Skip to main content

 

PERFORMANCE

NATURAL CAPITAL
   

MATERIAL ISSUES

Energy

  • Pricing and the availability of electricity
  • Business continuity and profitability
  • Investing in new technologies to increase energy efficiency

Climate change

  • Environmental aspects of climate change
  • The Venture’s production of significant quantities of indirect and direct greenhouse gas emissions (GHG)
  • Investing in new technologies to reduce emissions

Health and safety

  • Safety of employees
  • Health of employees
  • Training
  • Remuneration

Water

  • Use and availability

Waste

  • Incidents and compliance

Natural capital includes the natural resources and processes needed by an organisation to produce its products.

This includes renewable (timber and water) and non-renewable (fossil fuels and minerals and metals) resources and processes such as energy consumption, waste creation, emissions, etc. Without access to the natural capital contained in our mineral reserves and resources our business would not exist.

We maintain and enhance natural capital by:

  • reducing our dependence on fossil fuels;
  • reducing waste by reusing or recycling it whenever possible;
  • protecting biodiversity and ecosystems;
  • wherever possible, using renewable resources from well-managed and restorative ecosystems; and
  • managing resources and reserves efficiently.

 

Natural capital: climate change and energy

KEY POINTS – 2019

The CO2e generated per tonne of ferrochrome produced was
5.46tCO2e
(2018: 5.37tCO2e)

 

The energy use per tonne of ferrochrome produced was
15.08GJ
(2018: 14.67GJ)

 

Stakeholder impact

The Venture’s stakeholders benefit from its energy efficiencies, which have made it one of the lowest-cost ferrochrome producers in the world and the lowest-cost producer in South Africa.

Managing climate change and carbon emissions

The Venture focuses on understanding the current and future impact of climate change on its operations. Climate change risks are included in each operation’s risk assessment. It measures and interprets energy and greenhouse gas (GHG) data to identify areas of opportunity. The Venture continuously researches and identifies potential energy and GHG reduction opportunities and evaluates the feasibility of implementing these opportunities. It also actively participates in discussions on climate change legislation via various industry organisations.

The Venture’s efforts to continually evaluate and better its energy efficiency are in line with the societal demand to reduce the emissions of GHGs. It uses the Greenhouse Gas Protocol as an accounting and reporting standard for our emissions, which uses the emission factor of 0.945CO2e/kWh. This protocol was developed in partnership with the World Resources Institute and the World Business Council for Sustainable Development. It divides GHG emissions into different types, categorising them as either direct or indirect emissions.

A representative of the Venture served on the council of the Energy Intensive User Group (EIUG) during 2019. The Venture, which participates in the Ferro Alloys Producers Association (FAPA) environmental forum, represents the ferroalloys industry at Business Unity of South Africa (BUSA). The Venture’s representatives play a leading role in these forums and they comment on climate change and carbon tax legislation. The Venture also engages with government via these forums to ensure that the potential impact that the proposed legislation will have on our industry and Company is understood.

During 2019, the Venture again played an important role in the engagement process, which took place between business and the National Treasury on drafting carbon tax legislation. It also continued engaging with all members of FAPA to gain a common understanding of GHG emission factors for our sector and the calculation of the GHG emission footprint.

Climate change performance is included in the health, safety, environment and community performance indicators that the Venture uses as part of its performance appraisals.

The Glencore Alloys Group Environmental Manager is responsible for climate change-related issues in the Venture.

The Venture’s focus for 2020

The Venture will continue with its engagement processes and with identifying and further evaluating potential GHG mitigation projects.

While the Venture has not set any specific climate change targets for 2020, it will in future use the targets set as part of the Department of Environment, Forestry and Fisheries ("DEFF") carbon process to guide its target setting processes.

Understanding the Venture’s carbon footprint

The Venture generates GHG emissions from its smelting processes and from its energy use. The use of fossil fuels in the form of diesel and petrol in vehicles contributes directly to the creation of GHGs, and the electricity supplied from coal-fired power stations contributes indirectly to the creation of GHGs.

The Venture and Merafe are committed to minimising GHG emissions and improving our energy efficiency, and recognises the magnitude and importance of this challenge. The Venture also actively engages in public policy, specifically through collaboration with the DEFF on a carbon process aimed at estimating the country’s annual carbon emission.

The risks associated with climate change

Climate change remains a key longer-term risk for the Venture. The potential risks are complex in that they include operational risks such as business continuity, health and safety, environmental aspects and regulatory aspects. Risks are both physical and financial, for example, should the Venture’s operations be damaged by flooding and extreme storms, this could cause business interruptions. The reduced availability of water could also interrupt its business and could have health impacts.

Restatements

There have been minor restatement of numbers for 2016 to 2018 due to reporting improvements. None of these restatements are material or impact prior statements, representations or trends.

The Venture’s energy consumption

Total energy consumption in the Venture’s operations decreased in 2019. The energy use per tonne of ferrochrome produced increased from 14.67GJ/tonne to 15.08GJ/tonne. The energy consumption and performance of the Company in any year is dependent on the production performance in that year of the most energy-efficient plants in the Venture.

The Venture’s energy usage Energy use per tonne of ferrochrome produced

The Venture’s emissions

The Venture’s total Scope 1 (direct) and Scope 2 (indirect) emissions decreased in 2019. The CO2e generated per tonne of ferrochrome produced increased slightly in 2019. The emissions performance of the Company in any year is dependent on the production performance in that year of the most energy-efficient plants in the Venture.

GHG emissions CO2e generated per tonne of ferrochrome produced

KEY POINTS – 2019

The Venture’s total water usage decreased.

