and actual water volumes
and fluxes in the TSF, best practices in water
management emphasise a broader
water stewardship approach.
SRK Consulting
SRK Consulting
A conventional gold tailings dam with steeper slopes, benches and extensive erosion features.
Measuring surface runoff from vegetative covers on a tailings dam
side slope.
Construction of a large lysimeter for measuring infiltration and
evaporation from covers on a waste rock impoundment.
Measuring evaporation from the surface of platinum tailings using the
surface renewal technique.
Responding to the GISTM’s water balance concerns will need
a better understanding of evaporation fluxes and variability.
Measuring evaporation from TSFs is a field of growing interest
and research, with important gains being made in the scientific
assessment of what has previously been an estimation.
While annual potential evapotranspiration (PET) in semi-arid
environments like southern Africa reaches volumes often
exceeding three times the annual rainfall, the actual evaporation
volumes from the TSF are controlled by the hydraulics of the
porous medium. An improved knowledge of evaporation effects
assists design engineers to understand the development of the
pore water flow within the body of the TSF – allowing better
assessments of TSF stability to be made.
Beyond the on-site water balance and actual water volumes
and fluxes in the TSF, best practices in water management
emphasise a broader water stewardship approach. A leading
mining company has even targeted zero-use of fresh water in its
mines, recognising that water conflict could threaten its social
licence to operate. These pressures for water stewardship beyond
GISTM standards speak to trends emerging in the public space,
guiding mines to adopt water strategies that will build resilience
within the business. In future, such an approach is likely to be vital
when accessing finance and markets.
www.srk.co.za
Click here to visit the GISTM site
24
25

MINING
TSF FAILURE:
standards for response and recovery
Even with the range of mitigation measures applied by mines to ensure that tailings storage
facilities are safe, the Global International Standards on Tailings Management highlights
that catastrophic failure may still occur – and outlines how mines should then respond.
BY ANDRIES FOURIE, EDRIE DU PLESSIS, SRK CONSULTING
The Global International Standards on Tailings Management
(GISTM) covers actions that many mines already apply
when adopting a best practice approach. These include a
site-specific Emergency Preparedness and Response Plan (EPRP)
for the tailings storage facilities (TSF), based on credible flow
failure scenarios. Such scenarios would predict the possible
inundation area, the time of arrival of tailings flow after a breach
and the depth of flow. The standard takes it further, however. In
addition to providing an effective immediate response to save
lives, mines are also called upon to provide humanitarian aid and
minimise environmental harm.
Emergency readiness and response can be regarded essentially
as disaster management, a field that is well recognised legally
in most countries (for instance, by South Africa’s Disaster
Management Act) and supported internationally by the United
Nations. Significantly, the scope of responsibilities within this
field is usually well beyond the capacity of an individual mine,
so collaboration with other stakeholders is a vital element of an
effective response. Such interaction, however, is often complex.
The effectiveness of communicating the importance of testing
and review as a risk reduction measure must be undertaken with
various stakeholders, also considering the risk rating of the TSF.
Comparing this to safety belts in motor cars, everyone should
wear one as a risk reduction measure, but the driver should still
drive with caution.
Starting at mine level, an EPRP firstly demands close cooperation
between engineering and social teams – to ensure that the
plan has technical integrity and can be both informed by and
communicated to local communities and relevant stakeholders. In
SRK Consulting
Disaster
management
continuum.
Significantly, the scope of
responsibilities within this field is usually
well beyond the capacity of an individual
mine, so collaboration with other
stakeholders is a vital element
of an effective response.
addition to being documented, the plan also needs to be tested or
simulated; regular drills, for instance, need to be prioritised, while
recognising that engagements like these can only be implemented
on a foundation of trust and collaboration.
Key to the GISTM requirements is meaningful engagement
with employees and contractors on the EPRP, and “co-developed”
community-focused emergency preparedness measures with
project-affected people. In line with disaster management
principles, mines also need to coordinate with public sector
agencies, emergency services (first responders) and local
authorities to harness the scale of resources necessary for an
emergency response. In South Africa, the role of the National
Disaster Management Centre would be important. These
stakeholders, according to the standard, should also help identify
gaps in capability – to improve preparedness.
The GISTM’s inclusion of humanitarian aid highlights the
need for a well-coordinated joint response to TSF failure, as
this function would certainly require levels of resources and
specialised expertise outside a mine’s capability. The same could
be said of the GISTM’s Principle 14, which requires mines to
prepare for long-term recovery after a catastrophic failure. Here,
the requirements include applying and assessing post-failure
response strategies; planning for reconstruction, restoration and
recovery plans; the participation of affected people; and ongoing
monitoring and reporting.
Emergency preparedness and response places onerous
demands on mines, among them the cost implications of an EPRP
and recovery actions. Mines may also be uncertain about the
capacity of government agencies – including local government –
to play their role in an emergency response. The remote location
of many mines is likely to complicate a meaningful response
by humanitarian agencies. The solution must nonetheless be
built on good communication and collaboration with local
communities and key stakeholders. The advent of the GISTM is a
signal to industry that the world has changed, and the standard
provides a demanding, but exciting, opportunity to raise the bar
in tailings management.
www.srk.co.za
26

MINING
OPPORTUNITY FOR AFRICA
to fill the commodity gap
Forecasts suggest that the global economy is facing a “commodity gap” soon as the demand
for battery minerals could outstrip supply. Could Africa be the continent to fill that gap?
BY SRK CONSULTING
There is certainly good reason to see Africa making a valuable
contribution to future supplies of mined commodities from
lithium, cobalt, nickel and graphite to manganese, iron, copper,
chrome, uranium and aluminium, according to SRK Consulting
director and principal consultant Andrew van Zyl. While there are
considerable resources of these minerals available in Africa and even
currently being mined, there remain challenges which prevent their
economic extraction.
“One of the reasons why the gold sector thrives in many parts
of Africa, for example, is because it needs relatively little in the
way of national or state-managed infrastructure,” says Van Zyl.
“For better or worse, a gold mine can operate quite effectively
as an ‘island’ of activity and prosperity – providing most of its
own inputs to mine and process ore, and to transport the very
compact end-product.”
By contrast, many of the commodities that are now growing
in demand are bulk minerals that need extensive road, rail and
harbour infrastructure – so they can be transported efficiently
and shipped to customers from functioning ports. Planning and
developing such facilities require more than capital, he argues.
They rely on far-sighted government policies being implemented
by well-resourced state bodies – combined with collaboration
from the private sector and international funding agencies.
They also call for close working relationships between
neighbouring countries, with the necessary shared vision and
practical protocols to allow railways, powerlines and goods of all
descriptions to pass over borders with minimal effort and at the
lowest possible cost.
Further, with the African Continental Free Trade Area (AfCFTA)
agreement having come into effect, this should also expedite
matters. “The start of trading under the AfCFTA agreement in
January 2021 marks the dawn of a new era in Africa’s development
journey. Over time, AfCFTA will eliminate import tariffs on 97%
of goods traded on the continent, as well as address non-tariff
barriers,” says ESG partner Darryll Kilian.
There is little question that the minerals of the future are to be
abundantly found in Africa, adds Ivan Doku, principal resource
geologist and country manager for SRK Ghana.
“There is plenty of opportunity for exploration and mining of
battery minerals in West Africa, as we have been discovering in
Ghana,” says Doku. “The country is becoming an interesting place
to explore right now, having not been historically associated with
battery minerals. A significant lithium deposit is currently being
investigated – the only one so far in West Africa.”
He says deposits like these have attracted considerable foreign
interest, and it is likely that more prospective investors will be
looking at the region as data once this project was published.
Van Zyl highlights that the condition for – and impacts
from – large, bulk mineral projects extend not just to physical
infrastructure but to communities. Mines with larger footprints
and longer supply chains upstream and downstream also affect a
wider natural and human environment.
“For these projects to be sustainable in terms of ESG, developers
need to navigate complex terrain related to regulatory compliance
and social licence to operate,” he says. “This assumes a level of
certainty in the expectations of the host country, as well as a high
level of scientific and engineering skill being available to help
mines identify and mitigate the related risks.”
He says Africa is gradually developing the capacity to deliver
on these requirements, and the continent needs to share the
professional expertise that is available across its borders and from
the global community.
“It is important to remember that Africa has made great strides
in a range of facets, and we are successfully producing a large
range of minerals, including bulk commodities,” attests Van Zyl.
“This is something that few developed economies have achieved
and, while SRK is focusing on further improvement in Africa, it is
also contributing its expertise to other developed economies that
are struggling to establish mining industries.”
Environmental scientist Wouter Jordaan notes that SRK Consulting's
business model is set around collaboration between its
global consulting practices to ensure that the needs of its clients
are met. For example, SRK has embarked on a strategic approach of
servicing its Chinese clients in Africa, particularly in the Democratic
Republic of Congo and Zambia, from its offices in Lubumbashi,
Beijing and Johannesburg.
SRK Consulting’s longer-term vision is aimed at establishing
a dedicated resource from China in its Lubumbashi office. This
provides the opportunity to engage with clients at head office
and mine level, thereby providing the relevant expertise required
at each level. To strengthen these links, the SRK South Africa, DRC
and China team will be attending the Mining Indaba in May and
DRC Mining Week in June. The collaborative effort will also look at
infrastructure projects within the region.
29

MINING
MINING
Winning with the right
PROCUREMENT
LOCALISATION
South Africa’s economy is under intense pressure and the outlook appears to be eroding.
Operating amid an economic slump, mining could improve the country’s financial outlook
while also helping to achieve its social objectives with a focus on shared value.
BY KEARNEY CONSULTING*
South Africa has undertaken a bold programme to entice
investors with the promise of building an economy
underpinned by inclusive growth, competitiveness and
transformation. With vital strategic importance, the government
has challenged the mining and mining-related industries to
play a central role in helping the country achieve its social and
economic objectives.
Because policy and regulatory changes such as the Mining
Charter III compel the industry’s players to prioritise the national
agenda, forward-thinking mining companies will commit to a
transformation with inclusive growth (see figure 1).
To preserve the social license to operate by balancing approval
from local communities and the management of legislative
pressures, South Africa’s mining companies often invest in social
AT Kearney Analysis
impact initiatives at national and site levels, including charitable
giving or risk mitigation programmes.
Although these initiatives can create social benefits, they
generate minimal levels of sustainable socioeconomic value.
Local supplier bases become saturated and organisations waste
significant amounts of money on programmes that eventually
fail. As a result, the industry is missing out on potential advantages,
including from local procurement.
Capturing and sustaining a competitive advantage will require
embracing a shared value agenda – one that benefits not only
the mines but also the communities in which they operate.
What’s needed is a strategy that addresses the national priorities
of inclusive growth and transformation. Procurement can be the
driver and enabler for this transformation.
Three steps to procurement excellence.
ASSESS LOCALISATION PRIORITIES
The 2019 Kearney Foreign Direct Investment Confidence Index
reveals that several factors influence decisions about where
to invest. Among the top 10 factors are R&D and innovation
capabilities, security and crime, transparency and efficiency of local
government regulations, the strength of investor and property
rights, government tax incentives and investment promotion as
well as the efficiency of legal and regulatory processes. These
factors highlight the vital role the government can play in creating
an environment that supports investor confidence.
In South Africa, where social issues are becoming more
prevalent, organisations must strategically position themselves
to capture benefits from these changes and build a sustainable
competitive advantage. For mining companies, this translates
into emphasising strategic areas that align with the societal
context and developing viable, local supplier bases.
Developing economies face a variety of country-specific
challenges in their supply chains, restricting the achievement
of procurement objectives. For example, the supply chain has
a shortage of local suppliers and insufficient core capabilities
and resources. These characteristics have instigated change in
the operating environment, including new legal requirements,
as outlined in South Africa’s Mining Charter III, as well as social
requirements to operate within a community.
The procurement function can react to these changes and
ensures operational efficiency by shifting the fundamental
approach to supplier management. By developing an understanding
of local issues and collaborating to develop mechanisms
that address these issues, procurement teams can develop
practices that facilitate the creation of shared value.
In a developing economy, procurement plays an instrumental
role in developing existing suppliers and establishing new ones.
To generate shared value, the procurement team must be
committed to resolving core social issues with tailored solutions
that deliver a substantial, sustainable impact. Context-specific
initiatives as well as a localised approach are essential to
delivering shared value and achieving procurement objectives
alongside sustainable social development in the community.
Done right, localisation can be a win-win: making a significant
socioeconomic impact throughout the community while creating
numerous benefits for the organisation, including shorter lead
times, higher-quality products and services, lower costs and even
attracting investors and improving related industries.
Localisation programmes are
inherently complex, requiring real
organisational transformation.
AT Kearney Analysis
AT Kearney Analysis
Note: Sectors have been ranked based on industries that have high impact and ease of influence scores relative to other sectors. Impact and
attractiveness points to the relative contribution by the industry in terms of GDP and the multiplier effect it has within the economy. Ease of
influence is based on structural advantage and the ability to have impact quickly.
Four factors to consider when localising procurement.
30
31

