Environmental stewardship

Energy and climate change

Mining is an energy-intensive industry. We need a consistent and cost-effective supply of energy for our existing operations, as well as secure access to energy for our future projects.

Actions to reduce energy consumption

Reducing our energy consumption has a number of important benefits for the company, including curtailing costs and cutting our greenhouse gas emissions. The benefits extend beyond our company – reducing emissions is a global challenge.

During 2014, we piloted key elements of the new AngloGold Ashanti Energy Management System (EnMS) at mine sites in Brazil and Tanzania. Using foundational elements from the ISO50001 Energy Management Standard, we refined our process and plan to expand the scope and function of the EnMS to sites in the Americas and Australia in the first instance. The EnMS focuses on four key principles:

  1. Establishing a system to promote continuous improvement;
  2. Proactively managing power generation costs and utility contracts;
  3. Achieving sustainable improvements in energy efficiency; and
  4. Protecting operations’ energy security over their anticipated life of mine.

Simultaneously, we continue to analyse opportunities to increase our use of low-carbon generation, including hydroelectric power, renewable energy, and energy recovery systems.

Supplying gas-generated power to Tropicana and Sunrise Dam

With the development of the Tropicana mine in Australia in the same region as the company’s existing Sunrise Dam operation, and with the softening of the gas market over the past two years, it has become economical to invest in pipeline capacity to transport gas to both operations and fully converting the existing power generation facilities to gas.

The new pipeline is expected to run some 293km from Murrin Murrin via Sunrise Dam Gold Mine to Tropicana Gold mMine under a transportation agreement with a pipeline operator. Long-term tariffs for the supply of power have been negotiated with existing power providers. The project was approved in July 2014 and by the end of 2014 good progress had been made, with the main commercial arrangements having been completed for gas delivery, purchase and power generation, the completion of all environmental processes and the engagement of a contractor. First gas for power generation is planned for the beginning of 2016.

While the capital cost of the pipeline is just over US$100 million, the savings achieved more than justify the investment. The project is also expected to give a high level of certainty to energy costs. Other benefits anticipated to result from the project include the reduction of road transport, a corresponding reduction in road maintenance costs, reduced exposure to the safety risks associated with road transport and reduced greenhouse gas emissions. Natural gas produces approximately 30% less greenhouse gas emissions than diesel, and contains fewer particulates.

Energy consumption and security in South Africa

In South Africa, much of our mining is conducted in deep underground mines, making them particularly energy intensive. Electricity is mainly sourced from fossil fuels, meaning that operations in South Africa also contribute a high proportion of our greenhouse gas emissions. In 2014, South Africa accounted for 36% of our total energy usage (2013: 36.1%) and 65.2% of our CO2 emissions (2013: 66.2%).

Reducing our energy consumption and intensity in this region is a key focus area and we are adopting innovative technologies to help us achieve this. This impetus is heightened by concerns relating to medium- and long-term energy security, given the national energy utility’s (Eskom) ongoing constraints. We have worked closely with the national utility Eskom over many years in reducing our energy offtake, particularly during periods of peak demand. One example is a newly-installed demand monitoring system for both Vaal River and West Wits, designed to assist in daily load management. We have also completed projects to support continuous energy efficiency improvements such as optimisation of the water system and at Great Noligwa. The AngloGold Ashanti Technology Innovation Consortium (ATIC), established to develop solutions to the technical challenges in deep underground mining in the South Africa region, addresses energy related challenges as a key component.

A further impetus for reductions in energy use is the proposed introduction of a carbon tax in South Africa. Based on current schedules, this is expected to come into effect from 2016. Read more on AngloGold Ashanti’s position on these proposals.

Our position on the proposed carbon tax in South Africa

Since 2010, when the South African government first announced its intention to introduce a carbon tax, we have actively engaged in dialogue with government, industry partners and other experts to help ensure that the regulations are appropriately tailored to the South African business context. In February 2015, the Minister of Finance confirmed the government’s intention to introduce the tax on 1 January 2016.

