In December 2007, CEO Mark Cutifani set a short- to medium-term target for the group of reducing energy consumption by 15% per ounce of gold produced and a medium- to longer-term target of reducing greenhouse gas emissions (GHGs) by 30% per ounce produced.
Says Cutifani, “Improving our energy efficiency just makes good business sense and I expect that we will be able to make some quick gains – reductions of between 10 and 15% – by improving what we do and how we do it.
“As far as climate change is concerned, there is no doubt that we as a company need to address the issue. I have set a stretch target for reducing greenhouse gas emissions on a per ounce basis of 25 to 30%. But I would rather we do that than set out to achieve only what we know we can achieve. Now we have the challenge of starting to look at a whole range of non-traditional means of attacking the problem.”
Cutifani addressed an internal AngloGold Ashanti climate change workshop in December 2007, attended by environmental personnel from around the group and other specialists. This followed the development of an internal position paper on climate change, including the opportunities and risks faced by the group, which is a precursor to a formal and public AngloGold Ashanti climate change position statement. The latter will be reviewed by the company’s EXCO by mid-2008.
As a first step, operations within the group have been tasked with undertaking a detailed baseline carbon footprint analysis by the end of 2008 and with developing and implementing action plans to effect significant reductions.
It is of particular significance to the company that the people most likely to be most affected by climate change are the poor who rely on subsistence and seasonal agriculture to lift them from poverty, many of whom may be part of communities and countries in which the company has operations. In addition to its own internal carbon emission reduction initiatives, the company believes that its integrated approach to environmental management and community development programmes should consider and address ways in which to mitigate the impacts of climate change on its host communities, through adaptation initiatives.
AngloGold Ashanti is a member of the International Council on Mining and Metals and hence both subscribes to its position statement and commits to report on its GHG emissions. In 2007, AngloGold Ashanti participated in the Carbon Disclosure Project (CDP) survey of the top 40 JSE companies. The CDP is a global initiative for reporting on GHG emissions and for ascertaining companies’ responses to climate change. The company’s response may be found at www.cdproject.net.
AngloGold Ashanti has committed to reporting in accordance with the GRI requirements –which include a number of energy and climate-related indicators – and will incrementally provide information on a company and group basis as this becomes available. For further information see our full GRI environmental performance indicators response (PDF - 575KB).
Some of the risks and opportunities for the company that have been identified are described below.
A specific area of interest to the company, which hosts many operations in developing countries, is the potential for emissions trading. Various GHG reduction and trading systems have been developed to enable companies to achieve a portion of their GHG reduction obligations through investing in projects that result in the global reduction of greenhouse gases. The South American operations are currently actively looking at specific opportunities.
While the company has in recent years looked into several possible CDM projects, these were not deemed to be viable for a range of reasons. Part of Cutifani’s brief to staff has been the directive to reassess CDM opportunities. An initial assessment of potential projects includes those associated with:
Says Andrew Mackenzie, Manager, Corporate Environmental Affairs, “The workshop has provided the impetus and targets needed to ensure that we can drive a group-wide response to climate change as a strategic company imperative. While we have a long way to go, looking back we have undertaken a number of initiatives on which we can build.”
Various GHG reduction and trading systems have been developed to enable companies to achieve a portion of their GHG reduction obligations through investing in projects that result in the global reduction of greenhouse gases.
Each ton of carbon dioxide equivalent reduced under the Kyoto Protocol’s Clean Development Mechanism (CDM) becomes a Certified Emissions Reduction (CER), which is tradable. The emissions reductions from CDM projects must be effected in developing countries. The developed country emitter (the investor) wins by achieving a portion of its target at a lower cost than would have been possible in that country and the host wins by receiving funds to improve technology and performance.
The EU Emissions Trading Scheme (ETS) is the largest scheme currently in existence although some US states and Australia have also announced systems. The ETS requires that credits are bought through the CDM. There are currently very few CDM projects in Africa, which is again an opportunity for the company.
As a member of the International Council of Mining and Metals (ICMM), AngloGold Ashanti is a party to the ICMM’s position on and commitment to climate change management and mitigation.
ICMM recently started a project to determine an energy efficiency metric that takes account of the challenges faced by mining and metals companies. AngloGold Ashanti is actively involved in the project. The issue is that, as a particular mine goes deeper and accesses poorer ore grades, energy consumption per unit of rock mined or ounce produced will rise, other matters being equal. This presents a challenge unique to the extractive industries.
The ICMM’s position on climate change commits its member companies to:
Concludes Mackenzie, “In addition to the agreement of the company’s formal climate change position, we are in the process of developing a comprehensive business strategy to take advantage of the opportunities and mitigate the threats presented by climate change. This will include reducing the company’s GHG emissions intensity; preparing for the likely impacts of climate change; providing opportunities for offsetting emissions; and facilitating the trading of carbon reduction credits.”
AngloGold Ashanti Annual Report 2007 – Report to Society