MINING
AT Kearney Analysis
Reliable Support Structures for PV Module Installation Projects
Four archetypes of suppliers.
ADAPT TO UNIQUE LOCAL NEEDS
After assessing the localisation priorities, the procurement function
must be able to identify and map the right suppliers across the
category strategies. Four archetypes of suppliers reveal that substrategies
that consider local characteristics are required when
defining a localisation programme.
In South Africa, this means considering Broad-Based Black
Economic Empowerment (B-BBEE) policy as well as the sectorlevel
requirements in the Mining Charter.
A sustainable localisation strategy requires a portfolio of local
suppliers with all four archetypes. Each region has a unique
subset of suppliers classified along the four archetypes; some
regions have all four, while others have suppliers that are mostly
in one archetype.
It is important to bear in mind some principles for customisation.
First, when dealing with unions, focus on protecting people, not
jobs. In other words, prepare people for current and future jobs (if
current ones are doomed to disappear). Job projection per se is not
sustainable as the company will bear unnecessary costs.
Second, combine short-term and long-term perspectives.
Focus on sharing gains, not giving handouts, which have an
ephemeral impact. With the ubiquitous presence of social media,
individuals can quickly coordinate flash strikes or supply chain
disruptions. Without decisive actions, mining companies will
be facing an increasing pressure to meet ad-hoc demands from
well-coordinated pressure groups. In the long run, plan to ensure
local economic viability even after site closure.
The next step is to align the procurement organisation for
successful execution.
ALIGN WITH GLOBAL BEST PRACTICES
In leading organisations, procurement is aligned with gaining
a competitive advantage by leveraging the market value that
already exists within the supply chain. This results in achieving
procurement’s primary focus: improving the organisation’s overall
profitability with sustainable cost reduction and substantial
revenue growth. In South Africa, companies must address
shortcomings in the supply chain, leverage their procurement
function to grow shared value and prioritise engagement
with local issues. This will require enhancing procurement’s
capabilities to drive localisation.
Many companies report on financial, social and environmental
results without analysing the connections between business
performance and social impact. Often there is no comprehensive
assessment of the organisation’s performance and distributed
cash is often tracked but with no outcomes achieved – inhibiting
the full potential for growth and multifaceted strategies.
*Authors: Theo Sibiya, partner; François Santos, partner; Sujeet Morar, principal.
32
The first step is to assess the strengths of the procurement
function compared with best practices for executing a localisation
strategy. This will require benchmarking the function against
global standards.
Forward-thinking companies assess the social impact of their
localisation strategies by defining the key performance indicators,
measuring the interaction of business and social results. This
is a twofold process. First, understand the full financial impact
of interventions, including both benefits and costs, to expose
materiality and justify shared value activities. Second, use a
model to determine the social impact on the community.
Delivering value through procurement processes requires
three elements: team, category and supplier management
excellence. The leaders typically achieve superior returns from
supply management with a clear focus on these elements,
delivering a broad range of strategic value, including innovation,
risk management and talent development.
High-performing procurement teams play a proactive role in
contributing to executive strategy and demonstrate leadership
in containing costs and creating value. This requires that most of
the team effort is focused on strategic activities and is supported
by standardised, automated processes. In addition, analytics is
essential to generating timely insights, which can be fed back
into the strategy. Leading organisations use analytical tools
to gain access to up-to-date spend data, track a wide range of
procurement key performance indicators and conduct an endto-end
value chain analysis. This will accelerate time to insight
so that the right shared value decisions are made.
Driving category excellence requires not only a clear focus on
costs, but also the identification of vital business insights. This is
achieved with high visibility into category and supplier spend and
the ability to source and influence more than 70% of the spend.
Prerequisites for this are robust sourcing processes and clear
category strategies for key spend areas.
Achieving supplier management excellence requires a welldefined
supplier relationship process that yields high rates of
compliance and value. Well-managed supplier relationships
contribute to a competitive advantage by offering innovation
and risk management through a robust collaborative process.
Once the AAA road map is defined, the next step is to steer the
company in the right direction.
THE FOURTH A: ACTION
Localisation programmes are inherently complex, requiring real
organisational transformation. The chief executive officer’s active
participation along with the commitment of senior management
is essential to success.
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MOBILITY
MOBILITY
EV BATTERY SUPPLY CHAIN
Trends, risks and opportunities
in a fast-evolving sector
Global electric vehicle demand has risen rapidly over the past five years and the increase
in sales will be exponential over the next decade. Electric vehicle battery supply chains are
under immense pressure to scale and keep pace with the heightened demand.
www.iea.org
BY FITCH SOLUTIONS*
Fitch Solutions forecasts global electric vehicle (EV) sales to
reach over 26.7-million units in 2030, representing yearon-year
growth of 379% from 2021. More importantly, the
annual global demand for EV batteries, in terms of total global
capacity, is expected to reach 1 925GWh by 2030, an increase of
688% from 244.7GWh in 2021.
In response to this demand, automakers have been pressured
to adapt their model line-ups and associated supply chains
(especially as it pertains to EV batteries and their sub-components)
to ensure that they are best placed to capitalise on this
elevated demand outlook over the coming decade and beyond.
EV demand has also been bolstered by the global drive towards
decarbonisation. Many auto manufacturers have established
clear targets that aim for either total or partial electrification of
their fleets.
Commitments were made by some automakers at the COP26
conference, including GM, Ford, Mercedes, BYD, Volvo and JLR,
which all committed to entirely zero emissions new car and van
sales by 2040. Governments have also driven global demand
for EVs, as EV adoption is a critical component of governments’
climate targets.
Disruptions caused by pandemic-related shortages and price
spikes in the commodities used in lithium-ion batteries (LiBs)
have created bottlenecks and heightened competition among
automakers to secure necessary stocks of these components.
EV supply chain resiliency will be a chief concern in the near
term as it will be essential for automakers to employ a range of
strategies at the upstream, midstream and downstream stages
if they are to secure sufficient materials and components
necessary to meet their electrification targets.
USD/Wh capacity
Annual averages based on comissioning year
Illustrative trend
Announced capital costs per unit of new EV and energy storage battery
manufacturing capacity, 2010-2019.
www.iea.org
Broadly, ongoing structural shifts in global supply chains have
presented key challenges that have politicised the EV battery supply
chain. Factors such as Covid-19 exacerbating anti-globalisation
sentiment, geopolitical tensions between the United States and
China, changes in consumer tastes and preferences, and rising
wages in China have presented major political and structural
challenges to EV battery supply chains.
These challenges are particularly overt at the upstream level.
The rise in EV demand has spurred competition among EV and
EV battery manufacturers to secure access to the critical raw
materials (CRM) used in LiBs, most notably lithium, cobalt and
nickel. In particular, the access to lithium, cobalt and nickel
supplies are characterised by several supply chain risks.
These risks mostly centre around EV battery manufacturers’
dependency on a concentration of mining and refining sites in
a relatively small number of countries. According to data from
BNEF, China has control of 80% of the world’s raw material refining
capacity, 77% of the world’s battery cell production capacity and
60% of the world’s EV battery component manufacturing.
A particular trend is that EV
automakers are investing heavily
into the localisation of their
supply chains.
Commissioned EV and energy storage lithium-ion battery cell production capacity by region, and
associated annual investment, 2010-2022.
Vehicle and battery manufacturers are also facing ESG-related
risks as the mining methods in certain countries, such as the
Democratic Republic of Congo (where 70% of the world’s cobalt
mining takes place), have been criticised because of human
rights concerns and unsustainable mining practices. As a result,
the entire EV battery value chain manufacturing landscape,
from CRM extraction to battery and EV manufacturing, will
change significantly in the coming years, as developed markets
aim to reduce their ESG-related supply chain risks and their
dependency on China, which dominates parts of the upstream
and midstream supply.
Companies have taken various actions to secure their EV
battery supply chains. A particular trend is that EV automakers
are investing heavily into the localisation of their supply chains.
This is evident in the midstream where, as of November 2021,
there is a total of 145 EV battery factories that are either operating
or undergoing construction across 28 markets. This includes
51 construction projects in Europe, totalling 1 230GWh, and 29
in the US at 488.2GWh. These projects are key enablers in the
localisation of EV battery supply chains; by offering automakers
a nearby supply of LiBs, local gigafactories will reduce firms’
dependency on foreign suppliers and the string of downside risks
ingrained in global supply chains.
Localisation is also occurring upstream with automakers and
EV battery manufacturers employing various strategies to
develop local supplies of CRMs near manufacturing sites.
Governments are driving localisation by enacting policy that
aims to consolidate domestic supply chains. Notable examples
include the Joe Biden administration’s USD6-billion stimulus
package for EV supply chains and the EU’s “European Battery
Innovation” project, which will provide about EUR2.9-billion in
subsidies to build the bloc’s domestic EV battery manufacturing
capacity and reduce its reliance on Asia for LiBs. Consequently,
localisation will be a leading trend in EV battery supply chains over
the next decade.
Renewable energy will become a major pull-factor for EV
battery manufacturers in the near term. Battery manufacturing
is a capital and energy-intensive process – it therefore behoves
firms to produce in markets with abundant access to affordable
renewable energy in order secure funding (given the growing
34
35