Whilst we support the introduction of a price on carbon, we have emphasised to government that the change will be introduced following years of sustained increases in electricity prices. Almost all of AngloGold Ashanti’s emissions in South Africa are Scope 2 emissions, i.e. emissions which result from the purchase of electricity from the national electricity utility, Eskom. The impact of the tax on the business will therefore be felt primarily through further electricity price increases passed on by Eskom as a result of the tax. Furthermore, electricity and fuel prices already include levies to address climate change, so elements of a “carbon tax” are already present.

We are currently conducting a detailed assessment of the impact of the carbon tax on our supply chain and the cost of goods and services sourced in South Africa. The study will assess the impact of increases in the cost of certain key products which consume electricity or which emit carbon in their production. These are primarily explosives, grinding media and chemicals. We plan to continue to update this analysis as further details of the tax are published.

We continue to engage the South African government on the proposed legislation. Engagement takes place through Business Unity South Africa, Business Leadership South Africa, the Chamber of Mines and the Industry Task Team on Climate Change, comprising a grouping of energy-intensive industries.

Industry’s engagement is focused on working with the National Treasury and the Department of Environmental Affairs to clarify the details of the legislation and ensure that it takes account of the operating challenges faced by the mining industry.

Energy use and climate change strategy

Our energy usage is inextricably linked to our greenhouse gas (GHG) emissions and hence our climate change strategy. Though AngloGold Ashanti faces few immediate operational risks from a climate change perspective, there are several risks that are likely to develop at some of our operations, in particular in areas that already suffer from extremes of temperature and high seasonal variations in weather conditions. These include changes in rainfall patterns, the potential for flooding and drought, adverse impacts on communities and their agricultural livelihoods and potential impacts on rehabilitation activities.

Mitigation efforts currently focus on achieving operational efficiencies to reduce the intensity of energy use. There is both a cost and a climate change mitigation imperative associated with these initiatives as the bulk of the company’s energy is sourced from fossil fuels. Examples of activities being undertaken in South Africa are provided on this page. Switching from diesel to gas in Australia will reduce our direct GHG emissions.

Over the longer term, we expect to gain a deeper understanding of the adaptation risks associated with climate change. This will require more detailed modelling of climate change scenarios as well as improved data and statistical analysis. We plan to explore cost effective means to undertake this important work in 2015.

More details of our strategy, risks and impacts are given in our annual CDP reports.

Key performance indicators
Energy consumption and intensity
Total GHG emissions and intensity
 

We measure energy and emissions intensity per tonne of rock treated rather than by ounce of gold production because transportation and milling of rock are energy-intensive and drive our energy consumption. We only report some estimated scope 3 emissions G4-EN17 (i.e. those incurred our value chain) in our CDP report. A detailed assessment undertaken in 2009 showed that these are a negligible proportion of total emissions.

Following a detailed analysis led by the National Business Initiative, the Eskom grid emissions factors for several years were revised dutring 2014. This resulted in material changes to the company's indirect GHG emissions in South Africa and the group. The years affected are 2010, 2012 and 2013 and these are restated here.

More detail on our GHG emissions and climate change risks can be found in our CDP reports.

NOx, SOx and other significant air emissions
Oxides of nitrogen (t)
 20142013201220112010
Argentina 367.1512807406,31610,054
Cerro,Vanguardia 367.1512807406,31610,054
Australia 703.190001,193
Sunrise Dam 703.190001,193
Brazil0193642940
Serra Grande0193642940
Tanzania0NR1617 
Geita0NR161718
USA 26.49212169186 
CC&V26.4921216918627
Group 1,097 1,6859896,81311,292
Oxides of sulphur (t)
  20142013201220112010
Argentina00000
Cerro Vanguardia00000
Australia 0.70007
Sunrise Dam0.7 0007
Brazil05280
Serra Grande05280
South Africa00001,220
Vaal River00001,220
Tanzania005129
Geita005129
USA3.4225252324
CC&V 3.4225252324
Group 4.13032431,260

NR = Not reported

Obuasi status update Water use