Any climate-related advocacy that we undertake or that is undertaken on our behalf through a third party, such as an industry association, should be in line with the letter and the spirit of our stated policy positions, and supportive of the goals of the Paris Agreement. We believe that effective policy is essential for providing the right framework of drivers and incentives to encourage coordinated, efficient and equitable response measures. There may be times when our views diverge from those of our trade association partners, in which instance we aim to ensure our views are noted and recorded.
We advocate for the accelerated deployment of all emission reduction technologies (per Article 10.2 of the Paris Agreement), including coal abatement technologies such as high-efficiency, low-emission coal-fired power plants and CCUS. We also encourage the development of low- and lower-carbon sectors such as renewables and gas, respectively. In all our climate advocacy activities, we are committed to compliance, transparency and accountability.
We transparently disclose our memberships of industry associations. Each entry below explains why we are a member of that association, any positions of responsibility that Thungela employees hold and our annual financial contribution. This disclosure enables interested parties to review our memberships and raise any questions or concerns.
We are a member of, and currently hold the chairmanship of, FutureCoal, a think tank of forward-focused participants across the coal value chain, driven to ensure that coal prospers sustainably from producer to end user. It represents industry leaders committed to building a sustainable pathway for the global coal value chain. FutureCoal recognises the objectives of the Paris Agreement and acknowledges the global shift towards decarbonised energy systems. However, coal remains responsible for 36% of global electricity production. It therefore advocates for an inclusive all-fuels and all-technologies international policy framework to support the sovereign rights of all coal-producing and consuming nations, and those nations that genuinely seek to support them.
FutureCoal recognises that we must modernise and mobilise to demonstrate coal’s versatility as a commodity that can provide long-term energy security, emissions abatement and sustainable development in line with a number of the UN SDGs. The organisation engages with members, governments and industry bodies to deliver the sustainable future that clean coal can bring to both economic growth and everyday life.
FutureCoal is actively driving Sustainable Coal Stewardship (SCS), which provides a pathway that supports extracting more value per tonne of coal. Value is determined and measured in both economic and environmental benefits. SCS does not prescribe what abatement opportunities should be adopted by any nation or company and encourages collaboration across the value chain to advance a progressive, innovation- and technology- led coal industry. It supports the right to choose and establish a coal ecosystem that includes options of efficiency, process improvements, health and safety, emissions reduction including carbon abatement, waste management and recycling, land rehabilitation, technology advancement and innovation. SCS comprises a range of initiatives in pre-combustion, combustion and post-combustion phases.
In 2024, FutureCoal published a report entitled Roadmap for a Sustainable Coal Value Chain that highlights the pivotal role of advanced coal technologies in today’s rapidly evolving global landscape.
We are a member of Minerals Council South Africa (MCSA), an organisation that advocates for its members’ needs. It represents 73 members, comprising 90% of South Africa’s mineral production by value across a range of commodities. The council takes on an advisory and leadership role, monitors progress and provides support for climate change challenges, promoting a just transition to a decarbonising economy and advancing the adoption of climate change mitigation and adaption efforts.
MCSA and its members are committed to participating in a responsible transition to a net zero carbon economy, prioritising climate resilient development. The MCSA board has adopted individual member commitments, which include a requirement for members to develop a climate change response with near-term (five to 15 years) Scope 1 and 2 emission reductions and net zero emissions by 2050. Members must also collaborate with supply chain partners to reduce Scope 3 emissions in their value chains and improve the transparency of their public reporting relating to climate change.
MCSA has developed a Climate Change Framework for the mining industry to assist members as they fulfil these commitments. The framework includes mitigation (reduction of Scope 1, 2 and 3 GHG emissions), adaption (risk mapping, planning for increased variability and intensity in weather patterns and shifting portfolio to adapt to changing demand for minerals) and just energy transition (minimising impact on employees, community engagement and public awareness, ensuring procedural justice is achieved and refining mine closure planning to account for the impacts of the energy transition).
Thungela provided technical comments on the adjustments to the emission factors for fugitive emissions proposed by National Treasury in the Draft Taxation Law Amendment Bill, Draft Sectoral Emission Targets for the mining sector, carbon budget allocations for the coal mining sector and the draft discussion paper on phase two of the carbon tax.
We participate in the Business Unity South Africa (BUSA) environmental sub-committee and climate change working group in our capacity as a member of MCSA. BUSA’s members are committed to working with government to move South Africa onto a path towards net zero and build resilience to the impacts of climate change. One of BUSA’s strategic objectives looks at the just transition towards low-carbon, climate-resilient and ecologically sustainable economies and societies.