MOBILITY
MOBILITY
importance of ESG) and to ensure the sustainability of EVs.
Consequently, the primary pull-factor for EV battery manufacturers
(outside of government support) is expected to shift from
labour cost/availability to renewable energy cost/availability
and sustainability. This is because automakers and their large
commercial clients have put in place their own sustainability
strategies which will add increased pressure on their component
suppliers to become more sustainable. This will include sourcing
more ethically produced materials, using renewable energy and
reducing the carbon footprint along their own supply chains.
A final key trend in EV battery supply chains is EV battery
recycling. Recycling presents several upside risks to the EV supply
chain. By enabling automakers to re-use the CRMs in EV batteries,
recycling offers an affordable, reliable and local supply of CRMs,
which tapers automakers’ exposure to supply chain risks and
reliance on the mining industry for regular supplies of expensive
metals. Recycling is also an attractive process, particularly to
governments and private sector firms, as by diverting LiBs
away from landfills recycling contributes to an organisation’s
sustainability efforts.
A recent autos investment round-up on battery recycling
shows how this industry is expected to experience exponential
growth over the next five years, given that a wide array of actors
is investing heavily into the sector, including automakers, LiB
recycling start-ups, battery manufacturers, as well as chemical
recycling, energy and mining firms. It is predicted that the
industry will grow exponentially over the next decade given its
ability to mitigate some of the risks that are currently hampering
EV battery supply chains.
www.fitchsolutions.com
HIGHER METALS COSTS TO NEGATIVELY IMPACT MARGINS
Electric vehicle (EV) battery prices will remain high in 2022
because of elevated battery metals prices due to increased
demand amid the race to electrify the global vehicle fleet. As
battery metals remain one of the largest contributors to the cost
of battery manufacturing, higher prices in 2022 will squeeze
the profit margins of manufacturers and automakers alike as
more EV models are deployed. Higher input costs are expected
to result in upside risks for battery prices in 2022 as long-term
agreements with mining firms for the supply of key metals are
entered into at substantially higher prices compared to 2020.
Over the longer term, developments in the increase of battery
recycling will lead to a more favourable battery metals supply
outlook as a “closed-loop” environment offers better pricing
mechanisms amid more metals being reused in newer EVs going
forward. It is forecasted that global EV sales will rise by 40.3% in
2022 as demand remains elevated amid the need to decarbonise
the global vehicle fleet.
In the meantime, the shift towards more cost-effective Lithium
Iron Phosphate (LFP) battery chemistries to tame the rising costs
associated with nickel-rich chemistries is likely. The global share
of EVs that use LFP battery chemistries should rise from 21.1%
in 2021 to 30.3% by 2025. Higher costs of nickel-rich battery
chemistries, such as the nickel manganese cobalt (NMC) and the
nickel cobalt aluminium (NCA) chemistries, will necessitate the
shift towards the more cost-effective LFP chemistry. The demand
for battery grade nickel will far outstrip supply as automakers
ramp up EV production. As a result, NMC market share will decline
from 51.1% in 2021 to 45.3% by 2025.
Going forward metals retrieved from recycling operations will
result in the NMC chemistry gaining a foothold once again from
2026 (with a market share of 45.9% rising to 51.4% by 2030) as
*This article is an excerpt from the report EV Battery Supply Chain published by Fitch Solutions in December 2021.
36
this chemistry option offers higher energy density levels offering
better range capabilities for EVs.
Automakers in China are already making the shift towards
more cost-effective LFP chemistries while the likes of Tesla have
indicated that it will offer the more affordable chemistry type for
its entry-level EV models globally.
The move towards cell-to-pack battery structures that remove
the need for battery modules will also be more broadly implemented
by automakers to ensure that rising costs are limited to the battery
cell level and ensure automakers can deploy more EVs amid
heightened demand globally. Some of these developments have
already gained traction as Ford recently announced that it will
utilise cell-to-pack designs as well as LFP battery chemistries to
further reduce costs.
While automakers will look to keep prices of fully-built EVs
constant to raise EV adoption globally, countries without any
meaningful consumer-focused incentives will be vulnerable to
higher battery costs going forward. Countries in the developing
world with lower EV penetration rates (EV sales as percentage of
total vehicles sold) will be affected should original equipment
manufacturers pass on higher prices when compared to more
developed EV markets such as China, Europe and North America.
This is due to relatively higher incomes in these latter markets
and the prevalence of incentives to cut down the initial purchase
prices of EVs.
Countries that have little to no support will be vulnerable to
further increases in already higher purchase costs of EVs relative
to internal combustion engine (ICE) powered vehicles. It is
anticipated that automakers will deploy mild and plug-in hybrid
models for lower-income markets to cushion consumers from
higher EV prices due to high battery costs.
STATE OF THE
MOTOR INDUSTRY
Electrification, market trends
and motorsport developments
President and CEO of Toyota South Motors, Andrew Kirby, delivered his fifth State of the
Motor Industry address recently. The event, which has become a permanent feature on
the local automotive calendar, discussed several pertinent topics in the industry.
• Dr Gill Pratt says Toyota believes that the best way to reduce
carbon emissions sooner is to employ diverse solutions
• Andrew Kirby predicts that a total of 540 000 vehicles will be
sold in 2022, including 334 800 passenger models, 178 198
light commercial vehicles and 27 002 medium and heavy
commercial vehicles
• Leon Theron announces the launch of Gazoo Racing Junior
Academy and Gazoo Racing Cup
Chief scientist of Toyota Motor Corporation (TMC) and CEO
of Toyota Research Institute (TRI) Dr Gill Pratt mapped
out the company’s global plans regarding electrification,
reduction of carbon emissions and autonomous driving.
“We believe in battery electric vehicles (BEVs) and we’re investing
heavily in them, but we also believe that the way to reduce more
carbon emissions sooner is to employ diverse solutions. This is
particularly important for mitigating climate change because CO2
emissions accumulate globally and remain in the atmosphere for
a long time: we need to reduce CO2 as much as possible as soon
as possible,” says Dr Pratt.
37

MOBILITY
MOBILITY
“The GR Yaris really set the motoring press alight in 2021 and
we felt that this is the perfect car to use for a media challenge race
series – to show just what the GR Yaris is capable of, out-of-thebox,”
says Theron.
GR Junior Academy: Here TSAM, together with motorsport
veteran Leroy Poulter, have handpicked some of the best junior
drivers in motorsport to be groomed for future success. They
range between the ages of nine and 15 years.
“I’m really proud because we get a chance to invest in the
future of motorsport in the form of the GR Academy. The Gazoo
Racing brand is really going from strength to strength and with
this in mind, we thought it the perfect opportunity to start a GR
Academy to foster young racing talent,” concludes Theron.
He outlined that Toyota’s strategy towards the reduction of
carbon emissions was premised on three key points:
• Decarbonise as much as possible as quickly as possible
• Enable everyone to reduce carbon emissions
• Maximise Carbon Return on Investment (CROI)
DIVERSE APPROACH
As Dr Pratt puts it: “The greatest reason Toyota believes we should
diversify our portfolio of solutions to climate change is that a
diverse approach is more likely to work. That’s why in December
2021, Akio Toyoda, president of Toyota Motor Corporation in
Japan announced that Toyota will invest approximately $70-billion
globally in electrified vehicles, including hybrid-petrol vehicles,
plug-in hybrid fuel cell and battery electric vehicles. Toyoda
explained that Toyota wants to prepare as many options as possible
for its customers around the world, and he also announced that
Toyota plans to roll out 30 BEV models by 2030 and that Lexus is
aiming for 100% BEV sales globally by 2035.
ALL HAVE A PART TO PLAY
According to Dr Pratt: “There is also another reason why Toyota
believes in a diversified approach to electrification, and it is a
human reason. We want to give all people around the world –
from all walks of life – the best tools to solve the global problem of
climate change. Different people have different circumstances and
different needs. Some live in areas with electrical grids powered
by renewables, others live in areas that will be powered by fossil
fuels for some time. Some have convenient charging stations at
home and others live in cities where that is more difficult. Some
are wealthy. Most are not. As a result, what is best for the average
person or for any particular person is not best for every person: we
need to supply the world with a diversity of tools. Toyota believes
the best strategy today for reducing greenhouse gases is to offer a
diverse portfolio of hybrid vehicles, plug-in hybrid vehicles, battery
electric vehicles and fuel cell vehicles.”
We want to give all people
around the world – from all walks
of life – the best tools to solve the global
problem of climate change.
CARBON RETURN ON INVESTMENT
Dr Pratt concludes: “Now let me provide a third reason to believe in a
diverse approach and this is an economic reason. The manufacture
of products that reduce carbon emissions often emits some carbon
as well, and this is generally true for solar cells and batteries. For
example, a way to measure this phenomenon is to think of it like
an investment: a carbon investment where we emit some carbon
today to save more carbon from being emitted in the future.
“The term for this is carbon return on investment (CROI) and
here is where it gets. For batteries as a whole to reduce the
most net carbon we should try and maximise the CROI of every
battery cell produced. If we produce a battery cell and never
use it, its CROI will be zero, and it will end up making climate
change worse. On the other hand, if we fully use the battery
cell to reduce carbon, its CROI will be strongly positive, helping
mitigate climate change.”
WHAT TOYOTA SOUTH MOTORS SAYS
Toyota South Motors (TSAM) president and CEO of TSAM Andrew
Kirby concurs with Dr Pratt that a diverse approach or “diversity of
drivetrains” is what is needed by the industry in the fight against
carbon dioxide. He says that government incentives were needed
in South Africa to encourage the adoption of new energy vehicles
as well as making cost attractive to the market.
He added that the local market is not yet conducive for the full
adoption of BEVs, citing infrastructural shortcomings related to
energy generation as well as high import duties. Last year, the
Department of Trade, Industry and Competition published a
green paper on incentivising the local manufacture and purchase
of new energy vehicles. It is hoped that the policy would kick off
soon after the white paper has been adopted in due course.
STATE OF THE MOTOR INDUSTRY
According to Kirby, total vehicle sales for the 2022 will continue
the post-lockdown recovery and settle at 540 000 at the end of
the year. “The breakdown for this year’s forecast includes 334 800
passenger models, 178 198 light commercial vehicles (LCV) as well
as a total of 27 002 medium and heavy vehicles.
“The extrapolation (540 000 units) is based on a variety of
socio-economic factors that do not bode well for the local motor
industry, including the rising interest rate cycle, the strain taken
by the agricultural sector due to heavy rainfall, the muted tourism
recovery as well as possible market instability owing to ANC
leadership elections and NBF wage negotiations,” says Kirby.
He concluded that his forecast was “constrained” and that the
industry could even sell more vehicles if the economy performed
better than expected or if issues in the automotive supply chain
were to be resolved.
GAZOO RACING ANNOUNCEMENTS
The last segment of State of The Motor Industry 2022 featured a
number of new vehicle reveals including Lexus LX, NX, LS 500
Hybrid, Toyota Hilux GR-S, Corolla Cross GR and RAV4 VX Hybrid.
These were followed by a couple of motorsport announcement
made by Senior Vice President of Sales and Marketing at TSAM,
Leon Theron.
GR Cup Yaris Challenge: This initiative sees six local journalists
battling it out on various racetracks in South Africa, all piloting
the fabled Toyota GR Yaris. They include Jeanette Kok-Kritzinger,
Mark Jones, Thomas Falkiner, Lerato Matebese, Sean Nurse and
Ashley Oldfield.
38
39

CIRCULAR
ENERGY
SECOND LIFE STORAGE BATTERIES:
A true circular economy solution
REVOV supplies storage batteries for the renewable energy and uninterrupted
power supply market in Sub-Saharan Africa that are repurposed from the
cells of electric vehicle batteries. Why does this matter?
TM
TM
REVOV’s pre-assembled, self-contained
High Voltage batteries are affordable,
providing the lowest cost per usable kWh.
Compatible with Atess HPS inverters
and others.
Johannesburg Head Office: 010 035 6061
Cape Town Office: 021 569 2760
BY LANCE DICKERSON, MD AT REVOV
Here’s the context: lithium iron phosphate batteries are
superior to lead-acid batteries in every metric, from
safety to performance. The storage batteries are used
in uninterrupted power supply (UPS) systems for power back
up or in renewable energy installations to provide off-grid or
hybrid power solutions. Ordinarily, the lithium supply chain
pressures caused by growing lithium shortages – driven by the
surge in electric vehicles (EVs) – would spell bad news in terms
of affordability.
However, second-life batteries, which are repurposed from
the cells in replaced EV batteries, have stepped up to fill the
void. Every EV’s battery needs to be replaced when the weight
no longer justifies the performance. Ordinarily these batteries
would end up in landfills. However, the individual cells, when
repurposed correctly and when built into batteries with intelligent
management systems, still have enough life and performance in
them to provide stationary storage for as long as first-life batteries
with the added benefit of performance specifications unique to the
EV sector, such as the capacity to perform in harsh conditions.
This is how REVOV has built its business: by securing these
premium cells and by building premium second-life batteries,
we’ve provided a compelling solution to close the circular economy
in Sub-Saharan Africa.
The time is right for partnerships that will change the face
of energy storage. Imagine the possibilities that reside within
repurposing the cells of the Audi E-Tron that won a stage at the
Dakar and using the second-life batteries to provide energy storage
at a renewable plant: the symbolism couldn’t be more poignant as
we are quite literally in a race to save the planet.
REVOV PRIME 100kWh.
REVOV PRIME 100kWh.
REVOV’s pre-assembled,
High Voltage batteries ar
providing the lowest cost
Compatible with Atess HP
and others.
Why? Because in the absence of a viable recycling value chain,
we know the batteries end up in landfills – which is the opposite
of what saving the planet should look like. However, the individual
cells in these EV batteries still have many years’ life – up to 10 or
15 years – if they are repurposed correctly and built into storage
batteries where weight doesn’t matter.
That’s the position in the circular economy that REVOV was
created to fill because what better way to contribute to the
wellbeing of the economy than to supply energy backup to
another burgeoning industry – renewable energy – using secondlife
batteries? South Africa’s government has started making very
promising moves, not least in raising the embedded generation
threshold from 1MW to 100MW. Besides energy security, which
is crucial for this country to reach its potential, it is clean energy.
It becomes obvious why the carbon-friendly second-life battery
option is ready to step up and play a crucial role in our future.
Sure, there are brand new lithium batteries that are built to go
into the storage market, but when you consider that there is a
trivial difference in performance, and in some instances superior
performance from the EV cells used in second-life batteries, it
becomes a no-brainer. Why add additional strain to the lithium
supply chain when we can solve a massive problem for the EV
industry and close a vital gap in the energy storage industry?
REVOV predicts second-life batteries will become the dominant
battery type providing energy backup to power renewable energy
installations and UPS systems.
41

