John Nkosi of Impala Platinum on sustainability in mining

Below the surface

Sustainability in mining is about providing solutions that are practical, profitable and permanent, says John Nkosi, group head of sustainable development at Impala Platinum

Below the surface

With reams of sustainability considerations With reams of sustainability considerations that are underscored by a tough regulatory environment (inclusive of the investment pressure that mines are under to disclose climate risk, carbon ratings and the like based on demonstrating environmentally responsible practices), and to yet maintain a profit, it is close to impossible to define a simple message around sustainability.

What Impala Platinum (Implats) has done, explains John Nkosi, group head of sustainable development, is to formalise five goals that, while broad, ‘protect and strengthen the Implats licence to operate’.

In essence, the five goals direct how the mining group takes care of people, profit and the environment, highlighting terms such as ‘transparency’, ‘zero-harm’, ‘development, compliance’, ‘best practices’ and ‘value-add’ – all of which direct the mine ‘to shape an organisational culture of performance and care’, says Nkosi. ‘Goals around aspects of sustainability, environmental and social development have been in place at Implats for more than a decade. These are revised on an annual basis depending on needs and available resources. For example, over the past two years, our efforts have also been mapped to align with the UN Global Goals for sustainable development, and identifying Implats’ specific top priorities inclusive of reporting and progress indicators.’

Progress is likely the most challenging because, while boxes can be ticked against known requirements, to create greater sustainable value for all its stakeholders while enhancing its role in society, mines still have to build a resilient business that is cash-generative and profitable. This is poignantly true for Implats.

‘As price takers, the prices achieved for our metals impact profitability and therefore the amount of resources available to invest in our people, communities and operations,’ he says.

‘Trade wars, Brexit, negative sentiment towards diesel engines and rising geopolitical tensions have exerted downward pressure on platinum prices and threatened the very existence of the industry.’

However, some relief has come from stronger palladium and rhodium market prices as a result of accelerated demand due to stringent environmental regulations regarding car emissions, which – as Nkosi points out – have resulted in much improved financial performance for PGM producers.

‘If sustained, this will allow the industry to preserve jobs and positively contribute to socio-economic challenges through taxes and royalties, as well as pursue impactful community-development initiatives and invest in technologies that improve safety and environmental performance.’

Not that Implats isn’t doing enough already. Its portfolio is designed to be resilient to challenging operating and pricing environments. For example, it has assets at the lower end of the cost curve with increased exposure to palladium and rhodium, and all this comes with a greater diversified geographic exposure.

‘While we are committed to playing our part in global efforts to reduce greenhouse gas emissions, there are increasing opportunities to use platinum-catalysed fuel cells that provide zero-emitting, carbon-free energy in electricity and mobile applications,’ says Nkosi. ‘We are working with government and academic institutions to establish a special economic zone for the development and manufacture of such fuel cells, with one currently undergoing rigorous testing. [This] year the focus will be to evaluate the commercialisation of this system.’

There is also the Implats ‘value over volume’ approach, which Nkosi says seeks to lessen the group’s exposure to high-cost, deep-level conventional mining, and grow exposure over time to shallower, lower-cost, mechanised operations with a strong bias towards palladium, which has the potential for sustained high prices.

‘The first phase of this, the restructure of Impala Rustenburg to a smaller and more productive mining footprint, is now complete, with the second phase currently under implementation. The acquisition of the Impala Canada asset, previously North American Palladium – which is mechanised and at the lower end of the cost curve with increased exposure to palladium – has enhanced the competitiveness of the group, which closed its 2019 financial year with 37% of all assets now mechanised,’ he says.

Combined, six main operations – namely Impala Platinum, Impala Refining Services, Marula, Two Rivers, Zimplats and Mimosa – produce some 1.53 million oz of platinum and 910 000 oz of palladium annually, with the assistance of some 50 000 employees and contractors. It is they, and their broader communities, who receive a considerable chunk of Implats’ sustainability budget.

Housing projects, which in themselves create jobs, is one such example. In total the mining group has built 3 400 homes in SA; upgraded road, power and water infrastructure in host communities; and provided access to quality education.

