CLIMATE CHANGE REPORT 2022
IMAGE PLACEHOLDER
Table of contents
01 Introduction Page
Our operations 2
Our strategy 3
Chairman’s statement 5
Chief executive officer’s statement 6
Our year at a glance 7
02 Governance 8
03 Risk management 11
04 Our strategic response to climate change 14
05 Metrics and targets 24
05 Appendices
Performance tables 29
TCFD Index 30
Glossary 31
Additional information 32
Thungela’s 2022 reporting suite
This report forms part of our overall suite of reporting documents for the year
ended 31 December 2022, and should be read in conjunction with the
Thungela Integrated Annual Report and its consolidated Annual Financial
Statements, and the Thungela Environmental, Social and Governance Report.
About this report
This report provides our stakeholders with an open and transparent
account of our approach to climate change and is aligned with the
recommendations of the Task Force on Climate-Related Financial
Disclosures (TCFD). It is intended for investors, customers, suppliers,
governments, non-governmental organisations and employees. The
Thungela Integrated Annual Report and the Thungela Environmental,
Social and Governance Report include additional information about
the Group’s management, operations, financial performance and
approach to sustainable development.
Report scope
In this document we incorporate our wholly-owned operations and the joint ventures where
we have management control. We also include information about operations where we do
not have management control but hold a significant interest. This includes Mafube Coal
Mining Proprietary Limited (Mafube Colliery), a 50% joint venture with Exxaro
Mpumalanga Coal Proprietary Limited. We have accounted for 50% of Mafube’s
greenhouse gas (GHG) emissions and energy consumption in line with the GHG Protocol,
and 100% for all other indicators. We exclude environmental, social and governance
(ESG) data from other activities in which we have a shareholding but do not have
operational control, such as the Richards Bay Coal Terminal, the Phola Coal Processing
Plant and Rietvlei Mining Company Proprietary Limited.
Directors’ responsibility
The Thungela Board of Directors acknowledges its
responsibility for this report and delegated its social
and ethics committee to oversee the integrity of its
compilation. The board has collectively reviewed this
report and confirms that it both addresses Thungela’s
material climate-related issues and provides a
balanced and appropriate representation of the
Group’s climate change performance. The board
approved this report on 21 April 2023.
Forward-looking statements
This document includes forward-looking statements.
For information regarding these, please refer to page 32.
THUNGELA CLIMATE CHANGE REPORT 2022
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
OUR SEVEN MINING OPERATIONS ARE AMONG THE HIGHEST QUALITY
THERMAL COAL MINES IN SOUTH AFRICA BY CALORIFIC VALUE.
OUR OPERATIONS
GREENSIDE
COLLIERY
Market:export and domestic
Coal Resources
● Measured: 8.8Mt
● Indicated: 4.5Mt
Coal Reserves
● Proved: 15.9Mt
● Probable: 0.9Mt
Mining method: underground
–bord and pillar
LOM:5 years
ZIBULO COLLIERY
Market: export and domestic
Coal Resources
● Measured: 221.6Mt
● Indicated: 107.4Mt
Coal Reserves
● Proved: 41.0Mt
● Probable: 21.2Mt
Mining method: underground –
bord and pillar, and opencast
LOM:10 years
MPUMALANGA
Johannesburg
Middelburg
eMalahleni
ISIBONELO COLLIERY
Market: domestic Coal Reserves
Coal Resources
● Proved: 12.6Mt
● Measured: 16.0Mt ● Probable: –
● Indicated: – Mining method: opencast
LOM:3 years
MAFUBE COLLIERY
1
Market: export
Coal Resources
● Measured: 15.9Mt
● Indicated: –
Coal Reserves
● Proved: 80.6Mt
● Probable: 40.8Mt
Mining method: opencast
LOM:21 years
1
Resources and Reserves are shown at 100%.
GOEDEHOOP
COLLIERY
Market: export and domestic
Coal Resources
● Measured: 225.5Mt
● Indicated: 6.0Mt
Coal Reserves
● Pr ov e d: 11. 7M t
● Probable: 0.4Mt
Mining method: underground –
bordand pillar
LOM:3 years
KHWEZELA COLLIERY
Market: export and domestic Coal Reserves
Coal Resources
● Proved: 29.2Mt
● Measured: 39.8Mt ● Probable: 2.1Mt
● Indicated: 9.5Mt Mining method: opencast
LOM:7 years
MPUMALANGA
PROVINCE
RIETVLEI COLLIERY
Market: domestic
Coal Resources
● Measured: 19.7Mt
● Indicated: 3.0Mt
Coal Reserves
● Proved: 10.0Mt
● Probable: –
Mining method: opencast
LOM:4 years
THUNGELA CLIMATE CHANGE REPORT 2022
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
OUR STRATEGY
Our four strategic pillars will enable us to deliver on our purpose to responsibly create value together for a shared future.