ENERGY
ENERGY
transition. The large concentration of coal mining and power
generation in Mpumalanga, as well as the potential decline in
coal demand in the global market, means the need for a just
transition in South Africa is particularly relevant to deal with
the potential loss in jobs and economic activity in affected
communities. The recent update to the NDCs means that
the country must move with speed to respond to the global
commitments on emissions reduction.
GREEN HYDROGEN IN AFRICA
South Africa, Morocco and Egypt boast the most diverse and
largest industrial bases in Africa and face the most significant
pressure to move towards sustainable energy sources for critical
value chains. According to ClimateWatch, South Africa accounts
for 1.06% of global greenhouse gas emissions, while Nigeria is
at 0.73% and Egypt is around 0.6%. Nigeria is among the top 20
largest emitters in the world, the second highest in Africa after
South Africa. Morocco and Angola account for 0.16% and 0.25% of
global greenhouse gas emissions respectively.
WHY GREEN HYDROGEN?
The proliferation of low-carbon hydrogen across multiple sectors
will be key to achieving global climate goals in line with the
Paris Agreement and COP26. Green hydrogen is produced from
renewable electricity making it the cleanest hydrogen format,
unlike the incumbent market leaders, grey and brown hydrogen,
which are produced from fossil-fuel based energy. Blue hydrogen
is fossil-fuel based but utilises carbon capture and storage (CCS)
systems to mitigate the emissions and is also low carbon.
Carbon capture, utilisation, and storage (CCUS) is an emissions
technology that involves capturing, transporting and storing
greenhouse gases back into the ground.
Kearney believes that South Africa is best positioned to drive
the regional energy transition followed by Morocco and Egypt.
Other traditional oil and gas producers such as Nigeria and Angola,
though lagging, could benefit from leveraging their existing
natural resources, infrastructure and human resource capabilities
to participate in production and export of hydrogen.
THE RACE TO
GREEN HYDROGEN IN AFRICA
Hydrogen is an attractive opportunity that could realise a cumulative global investment of
USD450-billion by 2030. Countries are shifting away from a dependence on fossil fuels such
as coal – a crucial export for South Africa, so the development of our hydrogen economy
could be a game changer.
African emissions by source.
(Megatonnes of CO2)
BY FITCH SOLUTIONS
South Africa is home to 75% of the global reserves for
platinum group metals (PGMs), which are used in hydrogen
and fuel cell technologies. About 40% of PGMs are used
in catalytic converters for internal combustion engines (ICEs).
The potential decline of ICEs due to climate-related restrictions
threatens the existence of this market and the future demand
for PGMs. Through the hydrogen economy, South Africa can
mitigate this with PGMs in hydrogen fuel-cell vehicles and greenhydrogen
production technologies.
Given our share of PGMs and their contribution to the economy
(R187.6-billion in 2019) and the dire unemployment situation, it
is essential to capitalise on the increased demand for hydrogen
applications that require PGM metals. The PGM industry currently
employs about 160 000 people, with two to three indirect jobs in
other industries for each direct job, resulting in almost 400 000
jobs. The potential for hydrogen to support the growth of our
renewable energy industry as an energy-storage solution would
also contribute to job creation.
JUST TRANSITION: THE CORE OF FUTURE POLICY
There is a need to ensure inclusive participation in the transition
and that substantial benefits of a green economy are shared. The
World Resources Institute considers our national dialogue on just
transitions one of the most advanced and South Africa was the only
one to have included a just transition in its Nationally Determined
Contributions (NDCs) in 2015.
In early 2021, the Presidential Climate Change Coordinating
Commission was established to coordinate South Africa’s just
Ember's Global Electricity Review 2022
South African emissions by
source. (Megatonnes of C02)
42
43

ENERGY
ENERGY
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HOW DO WE GET THERE?
production and distribution
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to unlock further cost reductions
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hydrogen have industry. already
CLOSER THAN
HOW DO WE GET THERE?
SUSTAINABLE INDUSTRIAL DEVELOPMENT
The use of green hydrogen could benefit multiple sectors and for
Africa these can be summarised into:
Mobility. To fuel maritime transport vessels, aircraft, vehicles and
freight trucks.
Industry. Used as a fuel for energy-intensive industries such as
the production of green steel. The mining, manufacturing and
construction sectors will benefit most by green steel.
Trade. Several countries in the region possess vast natural resources
(natural gas, solar and wind potential) to produce blue and green
hydrogen but lack sufficient infrastructure, domestic industrial
clusters and regulatory environments to drive
higher local use. Some states will look to develop
hydrogen technologies and position themselves to
become major hydrogen exporters in the short-tomedium
term while transforming local industries
on a longer-term horizon.
distribution 3. and STIMULATE
refuelling networks can
costs will fall sharply and
slash
scale DEMAND
BY distribution
up 2030… costs by up to 70%.
will increase. & SUPPLY
For example:
moving 3. from STIMULATE
20 to 80% utilisation in
distribution DEMAND and refuelling & SUPPLY
networks can
costs slash distribution will fall costs sharply by up to 70%. and
private and public sources will enable
deploying hydrogen energy solutions.
COVID-19 has forced the world to drastically Increased collaboration change course can and kickstart think beyond a the status quo. For recovery
COVID-19 has forced the world to drastically change course and think beyond the status quo. For recovery If we strive towards critical tipping points,
efforts to provide long-term value, we need investable solutions that kickstart a cleaner, more resilient world.
efforts to annual provide global long-term energy value, spend we - from need investable solutions developed that detailed kickstart strategies a cleaner, for more resilient world.
The scale-up of hydrogen technologies is one way to pave the road towards
private and public sources will enable
deploying hydrogen energy solutions.
scale up
this
will
reality.
$70 billion - less than 5% of 18 countries have already
If we strive towards increase. critical For tipping example: points,
The scale-up of hydrogen technologies is one way to pave the road towards this reality.
COVID-19 annual hydrogen global has energy to forced reach spend scale. the - world from to drastically Increased developed change collaboration detailed course strategies can and kickstart think for a beyond costs moving the status will from 20 quo. fall to 80% For sharply utilisation recovery and in
private and public sources will enable
deploying productive hydrogen hydrogen energy industry. solutions. distribution scale up will and increase. refuelling For networks example: can
efforts to hydrogen 1. provide INVESTMENT Scaling to reach long-term up the scale. hydrogen value, value we need Increased 2. investable REGULATION collaboration solutions can kickstart AND that kickstart a a slash moving cleaner, distribution 3. from STIMULATE
more 20 to costs 80% resilient by utilisation up to world. 70%. in
#HYDROGENNOW
productive INCENTIVES
hydrogen industry.
distribution DEMAND and refuelling & SUPPLY
networks can
COVID-19 The scale-up chain
has forced
will of be hydrogen the
the
biggest
world to
driver technologies drastically change is one course way and to pave think beyond the road the towards status quo. this For reality.
#HYDROGENNOW
recovery
READ MORE IN THE FULL REPORT, PATH TO HYDROGEN COMPETITIVENESS: A COST PERSPECTIVE
to unlock further cost reductions
slash distribution costs by up to 70%.
READ MORE efforts IN $70 THE FULL to REPORT, billion provide PATH TO HYDROGEN - long-term less than COMPETITIVENESS: 5% value, of A COST we PERSPECTIVE need 18 investable countries solutions have already that kickstart If we a cleaner, strive towards more critical resilient tipping world. points,
from 2030 and beyond.
annual global energy spend - from
developed detailed Hydrogen strategies Hydrogen for transport
costs
Hydrogen
will fall
Hydrogen
sharply and
private The and scale-up public sources of hydrogen will enable technologies deploying hydrogen is
production
one energy way to
and distribution
solutions. pave the road
storage
scale towards
applications
up will increase. this For reality. example:
1. INVESTMENT COVID-19 has forced the world 2. to drastically REGULATION change course AND and think beyond the 3. status STIMULATE
quo. For recovery
hydrogen to reach scale.
Increased collaboration can kickstart a
moving from 20 to 80% utilisation in
#HYDROGENNOW
efforts to provide long-term value, we need INCENTIVES
productive investable hydrogen solutions industry. that kickstart distribution DEMAND a cleaner, and more refuelling & resilient SUPPLY
networks world. can
44COVID-19 has forced the world to drastically change course and think beyond slash the distribution status quo. costs For by recovery
READ MORE IN THE FULL REPORT, PATH TO HYDROGEN COMPETITIVENESS: A COST PERSPECTIVE
up to 70%.
$70 billion efforts The scale-up of hydrogen technologies is one way to pave the road this reality.
- less to than provide 5% of long-term value, 18 we countries need investable have solutions already that kickstart If we strive a cleaner, towards more critical resilient tipping world. points,
annual global #HYDROGENNOW
energy spend - from
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The scale-up of hydrogen technologies HOW DO is one WE way GET to THERE? pave the costs road will towards fall this sharply reality. and
OPERATIONAL CONSIDERATIONS
The openness to foreign investment coupled
with good legal environments will be key to
attracting private sector participation in hydrogen
and renewables. Morocco, Egypt and South Africa
are more welcoming to foreign investment and
offer stronger incentives for technology and
energy industries, relative to Nigeria and Angola. In
these states, progressive pro-business investment
policies have driven considerable industrialisation
and development of renewable energy sources
with notable success in public-private partnerships
(PPPs) as opposed to Nigeria and Angola.
In terms of bureaucracy, South Africa boasts
strong contract enforceability and performs
better than Egypt, Nigeria and Angola. As seen in
Nigeria and Angola, the risk of slow policy reform
momentum and the dominance of large stateowned
entities in the energy hydrocarbons sectors
will negatively affect foreign direct investment into
green energy solutions.
LEADERS IN THE AFRICAN RACE
1. South Africa is well-placed to utilise existing
natural resources such as wind and solar to
produce renewable power for green hydrogen
production. The country will most likely attract
substantial investor interest in green energy
as it is SSA’s most industrialised economy
with the largest installed non-hydroelectric
renewables capacity base in the region and
a strong PPP track record. The presence of
platinum, steel, energy and related industries
will allow for efficiency gains in the production
of green hydrogen. The government plans to
launch a hydrogen corridor, which will involve
heavy-duty fuel cells for the country’s air, freight
and rail network as well as trucks. Regulatory
delays and political tensions may deter more
risk-averse investors.
2. Morocco and Egypt are well-positioned to
export green hydrogen to proximal demand
markets, such as Europe. Both country’s nonhydropower
renewables sector will continue to
attract significant investment through to 2030, with
vast untapped solar and wind power potentials
proving attractive to investors.
Egypt outperforms Morocco due to a comparatively higher
green hydrogen high-rewards profile underpinned by a strong
demand outlook, despite higher project and legal risks. Rising
competitiveness and falling costs have made solar and wind power
Egypt’s cheapest source of electricity. This will contribute greatly
towards the country becoming a regional electricity and green
hydrogen export hub.
3. Angola and Nigeria’s development of non-hydropower
renewables capacity has been limited due to continued project
delays and regulatory hurdles. Investors are wary of burdensome
legal and foreign currency repatriation risks, given the long-term
and capital-intensive requirements of green energy investments.
Nigeria is mostly likely to rise in the rankings by 2030. Future
demand variables are key factors for the country, and it is expected
to lead the region in road freight capacity and dry natural gas
consumption, while being second in SSA (behind South Africa) in
terms of crude steel production. Nigeria has the largest gas-fired
power generation capacity in SSA; which points to the potential for
blending hydrogen with gas to reduce emissions from the power
sector going forward.
BARRIERS TO PRODUCTION OF HYDROGEN
There are numerous challenges preventing SSA markets from
developing industrial-scale hydrogen production operations,
broadly stemming from the pervasive lack of economic, political and
electricity security across most markets. There are three key aspects
limiting the region’s capacity to develop its hydrogen production
sector at present namely: inadequate renewables electricity supply
and constraints in access to freshwater; lack of existing related
utilities and transport infrastructure and human capital and sluggish
renewables uptake preventing the build-out of green hydrogen
industry. Given the high costs of storing and transporting hydrogen,
Egypt and Morocco’s proximity to European markets hold strong
export potential in the future.
Transport logistics. The low volumetric energy density of
hydrogen (in both compressed gas and liquid forms) makes
the storage of hydrogen challenging. This limitation is felt most
strongly in onboard storage, but it is also a risk in the delivery
and distribution of hydrogen. A number of chemical, solid state
and other approaches (that could lead to higher stored energy
density) can be used in countries to manage the use and,
primarily, transportation of hydrogen from point-of-production
READ REPORT
The above article is an excerpt from a Fitch Solutions report Low Carbon Hydrogen Global Pathways to Multi-Sector Opportunities published in December 2021.
THOUGHT [ECO]NOMY
greeneconomy/report recycle
to point-of-use through pipelines, roads and shipping networks.
Expertise needed to enable production. Growth in the hydrogen
and fuel cell industries will lead to new demand for workers in
these sectors. Many of these jobs do not currently exist or have
occupational titles defined in official classifications. They will require
different skills than current jobs and training requirements must
be assessed so that this rapidly growing part of the economy has
a sufficient supply of qualified workers. The most critical skills are
likely to be those from technical workers.
South Africa, Egypt and Morocco have strong levels of skills
availability by regional standards, particularly for mid-entry level
roles, but will likely need to import workers for more specialised
roles. Businesses need to be mindful of the barriers to importing
foreign workers and the added complications in obtaining the
necessary permit documents.
Key policy risk areas. When it comes to local use of hydrogen,
Kearney believes that African countries including its largest
economies will face numerous challenges in producing, storing and
trading green hydrogen. From a policy perspective, according to the
International Renewable Energy Agency (IRENA), countries need
certain key pillars for clean hydrogen development:
• A cohesive national or regional strategy (as seen in the EU,
Japan and Australia). Countries will also have to develop robust
industrial policies across the value chain, particularly for heavy
industries and boost PPPs in renewable energy development.
• Adequate research and development programmes and plans to
boost expertise.
• For hydrogen trade to occur successfully, coherent regulations
are necessary in both the clean hydrogen origin and destination
countries, and policy areas need to be clear and consistent.
Additional incentives will be needed to entice various
stakeholders to commit to longer-term purchase agreements of
green hydrogen.
• Because the molecules of hydrogen are identical, regardless of
the method of production, a certification system or guarantee of
origin is needed for end users to know the origin and sustainable
nature of the hydrogen production process for each delivery.
Several countries have already initiated certification schemes,
such as the EU’s CertifHy and Australia’s Hydrogen Certification
Scheme; however, for international trade it is vital to ensure that
these standards are compatible with domestic processes.
www.fitchsolutions.com
HYDROGEN SOCIETY ROADMAP FOR SOUTH AFRICA 2021 | Department of
Science and Innovation [2021]
The race is on for countries with a comparative resource advantage to demonstrate
the production of green hydrogen for export, at scale and at competitive prices. The
projected growth of demand for green hydrogen over the next 10 to 30 years offers an
attractive growth area as the world shifts from carbon-intensive to zero-carbon emission
economies and industrial sectors; the emerging zero- or low-carbon hydrogen-energy
system’s momentum is rapidly growing.
Cabinet approved the Hydrogen South Africa Strategy (HySA) in 2007, so South Africa
today is well-poised to leverage the hydrogen opportunity at the centre of our economic
growth and development strategies, as well as part of our mitigation strategy for climate
change through greening our economy and society.
The Hydrogen Society Roadmap is one of government’s strategies aimed at bringing
together a variety of stakeholders (both public and private) around a common vision
on how to use and deploy hydrogen and related technologies as part of our economic
development and greening objectives. This roadmap has the potential of placing South
Africa as an important player, participant and scientific thought leader in the emerging
global hydrogen system.
45