‘Preferential procurement and development of community-based businesses ensures social, economic and environmental transformation,’ says Nkosi. ‘However, beyond what we as a company do, or what the industry and country does, the only way to ensure livelihoods, societal progress and economic growth is to recognise the value of our natural resources and to extract them responsibly in order to safeguard the Earth for future generations.’  demonstrating environmentally responsible practices), and to yet maintain a profit, it is close to impossible to define a simple message around sustainability.

What Impala Platinum (Implats) has done, explains John Nkosi, group head of sustainable development, is to formalise five goals that, while broad, ‘protect and strengthen the Implats licence to operate’.

In essence, the five goals direct how the mining group takes care of people, profit and the environment, highlighting terms such as ‘transparency’, ‘zero-harm’, ‘development, compliance’, ‘best practices’ and ‘value-add’ – all of which direct the mine ‘to shape an organisational culture of performance and care’, says Nkosi. ‘Goals around aspects of sustainability, environmental and social development have been in place at Implats for more than a decade. These are revised on an annual basis depending on needs and available resources. For example, over the past two years, our efforts have also been mapped to align with the UN Global Goals for sustainable development, and identifying Implats’ specific top priorities inclusive of reporting and progress indicators.’

Progress is likely the most challenging because, while boxes can be ticked against known requirements, to create greater sustainable value for all its stakeholders while enhancing its role in society, mines still have to build a resilient business that is cash-generative and profitable. This is poignantly true for Implats.

‘As price takers, the prices achieved for our metals impact profitability and therefore the amount of resources available to invest in our people, communities and operations,’ he says.

‘Trade wars, Brexit, negative sentiment towards diesel engines and rising geopolitical tensions have exerted downward pressure on platinum prices and threatened the very existence of the industry.’

However, some relief has come from stronger palladium and rhodium market prices as a result of accelerated demand due to stringent environmental regulations regarding car emissions, which – as Nkosi points out – have resulted in much improved financial performance for PGM producers.

‘If sustained, this will allow the industry to preserve jobs and positively contribute to socio-economic challenges through taxes and royalties, as well as pursue impactful community-development initiatives and invest in technologies that improve safety and environmental performance.’

Not that Implats isn’t doing enough already. Its portfolio is designed to be resilient to challenging operating and pricing environments. For example, it has assets at the lower end of the cost curve with increased exposure to palladium and rhodium, and all this comes with a greater diversified geographic exposure.

‘While we are committed to playing our part in global efforts to reduce greenhouse gas emissions, there are increasing opportunities to use platinum-catalysed fuel cells that provide zero-emitting, carbon-free energy in electricity and mobile applications,’ says Nkosi. ‘We are working with government and academic institutions to establish a special economic zone for the development and manufacture of such fuel cells, with one currently undergoing rigorous testing. [This] year the focus will be to evaluate the commercialisation of this system.’

There is also the Implats ‘value over volume’ approach, which Nkosi says seeks to lessen the group’s exposure to high-cost, deep-level conventional mining, and grow exposure over time to shallower, lower-cost, mechanised operations with a strong bias towards palladium, which has the potential for sustained high prices.

‘The first phase of this, the restructure of Impala Rustenburg to a smaller and more productive mining footprint, is now complete, with the second phase currently under implementation. The acquisition of the Impala Canada asset, previously North American Palladium – which is mechanised and at the lower end of the cost curve with increased exposure to palladium – has enhanced the competitiveness of the group, which closed its 2019 financial year with 37% of all assets now mechanised,’ he says.

Combined, six main operations – namely Impala Platinum, Impala Refining Services, Marula, Two Rivers, Zimplats and Mimosa – produce some 1.53 million oz of platinum and 910 000 oz of palladium annually, with the assistance of some 50 000 employees and contractors. It is they, and their broader communities, who receive a considerable chunk of Implats’ sustainability budget.

Housing projects, which in themselves create jobs, is one such example. In total the mining group has built 3 400 homes in SA; upgraded road, power and water infrastructure in host communities; and provided access to quality education.

‘Preferential procurement and development of community-based businesses ensures social, economic and environmental transformation,’ says Nkosi. ‘However, beyond what we as a company do, or what the industry and country does, the only way to ensure livelihoods, societal progress and economic growth is to recognise the value of our natural resources and to extract them responsibly in order to safeguard the Earth for future generations.’

By Kerry Dimmer