Nombasa Tsengwa, CEO-designate of JSE-listed Exxaro Resources, one of the country's biggest coal miners, says the company aims to stop mining coal within 30 years.
"The goal is that by 2050 we will have eliminated carbon emissions from our operations. That means we will have shifted the coal assets that are in our hands."
Of Exxaro's total coal revenue last year of R28.9bn, exports contributed 35% - but, Tsengwa says, export earnings could have been higher were it not for bottlenecks on the railway line to Richards Bay caused by vandalism, copper theft and derailments.
She says these problems will be exacerbated by the recent mob violence in Gauteng and KwaZulu-Natal.
To be blind … and not
— Nombasa Tsengwa
participate in the
transition to green
energy would be
irresponsible
CEO-designate, Exxaro Resources
"Transnet has had a huge impact on our business even before the riots. This is going to add more to the wounds we've been experiencing."
From both a personal and a business point of view the riots were "shocking, absolutely shocking", she says.
Tsengwa will replace incumbent CEO Mxolisi Mgojo when he retires in 2023, to become Exxaro's first woman CEO.
She will lead the company, which makes 60% of its revenue from coal and is one of Eskom's biggest suppliers, into a green energy future as part of its alignment to the Paris Agreement on climate change - and she is not going to waste any time doing so.
"Looking into the future we recognise that climate change is a reality that we need to take very seriously and do something about."
She sees it both as a moral imperative - "as a good corporate citizen" - and an essential business strategy.
"If we were to be blind in terms of what is going on and not participate in the transition to green energy it would be irresponsible," Tsengwa says.
"For the sustainability of our business we have to participate. We've given ourselves five to 10 years to make very recognisable shifts in the way we do business and in the commodities that we are mining."
The company already generates 239MW of renewable energy from two wind farms in the Eastern Cape. Her goal is to increase this to around 2GW within 10 years.
The fact that Exxaro plans to stop extracting coal and start generating and distributing green energy doesn't mean it will get out of mining, Tsengwa says.
"Our challenge is not mining, our challenge is in what we mine."
At the same time as Exxaro decarbonises and reduces its coal footprint it will switch to mining the "new age" minerals and metals that are used in the renewable energy industry, from power generation to batteries, electric vehicles and other infrastructure.
R28.9bn
Exxaro’s revenue from coal last year,35% of it from exports
"We are not bad miners, we are good miners. But unfortunately the commodity that we mine is a fossil fuel that we need to get out of in a reasonable period of time."
Exxaro intends leveraging its existing mining capabilities to be a big player in the renewable energy space, she says.
It's a journey that began 10 years ago when Exxaro formed a joint venture with Tata Power to build the wind farms in the Eastern Cape.
The plan to boost its green energy output to 2GW in 10 years will involve merging with or acquiring businesses in the distributed generation space and providing services to the renewable energy sector and other mining companies.
As part of the plan, Exxaro has appointed a new MD for energy operations, Roland Tatnall, who Tsengwa says has a good track record in the renewable energy sector and is looking for skills to bring on board.
"We're not going to switch off coal tomorrow. That would be highly irresponsible. Coal is still very important as part of the energy mix in this country and other developing countries we export to."
The company's strategy is to examine its current business and ask how it can reduce its carbon footprint.
"One of the critical things we're doing is to use our renewable energy capability for self-generation."
Exxaro is looking to build an 84MW solar plant to provide energy for its Grootegeluk coal mine in Limpopo, and later extend that concept to its other mines and the rest of the mining industry.
"That's how we see our growth going forward. Lifting the self-generation cap to 100MW has really opened the gates for companies like us."
She says the company is not just responding to market pressure as investors signal they're no longer willing to put their money into mining fossil fuels.
"We're doing what we've always done, which is to contribute to the industrialisation of this county in ways that are appropriate to the needs of the time."
Meanwhile, Exxaro is investing in technology to remove impurities from the coal it supplies to Eskom, although Tsengwa concedes that the extent to which coal can be "clean" is debatable.
"You cannot remove all the impurities out of coal but there are a lot of carbon capture technologies being looked at across the world."
Exxaro supports research by Wits University and others into this and other areas such as the storage of renewable energy.
Tsengwa obtained a master's degree in botany at Eastern Illinois University in the US before doing a PhD in genetic engineering and agronomy at the University of Maryland.
On her return to SA she served as a deputy director-general in the department of environmental affairs & tourism, focusing on the reduction of "dirty" industrial emissions.
As a result of this work, Kumba Resources recruited her as a general manager in its safety, health and environment department in 2003.
Four years later, she joined Exxaro and became executive head of its coal operations.
She sees no contradiction in this.
"I got to understand how you can be a responsible miner where you really integrate environmental standards into operations, making sure that whatever you take out of the soil, you do the best you can to rehabilitate behind you and return the environment as close as possible to what it was."
When she went to Exxaro, she was "sceptical about the ability of miners to do the right thing", but her intention was to challenge the organisation to mine responsibly, she says.
"I wanted to ensure that the environmental aspects of mining are not just seen as a sideshow but are integrated as part of mining, just as was done with health and safety in the past."
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