ERNST VENTER: Exxaro believes that looking at carbon and our carbon footprint and getting us as close to a carbon neutral company as we can is the right thing to do during our existence, to ensure that are a sustainable company going forward. And because of that we need to be up to date and up to scratch with what's happening in the world - what will happen after Kyoto and all of that. Exxaro two or three years ago realised quite clearly that the world is fast moving towards a low carbon economy. We are a company - if you look at our website - you will see we are not only producing coal which is a fossil fuel so if somebody talks about Exxaro they'll say “oh those guys that have a massive carbon footprint per capita" or however you want to express it. So we formed a focus group to say “well what are we going to do in the future to actually reduce that carbon footprint of ours". We've developed a three-pronged strategy. The first step is to become more energy efficient and by that I mean both from an electricity perspective as well as from a diesel perspective liquid fuel - so we have lots of programmes running there. The second thing is to employ more of cleaner technologies when we build new plants and we've got a lot of good examples of that. Our new Medupi plant at Grootegeluk is designed to be much more energy efficient than the current complex. We want to make that the sort of standard of our design etcetera. We've been spoiled to some extent in South Africa with low energy prices and this wasn't actually a factor when we considered design. But now it's become an integral way of life within Exxaro. Then the third thing is we also recognise that with this low carbon economy and with the energy security threat that exists in South Africa, and the high costs of electricity, that there is actually a business opportunity as well. This challenge is not just about circumventing and managing your risk. We believe that there's a big business case to be made to actually get involved in cleaner, renewable energy. And as you know, and we have made it public - we have the intent to establish a cleaner energy company which will produce energy with a much lower grid emission factor than the normal fossil fuels going into things like colour TV and wind - the co-generation etcetera. So that's why - firstly we believe it's a good thing. We believe that there is such a thing as climate change - there are a lot of debates, as you know - you can read - there are all sorts of news, but it's a fact and to make sure that the world is still here as it is 100 to 300 years from now... we are now living on this planet and we need not to waste the energy and resources that we have and that's why we're here.
HILTON TARRANT: Let's talk about that cleaner energy company focussing really on renewable energy. What is the timeline there - is this something that's 10 years away or is this something that's five years away, 18 months away?
ERNST VENTER: No, this is something that's imminent in the first quarter of next year. We are aiming through that new energy company a bid for window two of this renewable energy programme of the Department of Energy - you know they have these bid windows - I'm sure you're aware of the process. So we are aiming, if everything works out well to go to our board on 20 February 2012 to get our final mandates to form the company and announce the company. We've completed our partner selection because what we said is we're a mineral resource company - this is a cleaner energy company - a totally different sort of business model and we want to play it alongside Exxaro. We then looked for partners with the same sort of passion and commitment towards cleaner energy than ours to work with us in that company. And I can say we're quite far advanced towards the formation of that company as well as the branding that goes along with that. It will probably be mid-February next year before we bid for the second window of the REP process which is 6 March 2012. Read the full report here.
Source: Moneyweb.