Drive Maximise Create Optimise
our ESG
aspirations
the full potential of
our existing assets
future diversification
options
capital
allocation
ESG is at the heart of our strategy that will inform our
approach to our existing business and any new projects
or initiatives as we consider “buy vs build” options.
A broader ESG perspective is required when
considering the
socio-economic implications as well as the timing and
pace of the transition to a low-carbon future.
Seeking to improve the competitive positioning and
cash generation of the assets we own and operate
today.
Developing a future pathway for our business by
pursuing geographic diversification of coal assets
where we can leverage our core skills.
We would also consider the divestment or winding
down of high-cost tonnes.
Implement “buy vs build” strategy using investment
evaluation criteria to ensure that projects compete with
additional shareholder returns in the form of additional
dividends and share buybacks.
OUR INVESTMENT EVALUATION CRITERIA
Our investment evaluation criteria have been designed to optimally balance responsible stewardship with the need to upgrade our portfolio and create shareholder value. They are
critical to all “buy vs build” decisions, ensuring that all investments compete with additional shareholder returns. We continue to evaluate all merger and acquisition opportunities
against these criteria.
Environmental Social Governance
● Consider the impact on global carbon output
● No net loss of biodiversity
● Support existing regional communities and
supplier base
● Improved transparency and accountability
Responsible stewardship
Cost/margin curve Payback Capital intensity
● Target lower half of global seaborne cost curve ● Target short payback period ● Competitive capex per tonne when compared
to alternative options
Upgrade our asset portfolio
Net present value
(NPV)/capex
Internal rate of return (IRR) Closure costs
● NPV
● Capital efficiency
● IRR higher than our nominal weighted average
cost of capital (WACC)
● Cash flows to fund closure cost provisions
beyond current LOM
Maximise shareholder value
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Strategic focus areas
We continue to make significant progress on the execution of our strategic focus areas.
Drive our ESG aspirations
Initiatives Outcomes
Focus on elimination of fatalities Zero fatalities in 2022
Reduce number of recordable injuries
Number of injuries flat year-on-year
Implement optimised rehabilitation and closure plans
Work to optimise these plans is on-going
Develop pathway to net-zero by 2050 plan and detailed climate change strategy – incorporating
GHG emission reduction initiatives
Scenario-based pathway to net zero developed
Develop carbon intensity reduction plans
Plans developed to reduce carbon intensity across operations
Set the scope 1 and 2 emissions reduction targets
Targets set for existing operations: 30% reduction by 2030
Construct passive water treatment demonstration plant
Demonstration plant commissioned in July 2022
Reduce freshwater abstraction
Volume of freshwater abstracted reduced
Continue to create shared value
R896 million total contribution to the trusts based on 2022 performance
Maximise the full potential of our existing assets
Initiatives Outcomes
Deliver productivity improvements
Progress curtailed by rail constraints
Enable an optimised cost structure
Cost containment initiatives ongoing
Optimise use of rail and port infrastructure to enhance marketing optionality
● Concluded rail agreement with a third-party to secure additional trains
● Leased two additional third-party sidings
● Trucking between sidings to maximise ability to rail
● Completed alternate port sales
Accelerate farm-fence opportunities with a short pay-back period
Multiple farm-fence opportunities with short pay-back periods identified and reviewed
Develop and deliver production replacement and life extension projects with near term goals
● Elders production replacement project approved by the board in 2022 and construction had commenced
● Zibulo North shaft life extension project to be presented for board consideration in 2023
Create future diversification options
Initiatives Outcomes
Consider divestment of stranded resources and/or high-cost tonnes
Initiated divestment of remnant resource blocks at Umlalazi
Evaluate geographic diversification of thermal coal asset base
● Several opportunities evaluated
● Executed geographic diversification through announcement of acquisition of Ensham Business in early 2023
Diversification where we have demonstrated our ”right to win”
Ongoing evaluation of various options where we have demonstrated our ”right to win”
Optimise capital allocation
Initiatives Outcomes
Maintain liquidity buffer throughout cycle Liquidity buffer enhanced in line with changing business context
Evaluate internal projects and acquisition options which could deliver superior returns over time
● Several merger and acquisition opportunities evaluated during 2022
● Ensham Coal Mine integration plan, pending completion of the acquisition in 2023
Seek shareholder approval for a potential share buyback programme Buyback programme was tabled at 2022 AGM, but failed to pass
THUNGELA CLIMATE CHANGE REPORT 2022
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Given the global uncertainty and volatility that we have seen in
the past year, it is clear that coal will play a role in ensuring
energy security in the short to medium term. Companies such as
Thungela, driven by its purpose: to responsibly create value
together for a shared future, will remain a preferred producer of
the high-quality coal that our markets require.
That being said, we also have an obligation to play our role
when it comes to climate change action and the transition to a
low-carbon world. Last year, we announced our ambition to
achieve a net zero target by 2050 in support of the goals of the
Paris Agreement. We also committed to declaring a near-term
target on this pathway. This has been set at a 30% reduction in
our scope 1 and 2 emissions by 2030, from a 2021 baseline.
