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Conserving natural resources and mitigating impacts
Climate change and energy management

In implementing our carbon management strategy, our focus remains on energy-efficiency projects

Our management approach to climate change and energy

Climate change has potentially significant implications for our activities, resulting both from governmental policy requirements as well as the physical impacts of a changing climate. A detailed review and assessment of the climate change risks and opportunities for Implats can be found in our submission to the CDP's Climate Change Programme, available at www.cdproject.net.

In implementing our carbon management strategy, our focus remains on energy-efficiency projects. Security of energy supply and rising prices are significant material risks for our operations in South Africa and Zimbabwe. Electricity consumption accounted for around 70% of our total energy consumption in 2014, 11% of our overall cash cost base. Our projected expansion into deeper operations that are more energy intensive, coupled with the proposed introduction of a carbon tax in South Africa in January 2016, emphasise the business requirement to focus on reducing and optimising our energy use.

As the scope for further energy efficiency and reduction initiatives at our smelters and refineries is minimal, our focus is mainly on mining operations. The South African operations work closely with Eskom and participate in demand-side management (DSM) programmes. We seek to improve operational and design efficiencies, incorporating best practice technology and processes. Our longer-term strategic investments include exploring a carbon neutral fuel source for our operations, and participating in collaborative efforts to develop fuel-cell technology.

We have determined an absolute GHG emissions reduction target of 5% by 2020 from the base year 2008 (year of first carbon footprint assessment), in line with our projected growth profile.

Our 2014 carbon and energy management performance

Total CO₂ emissions for 2014 amounted to 3 million tonnes, as compared with 3.8 million tonnes in 2013. The significant decrease is largely attributable to reduced production as a result of the strike action in 2014 at our Rustenburg operations, which accounted for 67% in comparison to the typical 75% of the Group total CO₂ emissions.

The bulk of our emissions (2.7 million tonnes) fall under scope 2 emissions which are associated with Eskom electricity usage, with the balance (0.3 million tonnes) arising from burning fossil fuels such as coal, diesel, petrol and industrial burning oil (Scope 1 emissions). Emissions intensity (tonnes of CO₂ per tonne of ore milled) in 2014 was 0.218, as compared with 0.206 in 2013. This has been impacted by the exclusion of Mimosa from the production figures. Additional data on our direct and indirect greenhouse gas emissions and our energy usage, by operation for each of the past five years, are provided in the performance table here.

Scope 1 and Scope 2 emissions

Scope 1 emissions 6% 94%Scope 2 emissions 94%

Implats conducts an annual greenhouse gas emissions assessment to understand the Group's exposure and identify areas for GHG mitigation and increasing efficiencies. To date, over R100 million has been spent on the implementation of energy conservation programmes, resulting in a 3.1% reduction in indirect energy usage. Following is a brief review of the principal energy-efficiency initiatives being implemented:

• Promoting the optimal use of compressed air systems at the Rustenburg operations, by examining equipment performance and ensuring the flow of compressed air is maximised during off-peak times and minimised during peak times, is anticipated to achieve a reduction of 7.8GWh per annum
• The conversion of all underground lighting at Rustenburg operations to a more energy-efficient lighting source is anticipated to reduce annual consumption by 15GWh
• Power factor correction equipment has been installed at Rustenburg and Mimosa with initial performance monitoring indicating an average 4% reduction in energy consumption, exceeding the anticipated 2.5% reduction
• Following the trial use of fibreglass reinforced plastic (FRP) fan blades at Mimosa, which proved to be more efficient and consume 35% less power compared to steel, a more robust high-efficiency underground auxiliary fan with proven energy savings similar to FRP blades was identified. Subject to approved funding, a replacement fleet of 75 auxiliary fans will be installed, with projected energy savings of $84 000 achieved per annum
• Our coal to biomass fuel-switch project aims to use bamboo as an alternate fuel source to coal. Initial testing confirmed the feasibility of using the biomass as an alternative, but raised concerns about the calorific content of bamboo and challenges associated with its cultivation. The project has been submitted for registration as a Clean Development Mechanism (CDM) to enable future carbon credit issuances.
• We are exploring opportunities to investigate alternative carbon neutral fuel sources. These initiatives are evaluated periodically to ensure effectiveness and validity.