ENERGY
Shaping tomorrow’s
hydrogen market
Since hydrogen markets will grow exponentially in the mid- and long-term, companies that
invest today in hydrogen will be able to capture this growth, become technology leaders
and shape the future of the business.
BY BAKER MAKENZIE*
However, there are still multiple barriers to the widespread
development of decarbonised hydrogen and each
investment will face challenges in the form of policy,
regulatory, economic and financial barriers. The speed of
deployment of hydrogen in coming years is expected to vary
between sectors and countries. These variations come partly
from the different level of maturity of the technology required
for decarbonised hydrogen development.
The details of different governments’ strategy will affect what
opportunities can be taken advantage of. Mastering government
strategies, regulations and sources of funding will be crucial. In
each region, government strategies and regulatory barriers should
first be assessed and then monitored. Governments’ economic
strategies create good market conditions and are vital. The speed
of development of the decarbonised hydrogen market will depend
on how quickly governments require the current and future
markets for hydrogen to decarbonise.
Those companies ahead of the curve in factoring government
climate strategy into investment decisions are the ones that will
lead tomorrow’s hydrogen market. The presence of favourable
economic conditions for the development of green and blue
hydrogen, in a particular region or country, should be a precondition
for any large-scale investment by first movers. Outdated hydrogenrelated
regulations should also be monitored. Despite government
commitments, regulations can be slow to adapt. Outdated regulatory
regimes are significant hurdles to smart power advancement,
including hydrogen-based storage. Some of the barriers include,
among others:
• The absence of “Guarantees of Origin” schemes enabling the
distinction between different types of hydrogen based on
greenhouse gas emissions associated to their production
• The unclear legal status of “power-to-hydrogen” plants that
can prevent such plants from being rewarded according to the
actual service rendered to the energy system
• Counterproductive industrial emissions or safety regulations
• Inconsistent funding rules
• Outdated market rules in the gas or electricity markets
• Government discrimination based on irrational concerns.
To ensure a return on their investment, first movers should
assess (i) the effect of existing regulatory barriers on any
new investment or project, (ii) the likelihood of such barrier
disappearing for a particular market and within a particular
timeframe, and (iii) the availability of public support to derisk
the investment when needed. Smart movers should use
government support to de-risk investment with respect to the
cost of hydrogen.
*This article is an excerpt from the Baker McKenzie report, Shaping tomorrow’s global hydrogen market.
46
Smart first movers should also rely on direct government support
to de-risk investment during the early years of this emerging
market. To do so, it is important to act in the right areas and in the
right markets, where government support is likely to be abundant.
To best use available government companies should understand
(i) which countries provide the best focused funding support and
(ii) what types of projects governments are likely to support.
Companies contemplating a specific investment in their own
region and field of expertise should carry out a thorough analysis
of funding opportunities. However, understanding regional and
sectoral funding trends as well as expert recommendations can
already provide some insight as to government-financing patterns.
In the past, governments have so far, (i) favoured the
development of green (as opposed to blue) hydrogen production
and (ii) focused on hydrogen-based transportation. In practice,
these two efforts are closely connected since 40% of the publicly
funded water electrolyzers have been installed to supply
hydrogen-fuelled buses or cars. Thanks to these investments,
many stakeholders share the opinion that large-scale demand
and standardisation, rather than further technological progress,
are now the key to the widespread adoption of fuel cells, water
electrolyzers, and hydrogen refuelling. A transition of public
funding from technological demonstration projects and R&D
into projects enabling large-scale demand and standardisation
should therefore be expected.
In 2019, the International Energy Agency (IEA) published a
report on the future of hydrogen which identified high-potential
business opportunities whose funding would give a boost to the
hydrogen market and drive down costs and recommended that
government seize the following “near-term opportunities”:
• Turning existing industrial ports into epicenters for scaling up
the production and use of clean hydrogen
• Capitalising on existing natural gas infrastructure and increase
hydrogen demand by implementing an obligation to mix
(low-carbon) hydrogen into natural gas
• Making fuel cell vehicles more competitive for vehicle fleets,
freight transports and corridors by ensuring the parallel
expansion of infrastructure for hydrogen supply, vehicle
refuelling and vehicle manufacturing
• Stimulating the creation of international hydrogen trade.
One can expect that many governments’ strategy will be reviewed
soon, largely in a direction inspired by the IEA’s recommendations.
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COMPETITION
COMPETITION
CELEBRATING
World Metrology Day 2022
May 20 is World Metrology Day, commemorating the anniversary of the signing of the Metre
Convention in 1875. This treaty provides the basis for a worldwide coherent measurement
system that underpins scientific discovery and innovation, industrial manufacturing and
international trade, as well as the improvement of the quality of life and the protection of
the global environment.
BY NMISA
The theme for World Metrology Day 2022 is Metrology in
the Digital Era. This theme was chosen because digital
technology is revolutionising our community and is one
of the most exciting trends in society today. Across the
world, national metrology institutes (NMIs) continually advance
READ MORE: WORLD METROLOGY DAY
THE NMISA WAY
The National Metrology Institute of South Africa (NMISA) is part
of the Department of Trade, Industry and Competition’s (the dtic)
family of Technical Infrastructure (TI) institutes, which includes the
South African Bureau of Standards (SABS), National Regulator for
Compulsory Specifications (NRCS) and the South African National
Accreditation System (SANAS). These associations instil confidence
in local goods and products and together they allow for successful
prosecution in cases of non-compliance.
The accuracy of measurement results can be demonstrated
through traceability to the National Measurement Standards
realised by NMISA, enabling:
Globalisation of trade in manufactured products
• Providing traceable, comparable and mutually acceptable
measurements globally
• Assisting manufacturers to get it right the first time
Lean manufacturing
• Allowing for productivity, product reliability and less waste
• Supporting repeatable and predictable results over time
• Minimising errors in decision-making
• Promoting improved human safety
Market acceptance of products and services
• Product superiority by meeting quality specifications
• Market confidence in measurement reliability
measurement science by developing and validating new
measurement techniques at the necessary level of sophistication.
World Metrology Day recognises and celebrates the contribution of
all people that work in intergovernmental and national metrology
organisations and institutes throughout the year.
For additional information on NMISA, visit www.nmisa.org or send an email to info@nmisa.org
Facebook: NMISouthAfrica
Twitter: @NMISouthAfrica
Instagram: @nmisouthafrica
YouTube: National Metrology Institute of South Africa (NMISA)
ENTER COMPETITION
Terms and Conditions
• The competition is open for registered small and medium enterprises across South Africa.
• The prize is not transferable and cannot be exchanged for cash.
• Prize includes a printer and 5 rolls of Polylactic Acid (PLA) to get you started.
*Computer and printing software is excluded, although technical support will be available from the supplier.
• Only one original entry per person is allowed, and two additional entries for social media engagement (Facebook and Linkedln)
can be added.
• The Winner will be chosen at random, via lucky draw.
• The Winner will be announced live at the World Metrology Day 2022 virtual celebration event.
• The Winner must be willing to be interviewed for publicity purposes.
Closing Thursday 19 May at 23:59 SAST (South African Standard Time)
BIG PRIZE FOR SMALL ENTERPRISE
In celebration of World Metrology Day 2022, NMISA invites all South African SMEs to enter our competition and stand a chance
of winning a 3D printer.
The Institute has recently experienced how additive manufacturing of instrument replacement parts benefited NMIs in SADC
when the Additive Manufacturing project was launched. Metrology requires advanced scientific instrumentation and tools. Most
African NMIs typically import sophisticated measurement instruments, while replacement or modification parts for the instruments
are non-standard, unique, expensive or only available from the original equipment manufacturers (OEM). These OEMs and their
support engineers are geographically far away and servicing such instruments is often difficult, sometimes impossible, resulting in
significant costs and shipping or custom clearance delays.
The ability to locally manufacture mechanical components with a 3D printer resolves this problem and in so doing reduces
the reliance of African NMIs on international supply chains. The AFRIMETS Additive Manufacturing (AM) project was developed
by NMISA to provide a 3D printer, online training and support six African NMIs. This project allowed the NMIs to manufacture
mechanical components for their laboratories, and also included training on digital part modelling as well as design for AM and
3D-printer usage.
The project was a huge success providing opportunity for future expansion. Locally, additively manufactured functional parts
will make African metrology institutes more sustainable and independent. These institutes are now able to provide additional
calibration services, which link the measurement units to industrial and everyday measurements.
A 3D printer will help SMEs to create additively manufactured functional parts for machines or to develop prototypes while
developing new manufacturing products.
NMISA supports SMEs operating at all levels of the value chain: from basic measurements enabling traditional trade (mass and
volume) to sophisticated measurement systems. We support leading edge research and enhance export opportunities for local
producers.
In addition to measurement services, NMISA’s training centre provides a range of courses for local and regional technologists,
scientists and engineers in the field. Hands-on practical training in NMISA laboratories is on offer. Special development projects
that assist SMEs have been created that include an SME measurement toolkit and educational video material.
Ndwakhulu Mukhufhi, CEO for NMISA, states: “NMISA recognises that SMEs are invaluable to accelerate inclusive growth in
the South African economy, as advocated in the National Development Plan 2030.” He adds that NMISA will continue to look for
development opportunities related to measurement science and technology to enable SME development, specifically innovationbased
SMEs, to weather ongoing economic uncertainty.
TO ENTER THE COMPETITION
and stand a chance to win a 3D printer for your business
CLICK HERE
48
49

