Global trade envoys and bankers attending the Investing in African Mining Indaba last week say the US's decision to pull out of the Paris Agreement should not discourage South Africa and Africa from pursuing an energy transition to a low-carbon economy.
US President Donald Trump signed an executive order withdrawing the US from the 2017 Congress of Parties (COP) Paris Climate Agreement which compels signee nations to reduce greenhouse gases, adopt green energy technologies and regularly update the COP on progress.
The move comes as the EU is set to introduce the Carbon Border Adjustment Mechanism (CBAM), which will introduce a tax on carbon-intensive goods such as cement and steel starting in 2026.
UK trade commissioner for Africa John Humphrey told TimesLIVE Premium that CBAM is about environmental protection and carbon leakage and trying to level the playing field from the environmental perspective.
“The UK is providing a lot of support. For example, it has come through in South Africa for the just energy transition, all of which is about decarbonising the economy and making sure you have industrial development at the same time that you are actually trying to deal with the environmental challenges that we all have.”
He said he did not believe there was any conflict between environmental preservation and industrialisation, adding that the least cost energy that can be delivered in most markets, including the UK, is often renewable energy.
When we talk of critical minerals, let’s not limit them to green economy. Because if we limit it, we are going to use standards set by others and not our needs. That’s why, for example, you will find that coal is becoming a critical mineral in Europe. For us, it is a significant mineral.
— Minister of mineral and petroleum resources Gwede Mantashe
“Onshore wind [in the UK] has the lowest cost per [unit]. So, I don’t think those things are necessarily in conflict. So, I think the UK is already trying to contribute to, for example, the just energy transition, the carbon credit markets and those things that will allow the equalisation of production while protecting the environment.”
Addressing the Investing in African Mining Indaba, minister of mineral and petroleum resources Gwede Mantashe said the department has conducted a study of the mining sector which would inform the formulation of a critical minerals list. This list will likely include fossil fuels including coal.
“When we talk of critical minerals, let’s not limit them to green economy. Because if we limit it, we are going to use standards set by others and not our needs. That’s why, for example, you will find that coal is becoming a critical mineral in Europe. For us, it is a significant mineral.”
Research analyst at Nedbank Corporate and Investment Banking Thobela Bixa said as various countries reassess their ability to decarbonise, the energy transition will be done at a pace that countries can afford as the mining sector supports the transition with critical minerals.
“The energy transition is happening and it must happen. But at the same time, I think there has been a realisation that it’s not [an] energy transition at all costs. It has to be done in a balanced way such that countries don’t put themselves into risk situations where they don’t actually have security of energy.”
He said even as global multilateral ties appear to become more fragmented, companies will begin to appreciate the value of each other’s trade ties and assets.
“Countries like the US have started to come back to Africa to reinvest. A great example is the Libito Corridor in the DRC, the US had pretty much pulled out, but due to the vast copper (plus other minerals) resource. they had to come back because they need copper, and other resources from the DRC.”
Mintek CEO Molefi Motuku said South Africa remained endowed with enormous mineral reserves amounting to more than $2.5-trillion where PGMs were ranked first with 88% of reserves and manganese ranked second with 80% of reserves.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.