Following a full review of our current and projected emissions
andabatement opportunities, we have taken a scenario-based
approach. This allows us the flexibility to change course while
advancing toward our net zero target, depending on the way the
world evolves and the strategic business decisions we make in
the future.
I am encouraged by the holistic approach that Thungela takes
when it comes to ESG matters. There is a balance to be achieved
between the need for a transition to a low-carbon economy,
economic development and energy security in the regions we
operate and the markets we serve.
We welcome the interest we have received from our
shareholders, customers, suppliers, host communities and
employees in our contribution toward mitigating climate change,
and have had a number of constructive engagements with large
institutional investors. Furthermore, we welcome these
engagements and believe that they are crucial to the creation of
value in the long-term.
Sango Ntsaluba
Chairman
26 April 2023
SANGO NTSALUBA
The board recognises the critical importance of addressing
climate change and takes ultimate responsibility for ensuring
that Thungela’s risks and opportunities are appropriately
identified, mitigated and managed effectively.
CHAIRMAN’S
STATEMENT
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
We need all sources of energy, used in
the most responsible manner to deliver
an energy system that is affordable,
reliable and sustainable.
It is more than a year since the tragic outbreak of the Russia-Ukraine war
that sent the world into an energy crisis, the likes of which has never been
seen. The ensuing gas supply shortages, coupled with supply chain
constraints, energy price surges, drought and the failure of renewables to
deliver anticipated energy supplies, were some of the factors that led to
coal demand reaching record highs in 2022.
The events of the last year have highlighted that the need for all three
aspects of the energy trilemma: affordability, reliability, and sustainability,
has never been stronger. They also shown that a disorderly energy
transition is not sustainable, and that a concerted drive towards an
orderly, responsible transition is needed.
As a coal producer, we are acutely aware that climate change action
has never been as critical as it is today and that we have an important
role to play in the transition to a low-carbon economy.
Coal will be relied upon, at least for the next two decades, to deliver
sustainable and lower-cost energy security, particularly in countries
where fuel choices are limited. The world continues to employ fossil
fuel-based electricity generation plants at enormous scale. While in some
countries these are declining, in others, coal and gas-fired power plants
remain a central part of electricity systems. More than half of the two
terawatts of global coal capacity has been built in the last 20 years,
primarily in China, India and, increasingly in Southeast Asia. This
indicates that there is an increasingly urgent need to address power
sector emissions in areas where the early retirement of relatively young
coal and gas plants is unlikely.
JULY NDLOVU
To address energy resilience, affordability and emissions – as well as the
damaging implications of coal’s demise to the communities and industries
that rely on it for survival – there is really only one viable alternative:
abated coal.
Technology is available today to abate up to 99% of coal emissions.
These include high-efficiency, low-emissions coal-fired power plants,
coal-to-hydrogen, and carbon capture, use and storage. Technologies
which limit the emission of particulates, sulphur dioxide, nitrogen oxides
and trace elements are already deployed at scale. What these
technologies need to reach the required levels of deployment to truly
create a low-carbon future is equitable funding as enshrined in Article
10.2 of the Paris Agreement.
This is not a coal versus renewables debate. We need all sources of
energy, used in the most responsible manner, to deliver an energy system
that is affordable, reliable and sustainable.
Last year, we committed to net zero by 2050, subject to the requirements
of the countries we operate in and the markets we serve. We also made
a pledge to announce our near-term emission reduction target and
publish a report aligned with the recommendations of the TCFD.
In March we announced that we will reduce our scope 1 and 2
emissions by 30% by 2030 (relative to our 2021emissions baseline) in
line with our path to net zero by 2050.
CHIEF EXECUTIVE
OFFICER’S
STATEMENT
This reduction will be achieved through the introduction of a renewable
energy strategy, the closure of mines as they come to the end of their
lives, and continued focus on energy efficiency at our operations to
reduce our energy and carbon intensity.
This, our inaugural Climate Change Report, provides an overview of our
governance of climate change matters, the risks that climate change
poses to our business and how we are mitigating these, our scenario-
based approach to our path to net zero, and our performance on
climate-related metrics over the last year.
As our business evolves, we will continue to develop and update our
climate change strategy to ensure that our commitment to net zero by
2050 is considered in all our decisions.
July Ndlovu
Chief executive officer
26 April 2023
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
OUR YEAR AT A GLANCE
Scope 3 emissions
(kt CO
2
e)
35,947
2021: 54,744
Scope 1 emissions
(kt CO
2
e)
308
2021: 362
Scope 2 emissions
(kt CO
2
e)
440
2021: 457
Total GHG emissions
(ktCO
2
e*)
Carbon intensity (kgCO
2
/
TTM**)
4.18
2021: 4.56
748
2021: 819
Total energy consumed
(million GJ***)
Energy intensity
(MJ/TTM)
3.01
2021: 3.42
16.81
2021: 19.04
* kt CO
2
e: kilotonnes carbon
dioxide equivalent.
