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5. From methane curse to carbon trading at Gold Fields
- Africa Institute of South Africa
- Chapter
- Additional Information
92 From methane curse to carbon trading at Gold Fields Letitia Greyling 5 ABSTRACT Gold Fields’ vision of being ‘the global leader in sustainable gold mining’ is a clear indication of what strategic drivers have been identified to differentiate it from other gold mining companies. For Gold Fields it is a strategic imperative to be able to flourish in a low carbon economy. As will be highlighted in this chapter, the company is recognised as a leader in the local mining industry when it comes to the management of carbon-related issues. This mining group recognises and understands the changes in the world economy around restructuring the current carbon-based economy to a low carbon one. Furthermore, it realises that these changes will impact on aspects of their business, ranging from carbon pricing in energy to stakeholder perceptions and views. Thecompanyhasthereforestartedimplementingvariousinitiativeswithintheorganisation to facilitate and manage this transition process. Amongst others, they have established key forums to deal with carbon-related management issues, guided by a group-wide Carbon Management Strategy that was reviewed and updated in 2011. Gold Fields uses the opportunities presented by the sophisticated market mechanisms that have developed around the carbon credit market. In 2010, the group became the first gold mining company in the world to utilise and sell Certified Emissions Reductions (CERs). The CERs refer to the financial securities used to trade reduced carbon emissions in a carbon trade deal. These funds were used to finance Gold Fields’ Beatrix Mine Methane Gas Project, a flagship breakthrough under discussion in this chapter. In this project, the company set the scene for using carbon credits to fund this and other greenhouse gas (GHG) and energy-saving projects at Gold Fields. The Beatrix case study speaks directly to how an innovative carbon credit project that showcases an organisation’s low carbon business case can play a role within a low carbon and green economy. From methane curse to carbon trading at Gold Fields 93 INTRODUCTION From methane curse to carbon trading, there is a clear green economy and low carbon breakthrough that emerged at Gold Fields’ Beatrix Mine situated near Welkom in the Free State province of South Africa. Gold Fields mining company was established more than 120 years ago, but in 1998 it transformed into the organisation we know today as a result of the consolidation between gold assets of Gold Fields South Africa Limited and Gencor Limited. Today, Gold Fields is the fourth largest gold-producing mining company in the world, and one of the largest un-hedged producers with operations and exploration sites across the globe, in South Africa, Peru, Ghana, Mali, Finland, Kyrgyzstan, Philippines and Australia.1 The company’s South African operations are mainly deep gold mines, making it environmentally a high-impact industry. This presents challenges that involve legacy issues and frequently require complex solutions. Although not without challenges, the organisation has been placing sustainability, and its related responsibilities, as a top priority for several years. In its efforts to act ethically and responsibly, the organisation annually participates (amongst others) in the Johannesburg Stock Exchange Social Responsibility Index (JSE SRI). Gold Fields was awarded the ‘Best Performer’ within this Index in 2011, having been amongst the best performers previously since the inception of the SRI in 2004.2 In the latest 2011 Carbon Disclosure Leadership Index (CDLI), an index that ranks companies listed on the JSE on their carbon emissions’ disclosure and reporting, the organisation was the sole winner, having come in joint-first in the 2010 review (up from the fifth position they held in both 2008 and 2009).3 For companies to qualify in the 2011 CDLI, they had to reduce their GHG emissions by at least 2,65 per cent from 2010, making the entry requirements and criteria stricter than previous years. Gold Fields was one of only two companies qualifying for this inclusion in the 2011 JSE 100 carbon performance leadership index. Internationally, Gold Fields (also listed on the New York Stock Exchange, National Association of Securities Dealers Automated Quotations (NASDAQ) and Dubai: GFI has been ranked fourth in the mining sector of the 2011 Dow Jones Sustainability Index (DJSI).4 The DJSI is one of the most recognised measures of the sustainability performance of listed companies on an international platform. The announcement was made at the 2012 World Economic Forum gathering in Davos and Gold Fields now finds itself ranked in the top 5 per cent of global resource companies when it comes to sustainability practices , and...