In 2024, we provided technical comments on adjustments to the emission factors for fugitive emissions proposed by National Treasury in the Draft Taxation Law Amendment Bill, Draft Sectoral Emission Targets for the mining sector and the draft discussion paper on phase two of the carbon tax.
Thungela is a member of the Industry Task Team on Climate Change (ITTCC), which is a nonprofit association that includes a number of large companies. The organisation is supportive of South Africa’s international commitments to meet its climate change goals and gradual transition to a lower carbon economy. The ITTCC has commissioned studies on carbon pricing, the just transition, GHG pathways scenario development, and a post-2020 climate change mitigation system, among others, to input into policy development. The organisation encourages the knowledge sharing of best-practice approaches adopted by ITTCC companies.
Thungela participated in monthly industry information sharing sessions, including discussions on IFRS S2 reporting, carbon market mechanisms such as offsets and renewable energy credits, adaptation, CCUS and updates on the latest developments in climate change science.
The National Business Initiative (NBI) is a voluntary coalition of South African and multinational companies working towards sustainable growth and development. The NBI has multiple projects and partnerships designed to help member companies build their capacity to respond, and ultimately work collectively with government to develop solutions to climate change and emissions mitigation in South Africa. The NBI is a regional partner to We Mean Business and provides links with South African business and policymakers working on climate change and business. The NBI represents South African companies who have signed up to commitments by pledging their support for a low-carbon future. The NBI is also a local partner of the CDP, which has successfully integrated climate change into mainstream business thinking. The organisation informs members on how to respond to growing environmental and economic risks and opportunities that arise from climate change, the just transition, biodiversity loss and water security.
Thungela participated in NBI workshops and thought leadership sessions and provided input on climate adaptation and resilience in industry, and European and United Kingdom carbon border adjustment mechanisms
We are a member and hold the chairperson’s position at the Energy Intensive Users Group (EIUG), a voluntary and non-profit association established in 1999. The EIUG has a strong technical background and engages with government departments on the need for a cohesive approach to energy supply to ensure security of supply, stable pricing and a clear path forward on policy, within a just transition framework. The EIUG works in collaboration with the ITTCC and is fully committed to the transition toward a low-carbon economy. The EIUG aims to ensure that this is done in a manner and within a timeframe that protects and maintains the competitiveness of our economy. The group engages directly with government departments, Eskom and the National Energy Regulator of South Africa.
EIUG co-hosted its inaugural conference in 2024 with the C&I Solar and Storage Summit. The conference focused on various aspects of the South African energy industry, including the importance of decarbonisation, energy security, demand side management, and a long-term perspective on South Africa’s energy sector.
We pay annual membership fees to industry associations, with the amount based on each association. We also pay extra fees for specific projects when needed.
As a large mining company, we face numerous risks, many of which are volatile and uncertain. Managing these risks effectively requires agile decision-making and effective risk management strategies that mitigate exposure and harness available opportunities.
The board’s sub-committees oversee the integrated risk management process and receive regular feedback from management on all risk-related activities. They regularly assess all risk governance structures and lines of defence to ensure that roles, responsibilities and accountabilities for identifying, managing, mitigating, reporting and escalating risks and opportunities within the business are appropriately defined and responded to.
Climate risks are integrated into the baseline risk registers at all sites, and are managed as part of the integrated risk management process. Thungela’s risk management approach is described in more detail on page 164 of this report and on page 34 of the Integrated Annual Report.
Understanding our exposure to climate-related risks and opportunities
The future pathway of climate-related risks and opportunities remains highly uncertain. We have used broad scenarios, as defined by the Intergovernmental Panel on Climate Change (IPCC) and the IEA, as potential pathways (defined on page 60) to help understand the potential risks and opportunities our business is exposed to with respect to climate change over two timelines: nearterm (2030) and long-term (2050). This quantitative assessment included an examination of relevant acute and chronic physical climate risks, as well as market and regulatory risks, and changes in exposure under various climate scenarios.
These are grouped into two categories:
- Transition risks: These relate to the potential impacts on product demand, as well as impacts on the costs of production across our value chain associated with regulatory, technological and behavioural changes in the transition to a low-carbon economy.
- Physical risks: These relate to the potential impact on our operations, supply chain and surrounding communities from acute extreme weather events, as well as chronic shifts in climate patterns.
We address the resilience of our operations and host communities by ensuring that our sites include climate risk as part of their baseline risk assessments, and that our technical standards and guidelines include climate risks and responses. Furthermore, we aim to ensure that Social and Labour Plan (SLP) and corporate social investment (CSI) projects address climate-related risks and contribute to climate adaptation and resilience.