Anglo, AngloGold and Sasol strut their stuff on the decarbonisation catwalk

7 Nov 2022

It’s become almost a catwalk contest for big greenhouse gas emitters to see which one can slash its carbon footprint the most and the soonest. Some revealed their green outfits this past week.

Anglo American, AngloGold and Sasol are giants of the corporate and South African landscape, and they all have massive historical footprints, for better or worse.

One such footprint is that of carbon, and for many greens it is more like the fingerprints at the scene of an environmental crime, especially in the case of Sasol, Africa’s largest greenhouse gas (GHG) emitter after Eskom – when the latter works.

But we live in a new age in which environmental, social and governance concerns – ESGs – are at the top of the corporate agenda, and companies are in a race to slash their carbon footprints.

This is a response to public and investor concerns arising from science, and increasingly companies have to engage in a beauty contest to attract capital. Big emitters will not only find it harder to entice investors or raise finance, but they will also find markets shunning their products.

The trio took a stroll down the decarbonisation catwalk this past week to model their new green outfits.

In its quarterly market update, AngloGold Ashanti announced a new carbon emissions reduction target to achieve a 30% absolute reduction in its Scope 1 and Scope 2 GHG emissions by 2030, using 2021 as the base.

It said it would do so “through a combination of renewable energy projects, fleet electrification and lower-emission power sources".

“The capital cost required to achieve these reductions over the coming eight years is anticipated to be about $1.1-billion, of which $350-million is expected to be funded by AngloGold Ashanti and the remaining $750-million through third-party funding.”

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Meanwhile, Anglo American provided market updates on its carbon neutrality, biodiversity and responsible mining assurances, and its platinum unit published its maiden climate change report.

The global mining giant, which last year spun off its thermal coal assets in South Africa, has a 2040 target of operational carbon neutrality and in 2018 said it aimed to cut GHG emissions by 30% by 2030.

“On-site energy requirements are the largest source of our operational emissions and we are making good progress towards their abatement. By 2023, all our South America operations will have 100% renewable electricity supply and, for southern Africa, we have partnered with EDF Renewables to develop 3GW-5GW of clean generation capacity,” the company said.

The South American transition to renewables is impressive and suggests it can be done in other places with abundant resources such as sunshine (hello, South Africa). There are challenges: mining green metals such as copper and platinum group metals still comes with an environmental footprint, and its wider targets are more than seven and 17 years down the road, respectively.

But the ball is clearly rolling in the right direction, and Anglo is known for its technical prowess. So is Sasol, and, as my colleague Tim Cohen recently noted, it can “science the shit” out of stuff.

Think of coal-to-fuel, which also put it on the road to being a carbon colossus. The scientific seeds of its fortune are now the social seeds of its destruction, and so it needs to replant itself in the fouled soils of Mpumalanga and the Free State.

At a briefing on 3 November, Sasol held a climate change round table. Sasol and steelmaker ArcelorMittal SA had already unveiled plans to jointly develop carbon-capture technology to produce sustainable fuels and chemicals and green steel.

It has a “net zero” target by 2050 and a 30% GHG reduction by 2030, in line with its peers.

“Sasol is rising to this critical challenge and we are playing our part in the decarbonisation of the South African economy,” CEO Fleetwood Grobler said.

Sasol has a three-phase approach: strengthening its financial position because a technical metamorphosis does not come cheap, followed by the integration of renewables, including gas, for feedstock, and a massive decarbonisation pivot.

“The journey towards net zero by 2050 is where we reinvent ourselves through accelerated decarbonisation pathways using green hydrogen and sustainable carbon sources.

“Multiple pathways are being progressed which involve Sasol playing a leading role in the energy transition in southern Africa,” Grobler said.

Gas – which is not without its critics – and green hydrogen are seen playing leading roles in Sasol’s reinvention. Responding to a question about the 2030 target, Grobler said it was the product of a “long and hard debate” and was not “a pie in the sky ... It’s backed by plans that are executable and feasible”.

Can Sasol reinvent itself? Time will tell. But like Anglo, it’s pretty good at science. And investors are watching the catwalk. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R25.

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