** TTM: total tonnes moved.
*** GJ: gigajoule.
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Disclosures
Compliance, controls and assurance
Climate change risks and opportunities
CEO
Audit committee
Remuneration and
nomination committee
Social and ethics
committee
Risk sustainability
committee
Kholeka Mzondeki (Chairman)
Ben Kodisang
Thero Setiloane
Ben Kodisang (Chairman)
Seamus French
Kholeka Mzondeki
Sango Ntsaluba
Thero Setiloane (Chairman)
Seamus French
Lesego Mataboge
July Ndlovu
Sango Ntsaluba
Yoza Jekwa
Sango Ntsaluba (Chairman)
Seamus French
Ben Kodisang
Kholeka Mzondeki
July Ndlovu
Thero Setiloane
Required to report annually
andoversees the Group’s
accounting and financial
reporting,external audit,
integratedreporting and
combinedassurance.
Responsible for the process of
nominating, electing and
appointing board members,
board succession planning,
board performance evaluation
process, and the remuneration
policy in terms of the board and
prescribed officers.
Responsible for overseeing and
reporting on ESG matters to the
extent that it is not covered in
the risk and sustainability
committee, ethics, stakeholder
relations and responsible
corporate citizenship and
overseeing people, diversity
and regulatory compliance
and transformation.
Overall oversight of Group risk,
information technology, and
sustainability, with focus on
safety, health and the
environment and decides on the
Group’s risk appetite.
Group executive committee
Management committees
Functional heads
Subsidiaries (wholly-owned)
Joint ventures
Board of directors
Board committees
Shareholders
GOVERNANCE
At Thungela, we ensure that risk, sustainable
development considerations – including
climate change – and performance are
effectively integrated and appropriately
managed within our strategy and
management practices through our board
and leadershipstructure.
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
April
2023
April
2023
March
2023
March
2023
November
2022
November
2022
May
2022
May
2022
June
2022
June
2022
Governance and management systems
The board bears ultimate responsibility for the Group’s ESG strategy,
initiatives, progress and reporting. It also assesses our exposure to
material environmental and social risks and evaluates our
management of these. This includes ensuring that appropriate and
effective risk management and internal control systems are in place.
The board’s risk and sustainability committee and social and ethics
committee have been delegated overall oversight of sustainability,
with focus on safety, health, social and environmental matters, and the
risk and sustainability committee has a specific mandate on climate
change management. The committee’s work plan is informed by the
risks and opportunities we face, including climate change and the
decarbonisation of our operations. Matters relating to climate change
• Appropriate focus on organisational structures, processes, risks
and opportunities
• A clear and concise understanding of the organisation’s
ESGgoals and objectives.
• Procedures for assessing and managing sustainability-related
risks and opportunities.
• Measures for tracking and reporting on our sustainability
performance.
• Training and raising awareness among employees on
sustainability issues.
• The use of standards and best practices to guide our
sustainability efforts.
Key elements of our approach include:
Board
discussions on
climate change
• Approved the inclusion of our commitment to net
zero subject to the requirements of the countries
we operate in and the markets we serve, in the
company’s strategic pillar: ‘Driving our ESG
Aspirations’.
• Approved internal carbon and energy intensity
targets and project plans.
• Approved the Elders project subject to the use of
renewable energy for a proportion of its electricity
requirements.
• Progress against carbon and energy intensity
targets and energy efficiency project
implementation.
• Board strategy session informed by a third-
party presentation on macroeconomic factors,
including the war in Ukraine, the energy crisis,
and the global transition to a low-carbon future.
• Progress against carbon and energy intensity
targets and energy efficiency project
implementation.
• Update on energy efficiency bottom-up
opportunity scoping project.
• Progress on climate change risk assessment process.
• Progress against carbon and energy intensity targets
and energy efficiency project implementation.
• 2022 performance against carbon and energy
intensity targets.
• Review of our net zero pathway.
• Update on climate risks and TCFD reporting
process.
• Special audit/social and ethics committee
sitting on our approach to the compilation
of the 2022 Environmental Social and
Governance Report and Climate Change
Report.
are included in quarterly reports to the committee and, where necessary,
as stand-alone items on the agenda. The chairman provides a summary
of the committee’s discussions to the board, which addresses the most
material issues raised.
Please refer to page 126 of the Integrated Annual
Report for the risk and sustainability committee’s report.
Sustainability governance encompasses not only being an effective
board for the present, but continuously upskilling, training and
interrogating new ideas and concepts and incorporating ESG into
strategic decision-making.
Our ESG governance approach ensures that particular focus is given to
organisational structures, processes, related risks and opportunities.
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Management structure
Our chief executive officer (CEO), July
Ndlovu, is responsible for providing direction
and leadership and has oversight of the
implementation of our ESG strategy and the
path to net zero.