THOUGHT LEADERSHIP
THOUGHT LEADERSHIP
TO DENSIFY OR NOT:
the pandemic as a driver
of urban transformation
The Covid-19 pandemic is challenging one of the basic tenets of urban orthodoxy namely
that there are numerous benefits to be derived from urban density.
BY LLEWELLYN VAN WYK, B.ARCH; MSC. (APPLIED), URBAN ANALYST
Oliver Schaper argues that at the core of what makes dense
urban environments authentic lies a network of forces
that create unpredictability, serendipity and diversity –
qualities that in times of social distancing appear to be a threat
to our personal safety and wellbeing. 1
Richard Florida, a professor in the University of Toronto’s School
of Cities, agrees, arguing that the very same clustering of people
that makes our great cities more innovative and productive also
makes them, and us, vulnerable to infectious disease. 2
50
Urbanism drowning in the uncertainty of the Covid-19 pandemic. David Bülow (2020)
“The streets were all empty,
The pews were all bare.
The neighbours were treated
Only with what we could spare.
Alone we sat, fearful and forlorn,
Locked in our homes, to weather this storm.”
Darren C Mossman (2021)
David Bülow
However, the question remains whether density supports
higher rates of infection. David Madden argues that there is no
simple relationship between urbanisation and infectious disease.
He notes that researchers have traced how interactions at urbanrural
peripheries create new vulnerabilities to disease, and
cites a study published in 2017 that looked at 60 countries and
found that, overall, infectious disease burdens decreased with
urbanisation. While epidemics have periodically devastated poor
and marginalised urban communities, cities have also spawned
new health policies, housing reforms and social movements
that help people survive disease. 3 As he points out, much of the
anxiety about cities during the pandemic has centred on fears
that population density might heighten the risk of contagion.
He argues that density and crowding are not the same thing.
Overcrowding is the result of inequality and the housing crisis,
not an unchangeable feature of urban life.
As Florida points out density is likely just one of several key
factors that determine how vulnerable places are to the virus.
Globally, Covid-19 has taken root and hit hard in several types
of places. One is large dense superstar cities like New York and
London, with large flows of visitors and tourists, diverse global
populations and dense residential areas. A second is industrial
centres like Wuhan, Detroit and Northern Italy, which are
connected through supply chains. The third is global tourist
meccas like the ski slopes of Italy, Switzerland and France, and
their counterparts in the Colorado Rockies. And in smaller
communities, the virus targeted nursing homes and funeral
parlours, and of course cruise ships, which are like dense small
cities at sea. As he notes, there is no simple, one-size-fits-all
explanation when it comes to cities and the virus.
It is important to distinguish the unfortunate hot spots where
it first cropped up from the characteristics of places that may
propagate, or limit, its spread. Cities differ along many dimensions
– population size, age, education level, affluence, religiosity, the
kinds of work people do, levels of social capital and more. These
factors may affect their vulnerability to the coronavirus. Analysis
done on the geography of Covid-19 finds that it is not density
in-and-of-itself that seems to make cities susceptible, but the
kind of density and the way it impacts daily work and living. That
is because places can be dense and still provide places for people
to isolate and be socially distant. Simply put, there is a huge
difference between rich dense places, where people can shelter
in place, work remotely and have all their food and other needs
delivered to them, and poor dense places, which push people out
onto the streets and onto crowded transits with one another.
There are several other factors in addition to density that merit
closer attention as the virus’s spread is tracked. Two obvious ones
are the age of population and pre-existing health conditions. It
is critically important to look closely at the uneven impact of the
virus on poor and minority communities. It is also important to
zero in the differences in the kinds of work people do: the shares
of the workforce that can engage in remote work versus the share
of frontline workers in healthcare, delivery and grocery stores
that are particularly vulnerable to the virus. Then too, that some
things we want to encourage in cities, like tight social bonds and
civic capital, make them more vulnerable. Rather distressingly, it
appears that the virus may reinforce some key faultiness of our
existing economic and geographic divides. 4
Elek Pafka, a lecturer in urban planning and design at the
University of Melbourne, takes this argument further. Writing in
The Conversation, he notes that physical distancing has been the
most common measure to contain the spread of the virus. But, he
argues, this does not mean higher-density cities are necessarily
more vulnerable and lower-density cities more resilient to the
pandemic. He acknowledges that some say high density is a
key factor while others argue it is unrelated. But he posits that
evidence invoked on both sides has often been anecdotal.
Too little attention is paid to what urban density means.
Density in cities takes on a broad range of meanings, such as
density of buildings, residents or jobs. There is often confusion
between internal densities within buildings, which vary widely
with wealth, and the external densities of street life, which we
share. To complicate things further, each of these concepts can be
applied to a range of scales, from a building to a neighbourhood
to a metropolis. In identifying what kind of density is relevant
for the spread of the coronavirus he notes that it has become
increasingly clear Covid-19 is mainly transmitted through
extended close contact, particularly in enclosed spaces, where
droplets and aerosols accumulate. The density that matters is
internal population density – generally measured as square
metres per person. Thus, high-risk places can include dormitories,
open plan offices, churches, hospitals, public transport, planes
and cruise ships.
The evidence to date points to much less transmission through
casual contacts in outdoor spaces such as streets or parks. Neither
gross residential densities of suburbs or neighbourhoods nor
overall metropolitan densities necessarily reflect conditions at
the scale of human encounter that determines transmission risks.
Pafka suggests there are two main reasons for this. First, densities
at the street or walkable neighbourhood scale can differ vastly
from metropolitan or postcode averages. A local main street, for
instance, can be dense when the average is low. Second, a short
physical distance between people is not the same thing as social
encounter. The density of quarantine accommodation (such as a
hotel) may be much higher than that of an aged-care facility, but
we have seen the latter can be quite lethal.
Internal densities are geared to wealth. This means some people
live and work under conditions where they can adapt to this virus,
and some do not. Reflecting on what this all means for the design
and planning of a healthy city; he acknowledges that some might
be tempted to propose “pandemic-safe” urban forms like the anti-
51