 

The Venture’s total water reused/recycled increased

 

Water conservation plans are in place at all the operations of the Venture

 

There were no high-potential environmental risk incidents in the Venture

 

The Venture had no environmental fines, penalties or prosecutions

 

Environment includes the natural resources and processes needed by an organisation to produce its products.

MATERIAL ISSUES

  • Water
  • Gas emissions
  • Waste
  • Biodiversity and land use

 

As Merafe’s corporate office has a limited impact on the environment this section of our report focuses on the Venture’s environmental approach, impact and performance. We rely on the Venture’s effective environmental policies and procedures to ensure our investment is managed responsibly.

An integrated approach to environmental responsibilities

The Venture’s long-term success depends on prioritising environmental issues and integrating environmental responsibility into its strategic planning, management systems and day-to-day operations. Management accountability is central to Glencore’s integrated approach, which reviews its environmental risks and opportunities annually as part of its business strategy and planning process. Each site has a comprehensive environmental management system in place. The system provides access to aspects and the impact of all activities, from pre-feasibility to the operational phase, including closure and rehabilitation. The Venture’s objective is to ensure environmental legal compliance, optimise its monitoring and measurement practices and to minimise and manage any waste and emission generation in an environmentally responsible manner. Environmental responsibilities are clearly included into legal appointments and job descriptions.

Water

Water is a finite and precious natural resource essential to the sustainability of the communities in which the Venture works. It is also necessary for its mining and metallurgical processes.

Water use and availability

The Venture’s operations work with the Department of Water and Sanitation ("DWS"), local communities, local authorities, the farming community and other industry users to ensure the sustainability of water resources and equitable access to water resources for stakeholders.

The availability of water is a key consideration when the Venture plans the expansion or construction of an operation. It uses the results of the environmental and social impact assessments ("ESIAs") it undertakes to guide its decision-making and to ensure it has the least possible impact on local water resources during the various phases of its projects.

All the Venture’s operations have water conservation plans. They have previously set water intensity targets and have measures in place to help them be as water efficient as possible. In addition, its operations are identifying possible water reduction projects.

The Venture’s water usage  
 

The water use in the Venture decreased in 2019 due mainly to the Venture’s use of reused/recycled water increasing.

Waste management and effluent and biodiversity management

The mineral waste produced by the Venture in 2019 was 4.7 million tonnes.

Mineral waste
Category 2019
tonnes
  2018
tonnes
2017
tonnes
2016
tonnes
 
Mineral waste – produced 4 690 652   4 364 269 4 289 911 4 177 546  
Non-mineral waste – disposed 13 521   15 041 14 396 9 279  
Non-mineral waste – recycled 29 297   10 056 11 386 7 575  

Incidents and compliance

It is always the Venture’s aim to have no environmental incidents at its operations. It monitors, reports, investigates and remediates any incidents that occur and applies lessons learnt to prevent similar incidents in the future. Its operations are required to report any environmental high potential risk incidents (“HPRIs”), including near-misses, that could have resulted in a category 4 or 5 incident, even when the actual impact was less significant. Environmental incidents recorded at the Venture’s operations also include incidents that occur as the result of contractor activity.

The Venture has had no environmental fines, penalties or prosecutions at its operations for the past nine years. The Venture achieved its goal of no category 4 or 5 incidents recorded in its operations in 2019 and no category 4 or 5 incidents have been recorded in the Venture’s operations for the past nine years.

Environmental incidents
Category 2019   2018 2017 2016  
Category 1 – negligible (causing negligible, reversible environmental impact, requiring very minor or no remediation) 77   52 50 61  
Category 2 – minor (causing minor, reversible environmental impact, requiring minor remediation) 22   7 16 14  
Category 3 – significant (causing moderate, reversible environmental impact with short-term effect, requiring significant remediation) 0   0 0 0  
Category 4 – major (causing serious environmental impact, with medium-term effect, requiring significant remediation) 0   0 0 0  
Category 5 – disastrous (causing disastrous environmental impact, with long-term effect, requiring major remediation) 0   0 0 0  

NOx and SOx performance

The Venture's emissions
Category 2019
tonnes
  2018  
tonnes  
2017
tonnes
2016
tonnes
 
NOx (oxides of nitrogen)            
Stack emissions (total mass) 1 113   1 032* 363 349  
SOx (oxides of sulphur)            
Stack emissions (total mass) 3 344   4 273   3 458 3 796  
Total particulates            
Stack emissions (total mass) 1 729   2 218   1 204 1 484  
The emission data is based on quarterly emission data which is used to calculate emission factors and then applied to the year.
* The nature of the operations at the Ventures semi-closed furnaces means that dilution air enters the air pollution control equipment. NOx is formed as a secondary emission through the air pollution control equipment due to the presence of nitrogen in the air. Small process changes in terms of gas volume and temperature can result in step changes in NOx emissions. The emissions at the Venture do not exceed any ambient standards for NOx or SOx.

Product stewardship

The Venture monitors and addresses the impacts and risks associated with the use of its products throughout their life cycles, including during stages outside of its control, such as use, recovery, recycling and disposal.

It works with national and international industry associations, its customers and suppliers to understand the environmental health and safety risks of its products and to find ways to mitigate these risks.

In terms of Registration, Evaluation and Authorisation and Restriction of Chemicals ("REACH"), all the products that the Venture exports to countries in the European Union have been pre-registered, with the relevant pre-registration certificates and numbers available. The Venture is also actively involved in REACH.

No products produced by the Venture, or their packaging materials, were reclaimed during 2019.

To ensure the quality of its products, the Venture aligns its systems with the requirements of ISO 9001:2015 and some of its smelters are certified. Its laboratories are ISO 17025 accredited, which ensures that the methods and equipment it uses are accurate.