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The renewables revolution in African mining and its impact on ESG

January 2024
 by Jess Shelver

The renewables revolution in African mining and its impact on ESG

January 2024
 By Jess Shelver

Africa stands at the brink of a groundbreaking transformation, bringing sustainable development and a brighter future to the continent. As it embraces renewable energies, positive disruption is leading to cleaner, more efficient, and economically viable mining operations. This transformation not only strengthens Africa’s position in the global economy, but also demonstrates its commitment to responsible resource management and presents a compelling case for investment from the rest of the world.

The exponential growth of renewable energy in Africa is evident in the Financial Times’s list of Africa’s Fastest Growing Companies of 2023. This unprecedented renewable energy growth paves the way for Africa to strengthen its global economic standing. It presents an exceptional opportunity for international investors and companies to participate in the journey, harnessing the continent’s renewable potential while contributing to its economic and environmental progress.

A natural fit for Africa’s mining industry

Renewable energy technologies, including solar, wind, and hydropower, are being seamlessly integrated into the mining sector in Africa, facilitated by its rich natural resources and abundant sunlight and wind. These technologies bring a host of advantages: slashing greenhouse gas emissions, lowering operational costs, and enhancing energy security.

Solar power, in particular, is transforming African mining operations. With technological advancements and declining solar panel costs, mining companies are increasingly turning to solar energy, reducing carbon footprints and boosting profitability by cutting energy expenses and dependence on costly diesel generators.

Wind energy projects have also gained traction in regions with consistent wind patterns, providing clean and reliable energy for mining operations while stimulating local economies through job creation and infrastructure development.

Hydropower, another renewable energy source, is also being harnessed across the continent to provide stable electricity for mining operations. Dams and small-scale hydroelectric projects are now integral components of sustainable energy solutions in many African countries, providing a reliable power supply even in remote mining areas.

The reputational and ESG benefits of renewable energy

Africa’s mining industry has traditionally grappled with resource-intensive operations, environmental concerns, and a significant carbon footprint. There’s a notable shift as it acknowledges the substantial potential of renewable energy solutions, not only to drive operational improvements, but also to address reputational challenges. As Africa embraces renewable energies, it displays an unwavering commitment to responsible resource management and a brighter, more sustainable future. This commitment extends to enhancing its environmental, social, and governance (ESG) credentials, showcasing Africa’s pivotal role in fostering a greener, more equitable, and prosperous global landscape.

Embracing renewable energy mitigates reputational issues related to environmental sustainability, social impact, and ethical concerns by reducing carbon emissions and promoting cleaner practices. Africa’s commitment to sustainable and responsible mining enhances the standing and credibility of its mining companies in the eyes of stakeholders and the public. By reducing their carbon footprint, these companies attract environmentally-conscious investors and gain a competitive edge in a global market increasingly focused on sustainability.

Addressing ethical concerns with the move to renewable energy in mining also aligns with Africa’s broader goals of sustainable development. Renewables improve access to energy for local communities, foster economic growth, and contribute to job creation, elevating the quality of life for individuals across the continent.

Powering positive disruption

Industry leaders have long been calling for change and disruption in order for the African mining industry to move forward. Now, with the inclusion of numerous renewable energy companies in the FT’s list of Africa’s Fastest Growing Companies, these companies are putting that change and disruption into practice. Transformation is sweeping through the African mining industry, with renewable energies taking a pivotal role in shaping a progressive and sustainable future. Our team will be at the South African Mining Indaba from 5 to 8 February 2024. Please get in touch with Jessica Shelver should you or your company wish to discuss how Digitalis can support and promote your ESG objectives

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