TheGroup executive committee is responsible
for managing climate-related risks and
opportunities, delivering on our strategic
objectives, and providing progress reports to
the relevant board committees. Reports
encompass measures to control these risks, the
implementation of opportunities, and proposed
public disclosures.
Site general managers are delegated the
responsibility for managing day-to-day ESG
performance, mitigating or avoiding possible
impacts from our activities, and implementing
projects to reduce our carbon emissions.
Frontline management teams report to the
executive committee in monthly and quarterly
performance reviews, as well as in a monthly
safety, health and environment (SHE) steering
committee which is also attended by internal
subject matter experts. SHE steering committee
meetings focus on deep dives into ESG topics,
the governance of ESG, and operational
feedback on actions relating to these.
The CEO’s performance scorecard and report
to the board includes performance indicators
on energy and GHG emissions. The board
holds regular strategic discussions on
Thungela’s future. These discussions are
prefaced with long-term strategic context and
megatrends, including the impact of climate
change and the global transition to a
low-carbon future.
For more details on governance,
including the board and committee
reports, please see the Governance
section of our Integrated Annual
Report from page 88 to 97.
Executive remuneration
We are committed to delivering on our key priorities, which is
reflected in the incentive structures applied at executive level.
We hold our executive team accountable for aligning our
business practices with our climate change ambitions. A total of
30% of the value of their long-term incentive plan (LTIP)
awards agreed by the remuneration and nomination committee
for 2023 is linked to ESG metrics, 10% of which relates directly
to the reduction of operational GHG emissions.
In addition, the bonus scheme outcomes for all employees is
tied to the organisation’s performance, which includes reducing
energy intensity. This is factored into our annual short-term
incentive (STI) scheme.
Assurance
IBIS ESG Consulting Africa Proprietary Limited (IBIS) was
commissioned to conduct an independent third-party assurance
process on the information in our Environmental, Social and
Governance Report for the financial year that ended
31December 2022. Some of this data has been reproduced
inthis report.
IBIS issued an unqualified opinion that the subject matter,
including total scope 1 and 2 emissions (measured in kt CO
2
e)
and total energy consumption (measured in GJ), in the scope for
high assurance was supported by the evidence obtained.
Disclosure and investor engagement
We are pleased to release this, our inaugural Climate Change
Report which is aligned with the recommendations of the TCFD.
A TCFD-linked index is provided on page 30.
We believe that the move to make TCFD disclosure mandatory in the
United Kingdom and in other jurisdictions will bring greater quality
and comparability to such disclosure.
We recognise investors’ evolving interests and expectations on our
views on climate change and have had a number of engagements
with large institutional holders on matters relating to ESG over the
past year. We welcome these constructive engagements and believe
that they are crucial to the creation of value in the long-term.
The full assurance statement can be found on page 117
of our Environmental Social and Governance Report.
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Integrated risk management
At Thungela, risk assessment entails a dynamic and
iterative process of identifying and evaluating risks.
This includes assessing the likelihood and
consequences of an adverse event on our objectives,
relative to the specified risk tolerances.
Our comprehensive risk management process, know
as ‘integrated risk management’ (IRM), ensures that
risks are identified and effectively managed, and that
risk information flows throughout the organisation. A
key output of IRM is an integrated risk and control
register for each operation and entity. These
contribute to the development of a single executive
risk summary report for the business, with the
principal risks being identified and assessed against
risk appetite. A ‘bottom-up’ and ‘top-down’ review
of all risk and control registers is undertaken to ensure
that risks are properly considered throughout all
levels of the organisation.
Risk management is a key duty of the board and
executive committee. The IRM process, which is aligned
with the International Standards Organization’s ISO
31000, is also approved by the board. The risk and
sustainability and audit committees are responsible for
monitoring and evaluating both the process and lines of defence to
make sure that risk is recognised, managed, mitigated, and reported in a
timely and appropriate manner. Effective risk management provides sustainable
value creation and predictable operational performance and is integral to
excellent management practice.
RISK MANAGEMENT
We recognise the reality of climate change. We also
understand the trade-off between coal’s adverse
environmental impacts, the need to support
development in communities that rely on
coal for their livelihoods, and the demand
for affordable, reliable power in our
export markets.
Our business is exposed to a range of risks from
both internal and external sources. Risk
management is integrated across the organisation
and embedded in critical business processes to
ensure it supports day-to-day activities and
executive decision-making at a corporate and
operational level.
By understanding, prioritising and managing risk,
we safeguard our people, assets, legal position,
values, reputation and the environment. We also
identify related opportunities to best serve the
long-term interests of all our stakeholders.
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Assessing our climate change risks
In 2022, a third-party assisted with identifying climate-
related risks and opportunities using a quantitative risk
assessment process that involved assessing:
• Physical risks relating to relevant acute and chronic
physical climate impacts
• Transition risks and opportunities relating to a lower-
carbon global economy, including changes to policy and
legal obligations, technological innovation, changing
market demand and stakeholder expectations
The risk identification process included the review of our
executive and operational risk registers and mapping of
related risks to potential physical and transitional climate risks
under three climate scenarios. Extensive engagement with
internal subject matter experts and operational management
teams was undertaken to validate the risks identified.