THOUGHT LEADERSHIP
THOUGHT LEADERSHIP
urban utopias of the early 20th century. But he cautions, if urban
form is solely conceived to distance people, to eliminate the friction
of social interaction, it will also eliminate urban buzz, reduce
economic productivity, sociability, walkability and ultimately public
health as well.
Instead, we should use this crisis as an opportunity to rethink
urban resilience from a broad and nuanced public health
perspective. Questions that he raises includes how to design a
more adaptable city that maximises capacities for change in both
its architecture and urban design as well as how do we undo
the rigidities of the “masterplan”? Referencing urban sociologist
Richard Sennett, how to design a city that works like an accordion
– where people can spread out when necessary and vice versa?
What we need to do is design a more equitable city without the
internal densities that have proven so deadly. 5
That means that the spread of pandemics in cities is not just
about combating density – it’s also about addressing the underlying
inequalities that force people to live in unhealthy environments
and shoring up neighbourhoods’ public health. If cities are going to
respond better to future pandemics, they are going to need stronger
health infrastructure for the most vulnerable – and housing policies
that right historical wrongs. Pandemics, we are often told, reveal a
society’s hidden flaws. The coronavirus has shown that many cities
remain highly polarised and unequal. That is especially true for
urban centres where nearly a third of the country’s population lives.
As Coburn put it, “We have not, in the United States, addressed the
fundamental inequalities in cities, and we must – if we’re going to
have a healthier kind of urban environment.” 6
Andy Forbes from Forbes Real Estate Council has a different take
on this subject. While he agrees that the problem is not density or
cities, in his view, the dilemma lies in how we use our open space.
If we do not factor human experience into our decisions for highdensity
development, we give up green space and pedestrian
areas. The more we sacrifice quality of life, the more we give way to
smaller spaces that can result in packing people. As cities smartly
If cities are going to respond
better to future pandemics, they
are going to need stronger health
infrastructure for the most vulnerable –
and housing policies that right
historical wrongs.
densify, streets will play a critical role in supporting the new types
of connected spaces and communities for people. Density is
about healthy mobility, but also about creating destinations that
are a breath of fresh air. 7
Acuto argues that it is a bit early to take on lessons learned from
Covid-19, but you would probably have a big conversation about
the value versus the risks of densification. Clearly densification
is and has been the problem with some of this. Covid-19 puts
a fundamental challenge to how we manage urbanisation. He
suggests that rethinking density management is a key for longterm
survival in a pandemic world. 8 Part of this rethinking means
thinking about decentralisation of essential services. Looking
at where we might see radical transformation because of the
pandemic, it must be remembered that the need for changes will
have to be weighed against changes needed to support climate
change adaptation and mitigation.
If the city is spread out rather than further densified, much
better public transport connectivity will be required. What should
change is the decentralisation of services, better managing of
supplies and nets of smaller entities in food delivery. But should
is different from will. Will market forces sway the things we do
towards what is marketable and economically profitable versus
saying this clearly is a call for redundancy in public health and
public transport?
Silvia Taveras and Nicholas Stevens argue that it is the
combination of diversity and density that makes urbanity – it’s a
product of diverse social opportunities in close proximity. 9 This
is why densifying cities has been a goal for achieving healthy,
social and prosperous cities. However, the risks of Covid-19
transmission have strengthened anti-density discourses. It
is worth remembering that ways of fighting disease, such as
sanitation, were only possible because of their financial savings
and infrastructure efficiencies enabled by denser cities. Density
done right is safe, and it permits the human interactions and
connections we need – and which we are now missing.
The scrutiny is not just at the city scale, but is driving the creation
of an intermediary scale, the megaregion. The pandemic, Anthony
Flint, a Senior Fellow at the Lincoln Institute of Land Policy, argues
is exactly the kind of crisis that reveals what Europeans refer to
as “territorial cohesion.” 10 We generally think of three basic levels
of governing – national, regional, and local – but Flint states that
planners have long recognised that a lot of activity occurs at
the interregional scale, across geographically proximate clusters
of settlement. People may live in one region but commute to a
city in another or live in the city and travel to a second home in
another region. 11
The megaregion framework, he argues, has been useful for
all kinds of initiatives, from protecting wilderness that similarly
cross political jurisdictions to designing transportation policy
including inter-city high-speed rail networks, agreeing on
carbon emissions reductions or building more affordable
housing across a larger catchment of labour markets.
Flint notes that others who have studied megaregions say
the approach will be well-suited to coordinating re-openings,
or continuing closures, as regions manage the next phases of
the Covid-19 pandemic. And if that’s successful, regions may
use megaregions to make future improvements in housing,
transportation and the environment. Flint also points out
the observation of Robert Yaro, professor at the University of
Pennsylvania, that “it’s clear that actions to manage and recover
from the pandemic will require regional action, since the virus
doesn’t respect arbitrary political boundaries.”
Yaro argues that this kind of collaboration support the longerterm
steps needed to rebuild the economy – and build the
mobility systems and settlement patterns needed to mitigate
The evidence to date points to
much less transmission through
casual contacts in outdoor spaces
such as streets or parks.
against future events of this kind. Historically, states have often
resisted working together so for many it is gratifying to see how a
planning construct could become so useful in this desperate time
of need. Planners have been trying to illustrate the advantages
of a regional approach for many years. In the future megaregions
could become the policy vessel for new realities, including more
people working remotely, allowing them to spread out across
agglomerated labour and housing markets.
But the behaviour of people in a pandemic is probably not the
best guide to how they want to live their lives in normal times.
As Tavernise and Mervosh note, so much is unknown: what will
happen to housing prices, whose meteoric rise in cities was a big
part of what was driving people away? Or immigration – one of
the most important forces contributing to growth in cities? And
cities themselves will likely look different, as they begin to plan
for the possibility of pandemics. Undoubtedly, one of the biggest
questions for the future of cities is what becomes of low-wage
workers, who are an essential part of urban populations, but often
work in jobs impossible to do from home.
It is important to realise that cities, suburbs and rural areas can
all be hit by Covid-19. Regardless of size or density, all places need
to invest in the qualities that build residence. Strong regional
economies built from local assets can creatively adapt to shifting
demands. A flexible built environment that is green, walkable,
and has low barriers to new and mixed land uses can reduce
crowding and provide a platform for new businesses to launch
and grow. And inclusive and civically organised neighbourhoods
can communicate public health measures, promote compliance,
manage fear and support vulnerable individuals and businesses.
As Loh and Leinberger note, while fear of cities regarding
pandemics may be misplaced, the solutions to such crises can
have a place everywhere. 12
REFERENCES
1 Schaper, O. 2020. “Defining the future of our cities: Five areas of opportunity for a post-pandemic world." Gensler, May 08, 2020.
2 Florida, R. 2020. “The geography of coronavirus.” Citylab, April 3, 2020.
3 Madden, D. “Our cities only serve the wealthy. Coronavirus could change that.” The Guardian, June 2, 2020.
4 Florida, R. 2020. “The geography of Coronavirus.” Citylab, April 3, 2020.
5 Pafka, E. 2020. “As coronavirus forces us to keep our distance, city density matters less than internal density.” The Conversation, May 14, 2020.
6 Osaka, S. 2020. “Does city living spread coronavirus? It’s complicated.” Grist, June 22, 2020.
7 Cohen, A. 2020. “Finding the right words: Smart density is city wellness.” Forbes, May 1, 2020.
8 Klaus, I. 2020. “Pandemics are also an urban planning problem.” Citylab, March 6, 2020.
9 Taveras, S. and Stevens, N. 2020. “Cities will endure, but urban design must adapt to coronavirus risks and fears.”
10 Flint, A. 2020. “Covid-19.”
11 Flint, A. 2020. “Covid-19.”
12 Loh, T. and Leinberger, C. 2020. “How fears of cities can blind us from solutions to Covid-19.”
52
53

WATER
WATER
THE GOOD,
BAD AND
UGLY
in South Africa’s water compliance
The recent publishing of the Blue and Green Drop reports is a significant step forward in
disclosing the water and sanitation crisis our country finds itself in after nearly a decade
of silence about a slow onset disaster we in the water sector all know too well is unfolding.
BY BENOIT LE ROY*
An opinion piece from the SA Water Chamber CEO
That the No Drop report is not published is still a concern
as this is about the non-revenue water (NRW), which is
reportedly at a staggering national average of 41% with
physical losses at around 37%. As a country, we cannot afford to
augment our water supplies into a leaking system, so this aspect
is as important as the water quality and wastewater qualities
focused upon in the Blue and Green Drop programmes.
We need to understand what brought us to this crossroad,
without dwelling on the negative, to identify and understand the
root causes and then embark on the remedial actions required.
This crisis is no different to the Eskom one, this article was written
during ongoing load shedding, although it’s far more serious as
there are no substitutes for water while energy has a plethora
of options from generators to candles, wood/biomass, paraffin
lamps, rechargeable appliances, gas and the list goes on without
omitting renewables that are out of the reach of most of our
population, unnecessarily so.
Firstly, the Blue Drop deals with potable water systems (from
the production systems to the bulk delivery pipelines and
distribution networks). These are three different and distinctive
systems where generally:
• Potable water production is produced by water boards directly
under national government’s control as the single shareholder
and water service authorities (WSA) under district municipality
control, which is local government. These systems produce the
water in bulk and disinfect before conveying in bulk to their
clients that are generally industry, Eskom and municipalities.
Mostly, the water board water quality is of an acceptable
standard with district municipalities not so.
• Bulk conveyance systems generally boost pressure and
54
disinfection so that the residual chlorine is compliant at the
client’s reservoir.
• The client, typically a municipality, then distributes the
compliant water to their clients via hundreds to thousands of
kilometres of pipelines, pump stations and reservoirs. These
municipal systems also require disinfection and pressure
boosting to ensure sufficient volume at the delivery points
with adequate chlorine residuals.
Only 40% of the potable water delivery systems achieved
micro-biological compliance to SANS 241. This indicates that
there is inadequate disinfection by municipalities. Irrespective
of the production origin, it is the water service provider’s
mandate to ensure that there is adequate disinfection in their
delivery system to comply to microbiological standards.
Secondly, the Green Drop deals with the wastewater from
municipality, state-owned enterprises, industry and Public Works
where around 90% are municipal owned and operated. A mere
2% of these wastewater systems achieved Green Drop status,
which means that 98% did not comply, which is a complete
system failure. The non-municipal systems achieved 83% of their
systems scoring above 50%, admittedly a low bar.
In both Blue and Green Drop cases the obvious non-compliance
is firmly in the mandate of local government. This is acknowledged
by the Ministry of Water and Sanitation without hesitation with the
principal reasons for non-compliance given as:
• Non-payment for water
• Substandard infrastructure upgrades, extensions and renewals
• Non-commissioned newly constructed systems
• Failed O&M monitoring
• Insufficient skills employed
This is a time bomb. So, let’s discuss how we must remediate this
collapse of our municipal water systems that are key to support
any decent economic activity and to offer some dignity to all our
citizens. The root causes are generally:
• Dereliction of duty by city councillors
• Deployment of cadres and unskilled staff
• Inadequate revenue in the water system
• Substandard infrastructure
DERELICTION OF DUTY
That we, as a country, have allowed our councillors to not be
held accountable is entirely on our shoulders. This has allowed
governance collapse as we see daily with potholes, for example.
The water infrastructure is mostly underground and so out of
the way and not on anybody’s agenda until the taps run dry and
sewage overflows into roads and houses.
My suggestion is that municipalities that receive national fiscus
grants in the form of their so-called equitable share, should be
incentivised to meet, amongst other metrics, 90% compliance
to not only receive their full grants, but also at least 50% of their
annual salaries. It will very rapidly drive totally different behaviour
when one's own budgets and salaries are on the line. I strongly
believe that this is the only way forward on this KPI.
SKILLS SHORTAGE
The skills shortage is driven by several factors from cadre
deployment to simple ineptitude. Water and wastewater systems
are licenced with the Department of Water and Sanitation and must
have certain levels of skills to comply to their licence conditions
from Class one to Class six operators, for instance, where these skills
are simply not employed. The Water Services Act of 1997 amended
in 2013 makes this a legal requirement. It is tantamount to
sabotage and is like using a flight attendant to fly an airliner. How
did we get here? The Auditor-General needs to include this metric
on a quarterly basis and non-compliance should lead to criminal
prosecution of councillors and responsible officials without fail.
This will resolve the situation rapidly.
INADEQUATE REVENUE
Since the introduction of “free water” we have effectively been
the designers of our water system demise. With a recent Stats SA
report stating that 59% of our households do not pay for water,
READ REPORT
THOUGHT [ECO]NOMY
greeneconomy/report recycle
it is impossible for the remaining 41% to sustain the system.
Food is a basic human right but it is not for free. Why should
a complex service like water be free? It simply does not make
sense. Everyone should pay, albeit proportionate to their levels
of affordability.
That municipalities get away with not paying their bulk
water provider, some R14-billion in 2021, is simple theft and
cannot be allowed to continue and these payments should be
made before councillor salary payments to ensure sustainable
water service provision to communities and businesses.
SUBSTANDARD INFRASTRUCTURE
The system used to require an owner’s engineer that would protect
the municipality’s investments in infrastructure. Why has this key
function either failed or no longer practiced? In the absence of such
checks and balances the system becomes open to failure through
corruption and incompetence.
If we as a country do not stem the decline of our water system,
we will experience a total collapse, which is not an option. We
must reinstate infrastructure project governance of the higher
order. We did it well before, so it’s possible.
The Good is that we have a national government that has
admitted the failures and it is overtly looking to remediate the
situation. The Bad is that local government is in total disarray
with the most worrying collapse of their water systems and
seemingly no urgency in rectifying. The Ugly is the vulnerable
water infrastructure that has induced unnecessary hardship on our
country’s poorest with the KwaZulu-Natal floods merely reinforcing
our state of decay.
I sincerely believe that because we now have all the facts on the
table, that we as a country can embark on a road of the recovery
of our water security with all the tools available to catalyse the
Water and Sanitation Masterplan and the National Infrastructure
Plan 2050 that are, in effect, plans to marshall the rebuilding of
our economy and country for the benefit of all.
THE GREEN DROP NATIONAL REPORT 2022 | THE BLUE DROP PROGRESS
REPORT 2022 | Department of Water and Sanitation [April 2022]
In 2008, the Department of Water and Sanitation (the then Department of Water Affairs)
introduced the Blue Drop and Green Drop certification programmes. The Blue Drop certification
programme seeks to protect citizens from the hazards associated with contaminated drinking
water and the Green Drop programme seeks to protect the environment from the hazards
associated with polluted wastewater or sewage.
While there is primary legislation which deals with these aspects, these programmes are
intended to augment and compliment the normal legislative and regulatory provisions.
The first Blue Drop and Green Drop reports were released in 2009 and each year thereafter
until 2014. There was a break in the department’s undertaking, but it has now resuscitated
the programmes. To this end, the Green Drop National Report 2022 was released in April 2022
and the Blue Drop report is due in March 2023. The Blue Drop Progress Report 2022 is available
in the interim.
Since the introduction of
“free water” we have effectively
been the designers of our water
system demise.
* Benoît Le Roy is the founding member and CEO of the South African Water Chamber NPC, CEO of Enviro-One, advisory board member of IFAT Africa and operations director of Nexus Water Alchemy.
55

