Sustainable development

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Approach

Climate change is a key challenge of our era. We recognise the need to take meaningful action towards addressing its causes, and to help protect our employees, assets, as well as the communities and environments linked to our operations, against its potential impacts.

Moranbah North Power Station, Queensland

Our strategy

As an energy-intensive company, a major producer of coal and neighbour of many underdeveloped communities, Anglo American has identified three main strands of climate change-related risk to which the Group is exposed:

  1. The increase in energy and compliance costs associated with new policy measures, including potentially significant costs from carbon pricing.
  2. Changing expectations from our investors, communities, customers and suppliers.
  3. Increased risks associated with the physical impacts of climate change on our operations and neighbouring communities.

In response to these risks, our climate change strategy has three focus areas: operational excellence; investing in technology; and engaging and partnering with our stakeholders.

Operational excellence

The emphasis in the first phase of our climate change strategy is on identifying energy-saving and emission-reduction opportunities, setting ambitious emission reduction targets relating to site-level risks and opportunities, and developing high level plans for adaptation to regional climate change.

In 2011, we issued a new Group technical standard to manage energy and greenhouse gas (GHG) emissions performance at all our operations, and we are in the process of rolling out our energy and carbon management programme, ECO2MAN. In 2012, we analysed our performance data to identify where energy is being used, where the opportunities are to save it, and how to follow a standardised process to deliver savings. Each mine has a programme in place to continually improve how it manages energy usage, with targets to reduce its consumption in relation to a business-as-usual projection.

The new Group technical standard requires sites to identify their energy and GHG emissions-related risks and opportunities, integrate them into operational plans and establish appropriate measurement and reporting processes.

Our ECO2MAN programme helps us identify and prioritise energy efficiency and GHG savings opportunities and it is tied to our internal and external verification and assurance processes. We have also set medium-term energy and carbon performance targets.

Technology

With the energy we consume accounting for roughly 75% of our GHG emissions we are primarily focusing existing activities on identifying and implementing innovative technologies aimed at using energy more efficiently.

Achieving our long-term milestones in energy management hinges on identifying and implementing innovative, step-change technologies. We are researching many opportunities with key stakeholders, and we have invested nearly $200 million to date in low-carbon and energy-efficiency research and technology development, including $15 million in 2012. Our technology vision is to run cost-efficient, low-carbon (if not carbon-neutral) mines by 2030. Our technology development vision forms a critical part of our long term business strategy. In the belief that the large scale deployment of carbon capture and storage (CCS) technologies will have a critical role to play in addressing climate change, we participate in various research initiatives aimed at identifying commercially viable solutions for CCS. These include the US-based FutureGen Industrial Alliance, the Otway CO2 storage project in Australia, and the South African Centre for Carbon Capture and Storage.

In 2011, an important initiative was our investment in the renewable energy Kalahari Project. We have also been partnering with Johnson Matthey on the development of a technology for capturing and using ventilation air methane (VAM) from mine shafts, as well as examining opportunities with them relating to fuel cell technology.

In Australia, we hold a 20% interest in MBD Energy, which is undertaking applied research into an algal synthesiser process that involves entrapping CO2 from power station flue gases.

Engagement and partnerships

We continue to work with governments and our business peers to inform the development and implementation of efficient, effective and equitable climate change policies.

In South Africa, we are especially active in discussions around a carbon pricing policy and have welcomed the opportunity to participate in the debate and in the development of a solid fact base to influence an effective carbon policy aligned with the country’s development objectives. We are also working with the government regarding the national utility’s proposed increase in energy costs, which could see the country’s energy costs doubling over the next few years. In July 2012, Australia introduced its Carbon Pollution Reduction Scheme, with a $23 per tonne of carbon dioxide equivalent (CO2e) fixed price period for three years, moving to a flexible period (market-based emissions trading scheme) from 1 July 2015. The impact on our Metallurgical Coal business is already significant, and stands to escalate as production increases and new projects come on stream.Through our Platinum business we are partnering with the fuel cell company Altergy and the South African government to manufacture and market platinum-based emissions-reduction technologies locally and in other sub-Saharan countries. This collaboration marks the launch of the government’s strategy to develop a manufacturing-based ‘hydrogen economy’ and transform and expand uses for the country’s national resources.

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