The approach was designed to deliver robust, structured
analysis which builds the foundation for enhanced climate
disclosure and embedding climate risks in the business, in
accordance with the TCFDs objectives. Going forward,
climate-related risks will be fully integrated into our risk
management process.
Financial analysis
The potential financial impact of climate-related physical and
transition risks on Thungela was evaluated under various
climate scenarios over the near (2030) and long (2050)
term. A financial assessment gives us a better understanding
of the relevant climate change risks and their implications so
that appropriate mitigation actions and response strategies
can be developed. The assessment will be used to guide
internal decisions in relation to climate-related impacts.
Risk assessment process
COMMUNICATION AND CONSULTATION
Establish the context
MONITORING AND REVIEW
Group/operation/project objectives, internal and external environment and dependencies
Risk identification
Identify the risks to pre-defined Group/operation/project objectives
Risk analysis
Identify root causes Identify contributing factors
Identify potential
consequences
Risk evaluation
Determine existing controls
Determine
likelihood
Determine
consequence
Calculate rating
Determine risk
appetite status
Risk treatment
Actions required to reduce the risk rating to an acceptable level
Risk management approach
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APPENDICES
Climate change policy
inSouthAfrica
Effective public policy is essential for providing the right
framework of drivers and incentives to encourage
coordinated, efficient and equitable response measures
by all stakeholders. Thungela is committed to providing its
expertise to assist the South African government and other
stakeholders in developing such public policy and
regulation. We work with industry and regulatory
authorities to contribute to the development and
implementation of these.
Draft Climate Change Bill
In March 2022, Parliament tabled the draft Climate
Change Bill for public comment. Once enacted, the
Climate Change Act will support an effective climate
change response and enable a long-term just transition to
a more climate resilient, low-carbon economy. Thungela
supports a dedicated Climate Change Act that puts
forward a common vision and offers harmonisation of
policies in support of this goal.
Carbon budget and pollution prevention plan
Thungela has an approved carbon budget and pollution
prevention plan for the period 2021 to 2025. Our
pollution prevention plan progress report was approved
by the Department of Forestry, Fisheries and Environment
(DFFE) in 2022. The regulations governing these
instruments will fall under the Climate Change Act and will
be drafted during the course of 2023. We will continue to
engage with the DFFE on the development of these
regulations.
Carbon tax
The cost of carbon-related emissions has been considered and incorporated into
discounted cash flow models, based on enacted legislation and anticipated carbon prices
obtained from the latest internal forecasts benchmarked with external sources. In 2022,
we expensed a total of R4 million (2021: R3 million) in 2022 in relation to carbon tax.
The DFFE’s declaration of GHGs as priority air pollutants in 2017, was followed by the
promulgation of a regulatory framework for GHG emission reporting. This formed the
basis for the promulgation of the Carbon Tax Act on 1 June 2019, which introduces a
carbon tax on identified affected sectors based on their emissions. This penalises emitters
and incentivises taxpayers' transition towards a low-carbon trajectory with a progressive
increase in the carbon tax rate from 2023.
Phase 1 of the carbon tax was extended to December 2025, while several Phase 2
carbon tax proposals were announced by the Minister of Finance in the 2022 national
budget review. On 5 January 2023, the Taxation Laws Amendment Bill was gazetted and
includes amendments that seek to align South Africa's carbon tax rate with global carbon
prices.
Annual carbon tax rates until 2030 (R/tCO
2
e)
2023 2024 2025 2026 2027 2028 2029 2030
R159 R190 R236 R308 R347 R385 R424 R462
There is a lack of clarity on how the carbon tax and carbon budgets to be enacted under
the Climate Change Act will be aligned, and this poses a risk to our business.
A carbon fuel levy was introduced under the Customs and Excise Act, as part of the
current South African fuel levy regime. The fuel levy now includes a carbon levy, which
applies to stationary and non-stationary mobile emissions resulting from the use of liquid
fuels, mostly petrol and diesel. The levy, which came into effect on 5 June 2019, is 10c per
litre and 9c per litre (2022: 9c per litre and 8c per litre), respectively. In addition, a notice
published in the South African Government Gazette on 31 May 2019 provided that the
carbon fuel levy be excluded from the diesel refund regime.
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OUR STRATEGIC RESPONSE
TO CLIMATE CHANGE
Methodology
The third-party who assisted with identifying
climate-related risks also performed scenario
analysis using climate models to understand future
potential climatic changes and identify adaptation
requirements to build climate resilience. It also
provided insight into what the future demand for
our products may be to guide future decision-making.
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. In addition,
it determined high-level climate impacts and
vulnerabilities on our operations, employees,
communities and customers. The assessment covered
two time horizons to inform near-term (2030) and
long-term (2050) decision-making.
Scenario analysis
What is scenario analysis and why do we use it?
