By Sabine Dall’Omo, Chief Executive Officer at Siemens Sub-Saharan Africa
The energy intensive industries, including mining, manufacturing, electricity, and water industries, contribute more than 20% of South Africa’s gross domestic product (GDP). A smooth Just Energy Transition (JET) benefits close to a million people employed along these value chains, and the whole country. But to get this right, we need a combination of pragmatism, smart innovations, and investment. Looking at mining specifically, I believe we need to prioritise three approaches if we want to achieve a successful just transition.
- More technological innovation in mining
Innovative digital technologies can make both the traditional and new uses of mining more operationally efficient, safe, and sustainable. Mining is needed to produce consumer goods and electrical products, and looking to the future, it is needed for renewable energy, electric vehicles, and energy storage systems, with the considerations of the current global demand on resources for the global energy transition and in the absence of an established circular economy for resources.
We believe technology can build a transitional bridge between the past and future of mining. That is why Siemens is developing innovations to optimise the mining lifecycle, and to ensure smooth mineral processing plant operations. If we can connect plant systems, we can ensure that mining knowledge workers are better prepared to respond to issues before they become costly situations. Improved software, digital lifecycles and data-driven decision-making are vital for better efficiency. And by improving efficiencies and providing transparency, great ideas can be brought to life faster, improving competitiveness across the mining lifecycle. This means more profit, more jobs, more innovation, more business stability and sustainability, and a greater contribution to SA’s GDP.
An enormous opportunity also exists in Africa to use technology to improve Environmental, Social and Governance (ESG) monitoring and reporting. The tracking of ESG criteria in mining is becoming critically important in light of the European Union and specifically Germany’s new supply chain legislation which requires tracking to the source of a commodity to see how it was mined and processed, and whether human rights and environmental standards were followed. Innovation makes mining safer and improves the footprint it leaves in local communities.
- Smarter off-grid mining
If we are to overcome SA’s energy crisis and build a resilient economy, our mines and other heavy energy users must go off-grid. There is however more to it than simply transitioning to renewable energy resources. Developing and sustaining a decentralised, decarbonised energy system requires the convergence of grids and the management of advanced microgrids to seamlessly integrate power from renewable energy sources to a mine’s off-grid power supply.
Technology we already have in use around the world in places like Australia is helping miners to run more successful renewable energy projects at mine sites. This technology helps miners to adapt to changing conditions, and to do more detailed reporting and analysis for operational and management purposes. It is vitally important to simplify the use of renewable energy for mines and to help provide mines with cost-effective and reliable power supply to make going off the grid worth their while.
- Private partnerships in our ports and rails system
For us to roll out wind, solar and other renewable energy innovations at the scale required to achieve carbon neutral economies, we firstly need to be able to move the essential minerals we need for this effort without hinderances. Minerals from the mines in South Africa’s interior must make their way to renewable energy factories around the world safely, quickly, and affordably.
Rail and port systems in South Africa and across the continent are in dire need of investment for maintenance, security, and expansion. In most cases this infrastructure is government operated. I believe public-private partnerships or other forms of investment can help ensure the necessary capital flows to properly maintain this infrastructure for everyone’s benefit.
Mining companies have an important role to play, for instance in ensuring that trains are sufficiently loaded so that costs can be covered, and rail networks can be continually upgraded. Mining companies, investors and off-takers of the minerals also need to be made part of the security solution along these vital transport routes. Multifaceted infrastructure partnerships will benefit not only the mining industry – it will benefit governments, economies, and the Just Transition as a whole.
Conclusion: we must create the right conditions for public-private investment
Local and international solutions are needed along the mining value chain, to help realise the JET in South Africa. While companies like Siemens and others have internationally honed and locally adapted technology and expertise along the supply chain for a cleaner energy future, other players can offer innovative financing or export solutions for the local ecosystem.
President Cyril Ramaphosa recently stated that it will cost close to ZAR1.5 trillion for the implementation of the government’s JET Investment Plan – to build infrastructure, planning and implementation capacity, skills development, economic diversification, innovation, social investment, and inclusion. Mining will no doubt play a big role in that investment picture.
To attract the large investments, we need to transition mining and other heavy industries. Our current energy crisis should not distract and discourage us from creating greater multilateral cooperation between international organisations, the private and public sectors, and individuals, to promote, invest and engage in the energy transition.
South Africa’s energy transition has enormous potential to create millions of sustainable and stable jobs in years to come and to ensure a safer future for people and the environment and ensuring South Africa remains competitive in the global value chain. If we can make highly mutually beneficial long-term public-private partnerships work, we can successfully transition South Africa’s mining sector, like many other thriving mining countries around the world.