ESG, renewables and mining - Interview with Syrah Resources

ADRIENNE BAKER DIRECTOR Energy and Mines

Syrah Resources COO Julio Costa discusses how ESG is fundamental to their operational approach and what is needed for future successful renewables deployment in mines.

Julio Costa: The benefits of the solar and battery project are twofold: it will substantially improve Balama’s ESG credentials, by improving our energy usage efficiency on site and therefore lowering our carbon footprint; and secondly, it will also lower our operating cost base. So, the project makes both environmental and economic sense.

Regarding ESG credentials. On current estimates, the system will deliver a renewable energy penetration rate of almost 40% of the mine’s total power needs which, on a yearly basis will save over 13,000 tonnes of CO2 and 5.5 million litres of diesel. The solar hybrid system will give Balama one of the highest levels of renewable energy penetration of any off grid mine in Sub-Saharan Africa. Being able to reduce the cost of a substantial portion of the energy used on site, whilst also improving the operations ESG credentials makes this a very attractive project for us.

JC: Syrah has always had ESG performance strongly embedded into our DNA. Our ESG credentials are underpinned by ISO:14001 (Environmental Management) and ISO:45001 (Occupational Health & Safety) certifications at Balama and our performance and willingness to support the sustainable development of our host community.

Our ESG efforts at Balama have attracted official recognition including: 2019 Sector Leader in ESG Reporting by the Australian Council of Superannuation Investors (ACSI); AAMEG Africa Awards 2019 Winner - Best Innovation in Corporate Social Development for the design, construction and operation of the Balama Professional Training Centre; and, International SOS 2019 Duty of Care Awards finalist for leading Malaria Mitigation practices.

We believe operating with the highest possible ESG practices is the right thing to do and we do it with passion. We are absolutely seeing an ever-increasing focus on ESG by existing and potential customers and also increased scrutiny on ESG from our investors. End users are increasingly being held accountable for ESG, EV makers will increasingly need to demonstrate the product and emissions lifecycle of their vehicle to substantiate their “eco-friendly” credentials and customers will opt into supply with best practice ESG credentials. We are always very pleased when the topic of ESG comes up with end-buyers or other stakeholders. We are very proud of our ESG credentials and sharing the work that we do at Balama on this front with end-buyers, or any stakeholder, is always an easy and enjoyable conversation to have.

JC: As it is known, Africa is a very diverse continent with 54 countries.

The barriers will vary from country to country, however we can draw from our experience in Mozambique. We strongly believe that Mozambique is ever increasing its reputation as a balanced ground for sustainable development. The Mozambique Government Regulatory framework promotes and supports this type of investment and the bureaucracy is always open for dialogue in terms of sustainable development. Mozambique is also known to benchmark policies and approaches with other countries. A combination of factors made viable for us to pursue implementation of renewables and we noticed some difficulties and opportunities to improve along the way: • A clear national framework for regulations, incentives and taxes around renewables with a long term view • Deregulation and removing the barriers of entry for new energy providers will allow for healthy competition and will encourage renewable investment across all industries. • The development of local companies in the area of installation and maintenance • A long term view on energy security strategy for the country • Specifically to Mozambique, the development of new legislation regarding electricity with right level of consultation and consideration to renewables