The events of the past three years have highlighted the market’s volatility in
the face of pandemic-related and geopolitical disruption. These events
have shown us that it is not the ability to foresee change and disruption that
is important, but to be agile and adaptive when they occur.
Scenarios are not forecasts or predictions and accurately foreseeing the
future is challenging, even in the short term. Scenario analysis, however,
helps us to identify key drivers of change, to inform decision-making, and
evaluate business resilience against a set of divergent, plausible futures. It
also highlights the potential risks and opportunities associated with these.
To meet our commitment to net zero by 2050, we have completed a full
review of emission reduction opportunities and aim to reduce our scope 1
and 2 emissions by 30% by 2030 (relative to our 2021 emissions
baseline).
Several operations are currently projected to close prior to 2030, namely
Isibonelo, Goedehoop, Greenside and Khwezela. The Elders project, a
production replacement project for Goedehoop Colliery, was approved
by the board in 2022 and will produce its first coal in late 2023. It is
expected to operate for 12 years. The Zibulo North Shaft project, a life
extension project for Zibulo’s current underground operations, will be
tabled for consideration by the board in 2023. This project will extend the
existing life of the mine from 2028 to beyond 2035.
In addition to our operations, centralised services include our dedicated
Highveld Hospital, the eMalahleni Water Reclamation Plant, a rail
loadout facility and central workshops.
In February 2023, we initiated our first move into a new geography with
the acquisition of a controlling shareholding in the Ensham Coal Mine in
Australia. We expect to finalise this transaction in mid-2023. Once the
transaction closes, we will update our baseline and include initiatives to
decarbonise the Ensham operations in our plans.
Our Lephalale coal-bed methane project is a significant gas resource in
the Limpopo province of South Africa. Thungela is currently evaluating its
development options and potential phasing in light of South Africa's
energy crisis. A feasibility study has been approved and associated
production right application is planned for mid-2023.
More details on our operations can be found on
pages 14 to 26 of our Integrated Annual Report.
Using a scenario-based approach aligned with the physical and transition
scenarios described on page 15, together with current business projections,
including life extension projects, we have determined the interventions
required to achieve our path to net zero.
A physical and transitional climate risk assessment
was performed across our operations, critical
transport infrastructure, and export destinations
based on the scenarios described on page 15.
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The scenarios
Three types of physical risk climate scenarios capturing low, moderate and high emission futures were used for the analysis, applying the Intergovernmental Panel on Climate Change’s (IPCC)
AR5 Representative Concentration Pathways (RCP) and AR6 Shared Socio-economic Pathways (SSP) reports. These scenarios align with those used for the transition risk analysis and formed
the basis for the development of our approach to net zero. These are predicated on the scenarios set out in the International Energy Agency’s (IEA) World Energy Outlook, 2022.
Physical scenario
RCP 8.5/SSP 5
~3.2
o
C — 5.4
o
C
RCP 4.5/SSP 2
~2.5
o
C — 2.7
o
C
RCP 2.6/SSP 1
~1.7
o
C — 1.8
o
C
–
Transition scenario
1
Stated Policies Scenario (STEPS) Announced Pledges Scenario (APS) Net Zero Scenario (NZE)
0
Key outcomes
Physical risks dominate
• Emissions are curbed based on existing
policies and announced national
commitments to reduce emissions, but fall
short of meeting the Paris Agreement
• Continued use of fossil fuels and energy-
intensive activities
• Effects of climate change require investments
in adaptation measures to protect assets,
infrastructure and communities
Insufficient decarbonisation
• Slow implementation of policies due to
political, institutional and societal barriers
• The transition to a low-carbon economy is
disorderly, uncoordinated and delayed
• Transition happens faster in certain
regions and slower in others, leading
to differences in regional policies and
implications on the cost of doing business
and global trade
Transition risks and opportunities dominate
• Globally coordinated effort to reduce
emissions to net zero around 2070
worldwide (2050 in advanced economies
such as Australia)
• Accelerated transition to renewables and
electrification, and aggressive regulations
limiting the extraction and use of fossil fuels
in all major economies
0
Risks and opportunities
•
Flood and extreme precipitation
• Extreme heat and wildfires
• Sea level rise
• Water stress
• Carbon pricing policies
• Energy policies
• Litigation risks
• Flood and extreme precipitation
• Extreme heat and wildfires
• Sea level rise
• Water stress
• Carbon pricing policies
• Regulatory risk
• Reputational risk and opportunity
• Flood and extreme precipitation
• Extreme heat and wildfires
• Sea level rise
• Water stress
0
Projected coal demand
•
Continued fossil fuel investments
• Slow decrease in demand for fossil fuels
• Slow increase in demand for renewable
energy
• Continued but reduced fossil fuel
investments
• Modest decrease in demand for fossil fuels
• Modest increase in demand for renewable
energy
• No oil, natural gas and coalfields developed
due to reduction in demand
• Falls in fossil fuel prices due to lower
demand
• Rapid switch to renewable energy
Thungela position Extended fossil fuel market Slow transition Accelerated decarbonisation
1 These transition scenarios are based on those set out in the IEA’s World Energy Outlook, 2022.
Accelerated decarbonisation
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IEA projections for global thermal coal demand
Regulatory decisions across the globe are likely to drive coal price and demand. The
IEA projections for global thermal coal demand
Regulatory decisions across the globe are likely to drive coal price and demand.