GREEN TECH
GREEN TECH
Above and below: The Atlantis Change Challenge 2022 aims to create awareness around the concepts of a green economy and introduces the
ASEZCO’s objectives to the youth.
ATLANTIS CHANGE CHALLENGE 2022
Atlantis Primary and High School pupils have for a month had the
opportunity to take part in the Atlantis Change Challenge and show
how renewable energy can bring positive change to communities.
Many of the pupils knew little about renewable energy before
taking part in the challenge.
Working in collaboration with Soapbox South Africa, a
number of workshops were held to introduce the students
to the renewable energy concept and to also help them start
with building their prototypes. Equipped with the workshop
teachings and enthusiasm, the students applied themselves and
gained a thorough understanding of green tech to come up with
practical solutions.
Ten high school teams participated, and first prize in the high
school’s category went to the Atlantis School of Skills for their
elemental classroom solution model, with Atlantis Secondary
School in the second and third place with their Keeping it Green
and Infinite Energy models. Ten primary schools also took part,
and Team Hybrid, Fantastic Four and Team Renewable Energy,
all from Wesfleur Primary School won the first, second and third
place prizes for primary schools. West Coast College also joined
the challenge, building incredible models.
The fully-fledged
state-owned enterprise
In the last two years, the Atlantis Special Economic Zone has made significant strides in
putting the company on the right track to begin doing business with investors.
The Atlantis SEZ is surging ahead with an all-inclusive
strategy to build a strong power-producing plant. The
SEZ is expected to attract R3.7-billion in investments
over the next two decades.
BY ATLANTIC SPECIAL ECONOMIC ZONE
Building a Special Economic Zone is akin to constructing
a city. It evolves gradually. The Atlantic Special Economic
Zone (ASEZ), unlike other SEZs in the country, does not
have a decade to get off the ground. We must move much more
quickly and set a good example.
When the 2020 fiscal year began, the ASEZ had no business
scheduling, no land, no capital and were still on Wesgro’s books
because we were unable to open our own bank account due to
the lack of a business scheduling and no offices.
The Atlantis SEZ Company (ASEZCO) is now a fully-fledged
state-owned enterprise and the land acquired from the City
of Cape Town, through a shareholders’ agreement, is now on
ASEZCO’s balance sheet. Our first tranche of capital for civil works
in the zone has been approved and we have been independent
of Wesgro since 1 April 2022. We now have a debt-free asset of
R60-million with all the necessary systems and structures in place.
The above is our greatest achievement. ASEZCO prides itself
on the work we do with the Atlantis community. Some of the
programmes we have successfully implemented are to be
celebrated as much as the above two milestones.
One of the aims of establishing the Atlantis SEZ was to
unlock the underlying economic value of existing and
under-utilised infrastructure through the creation of a
green tech manufacturing hub.
Situated on the West Coast 40km from Cape Town, the
SEZ capitalises on the province’s booming renewable
energy and green technology sector. It supports
the manufacturing sectors to become component
manufacturers for the renewable energy industry.
Top row, centre: Jarrod Lyons, CEO, ASEZCO, says that
the company runs enterprise and skills development
programmes to afford opportunities for employment
in the sector.
56
57

ENERGY
A great location for green
tech manufacturing
Niveshen Govender, CEO of SAWEA.
INDUSTRIALISATION THROUGH
LOCAL MANUFACTURING
The South African Wind Energy Association has reaffirmed its push for sector industrialisation
by advocating for increased local manufacturing.
BY SAWEA
The Atlantis Special Economic Zone (SEZ) for
Green Technologies is located on the West
Coast of South Africa, in the Cape Town Metro.
The zone is dedicated to the manufacturing
and provision of services in the green tech
space. Wind turbines, solar panels, insulation,
biofuels, electric vehicles, materials recycling
and green building materials are examples of
green tech that are welcomed.
If you are a manufacturer, service provider
or supplier to green tech value chains, the
SEZ may be a great place to locate. It offers
the benefits of co-location, access to strong
markets, a development-ready area, great
support and incentives, and an attractive skills
base to recruit from.
www.atlantissez.com
Led by South African Wind Energy Association (SAWEA) the
industry has set unambiguous local manufacturing targets
with a specified timeframe. Furthermore, the Association
has reiterated that its approach to the industry’s growth is to
persistently deliver new wind power generation to the grid
responsibly and sustainably, which should be aligned to the South
African Renewable Energy Masterplan (SAREM) that falls under
the Department of Trade, Industry and Competition (dtic).
Estimating that the sector can deliver 1.6GW per year, in line with
the country’s energy roadmap, local content targets of between
56% and 61% by 2030 is the projected goal. The majority of this will
be achieved by locally manufactured wind turbine towers and steel
anchor cages, but also includes smaller components, equipment
and related services.
“The necessary research will be conducted to quantify and
define exactly what new or additional components will be added
to the current mix to achieve these local content target thresholds,”
says Niveshen Govender, CEO of SAWEA.
Considering the targets set by the Department of Mineral
Resources and Energy (DMRE) and dtic are currently pegged at
40% local content, and the wind energy industry has achieved 47%
exceeding the 43% commitment, the Association has outlined the
required policy certainty and procurement criteria if it is to achieve
these new power generation targets and fulfil its role in stimulating
the economy simultaneously.
In its recent response submission to SAREM, SAWEA outlined
the conditions that the renewable energy sector requires to
meet these local manufacturing targets. Foremost a stable and
consistent pipeline with foreseeable and predictable timelines
between renewable energy procurement rounds is necessary
to attract significant investments to rebuild the manufacturing
sector and create a local market based on its competitiveness
and value-add.
“We are working on delivery solutions to the industrialisation
agenda, which is rooted in strong local manufacturing capability.
To achieve this, we need to address market conditions and investor
certainty off the back of rolling procurement rounds and offtake
over the next 10 years. This will allow the sector to develop
its supply chain to ensure product quality and compliance, while
delivering jobs and clean power to South Africa in line with the
favourable pricing tariffs that the sector offers,” adds Govender.
Market certainty is the most
important aspect to building a local
manufacturing industry.
Furthermore, SAWEA has stated the need for the industrialisation
policy to offer sector incentives to allow for robust local capabilities,
so that the wind industry can compete with international markets,
while supporting local manufacturers to become competitive for
export markets.
“Transformation goes hand-in-hand with the industrialisation of
the wind power sector. And market certainty is the most important
aspect to building a local manufacturing industry. Hence, we
require the DMRE to provide consistency, in line with the IRP2019,
to kick-start industrialisation by upfront certainty on a number
of REIPPPP rounds and their primary local content framework,”
concludes Govender.
To find our more, contact Jarrod Lyons, Investment Facilitator, jarrod@greencape.co.za.
59

WASTE
SUSTAINABLE IT:
transforms e-waste challenge into opportunity
Most organisations are heavily reliant on IT assets that require regular upgrades for almost
all operations. Responsibly managing the resulting e-waste is not only a legal requirement
but an opportunity to implement sustainable IT and circular economy practices.
A
staggering 50-million tons of e-waste is generated around
the world every year. With the pace of technological
innovation and the Covid-19 pandemic spiking demand
for electronics, global e-waste volumes are projected to grow
to 75-million metric tons per year by 2030. Less than 20% of
e-waste globally is officially documented as properly recycled.
That means most electronics being discarded end up in landfills,
where the items are incinerated or buried, leaking harmful toxic
chemicals such as mercury or lead which pose environmental
and health risks.
In South Africa, the National Environmental Management
Waste Act, 2008 stipulates that all reasonable measures must be
taken to:
• Avoid and minimise the generation of waste
• Reduce, reuse, recycle and recover waste where generation
cannot be avoided
• Ensure waste is treated and disposed of in an environmentally
sound and safe manner.
CIRCULAR ECONOMY PRACTICES
“To meet the obligations, all South African companies must
reduce and manage their e-waste. Companies need to move
from a linear ‘produce, use and discard’ approach to a circular and
more sustainable ‘produce, use, reuse and recycle’ approach,” says
Kwirirai Rukowo, general manager of Qrent, a division of InnoVent
Rental and Asset Management Solutions.
“Circular economy practices enabled by innovative business
models manage the first, second, and third lifecycles of IT assets
responsibly. This not only maximises the lifecycle of a company’s
IT assets but also reduces e-waste, maximises re-use and recycling
opportunities and supports responsible end-of-life disposal. In
addition, it allows companies to reap the benefits of sustainable
IT, such as reducing costs, meeting sustainability or ESG goals
and improving investor and stakeholder confidence, without
negatively impacting the bottom line.”
PRACTICES IN IT MANAGEMENT
Monitoring IT requirements and assets across business units
within the organisation provides a complete view of how
effectively the entire organisation’s IT needs are being met. The
right IT asset tracking solution will collate valuable information,
such as accurate data about how many IT assets a company owns,
which employees are using the devices, what new devices or
upgrades are required now and, in the future, and how each asset
is disposed of at end-of-life.
ACCESS TO EQUIPMENT
“The traditional model of outright device ownership, funded by
expensive capex, is fast being replaced by access to equipment found
in hardware-as-a-service, subscription, leasing or rental models,”
explains Rukowo. “The right model eliminates the hassles of 100%
ownership of IT assets, including capital outlay, maintenance, delayed
upgrades, and the responsibility for correctly disposing of harmful
e-waste.” Innovative models such as subsidised finance models help
businesses finance and manage technology assets in their first life,
by eliminating the need for expensive capex.
REFURBISHING OR REMANUFACTURING
IT equipment that no longer satisfies the user’s original needs
is not necessarily obsolete and should be brought back into the
circular economy to be repaired, refurbished or re-used for other
purposes, extending the lifecycle to extract maximum value.
Giving technology a second life reduces the amount of e-waste in
landfills, preserves natural resources, reduces the quantity of new
products being manufactured, drives down greenhouse gas
(GHG) emissions and limits overall footprint.
RESPONSIBLE DISPOSAL
The lack of disposal policies can create a large amount of e-waste for
companies that leads to further issues such as data security, space
constraints and storage costs. “Replacing and updating a company’s
technology necessitates disposing of old equipment without
contributing to environmental hazards while also protecting your
data, which requires a more complex strategy,” explains Rukowo.
“At the end-of-life stage for electronic devices, a professional and
specialised IT asset disposal programme is required to provide
secure data sanitisation ensuring confidential data on the devices
are safely removed to avoid a data breach; and also, to provide the
correct disposal of outdated IT assets.”
Unviable equipment must be disposed of by accredited
service providers in a responsible manner, in accordance with
high industry standards for environmental stewardship.
60

Answering the call for
infrastructure-led, socioeconomic
recovery through
public-private collaboration
The Olifants Management Model (OMM) Programme is a collaboration between Commercial
Users, represented by the Lebalelo Water User Association, and Government. As bees in a
hive understand the need for synergistic co-existence, the OMM Programme aims to
achieve synergy between the public and private sector and, in doing so, improve
socio-economic growth through the cost-effective provision of potable and
bulk raw water infrastructure to defined areas in the Limpopo Province.
Olifants
Management
Model (OMM)
Programme
lebalelo.co.za/omp