TheIEA World Energy Outlook’s 2022 scenarios describe what the future may hold
forcoal demand and electricity generation.
Global coal demand reached record levels in 2022 owing to the energy crisis. The
rate at which demand will decline in future years, depends on the stringency with
which countries pursue climate targets.
In the STEPS, global thermal coal demand is projected to fall by 12% from 2021 to
2030, driven by a near 50% decline in developed countries and a slight increase in
emerging economies in the same time frame. Between 2030 and 2050, demand is
expected to drop by 35% as older coal-fired power plants are retired.
In the APS, thermal coal demand is projected to fall by 22% between 2021 and 2030
and by 70% between 2030 and 2050. The most rapid declines are again expected in
advanced economies and more moderate reductions in developing regions,
predominantly in the Asia Pacific markets.
The most rapid decline is seen in the NZE where coal demand is expected to drop by
50% by 2030 and 91% by 2050. Some coal-fired power plants are retrofitted with
carbon capture, utilisation and storage (CCUS) or fire coal with low-emission fuels
such as bioenergy or ammonia. By 2050, unabated coal use drops by 99% and just
under 90% of remaining coal-fired power stations are equipped with CCUS.
0
1 000
2 000
3 000
4 000
5 000
Scope 1 and 2 emissions by source (kt CO
2
e)
2010 2 0 21 2030 2040 2050
STEPS
APS NZE
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Pathways to net zero
To meet our 2050 net zero target, four distinct pathways are available and are informed by the climate scenarios. Given uncertainty over the future, these pathways provide us
with a framework for decision-making based on triggers that may occur.
The route we take hinges on two critical inflection points: the security of the energy system in South Africa and the pace of decarbonisation globally.
The STEPS and APS both see coal demand declining more moderately than the net zero pathway and have been combined in our pathways as ‘slow transition’. The ‘accelerated
decarbonisation’ pathways are aligned with the NZE.
2023-2024
2025 2030 2040 2050
Elders 4 MW solar
Energy efficiency
improvement projects
Energy
security reduced
Energy
security stabilised
Carbon offset projects
15 MW renewable energy
solution ‘behind the meter’
Carbon offset projects
15 MW renewable
energy solution
Offset M&A or projects with
renewable energy
Partner with independent
power producers (IPPs), use
or invest in green energy
No further coal expansion
Evaluate commodity
diversification options
Partner with independent
power producers (IPPs), use
or invest in green energy
Implement feasible energy
storage solutions
Offset M&A or projects with
renewable energy tailored to
LOM and community needs
Wheel excess renewable
energy from closing
operations to other sites
Energy storage solutions to
offset remaining emissions
Wheel excess green energy to
local communities/industries
Bank/sell carbon credits
Solve remaining emissions
from water reclamation plant
Evaluate commodity
diversification options
Invest in energy storage
solutions
Accelerated
decarbonisation
Accelerated
decarbonisation
Need for energy
outweighs change
in legislation
A
Local need for energy
balanced with need to
decarbonise
B
High pressure,
change in
legislation
C
Reduced local
demand for
energy
D
Slow transition
Slow transition
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Reduction in scope 1 and 2 emissions of 30% by 2030
The first milestone on our journey to net zero will be to reduce our scope 1 and 2 emissions
by a minimum of 30% by 2030. This target will be achieved through the implementation of
a renewable energy strategy, the closure of operations as they come to the end of their
lives, and energy efficiency projects.
Renewable energy strategy
Central to our net zero pathway will be the incorporation of a minimum of 19 MW of
renewable electricity by 2030.
Of the 19 MW required, a 4 MW solar plant for the Elders project is currently in the
feasibility stages. The strategy for the remaining renewable requirement will be evaluated to
determine the most efficient and effective model for sourcing this before 2030.
Mine closures
Several operations are projected to close prior to 2030, namely Isibonelo, Goedehoop,
Greenside and Khwezela. This will result in a reduction in GHG emissions associated with
those operations. While rehabilitation activities will continue to take place after closure,
once those have been completed, the energy consumption of those operations will be
limited to that associated with ongoing maintenance and water treatment.
Energy efficiency opportunities
Thungela’s standard and related guideline on energy and carbon emissions’ management
sets out the requirements to drive energy and carbon savings across the business.
We have undertaken an extensive review of each operation’s energy and GHG profiles
and identified business improvement opportunities to enhance energy efficiency and
therefore energy intensity at each site. A focus is to reduce and optimise diesel and
electricity consumption by large energy users. Some of the opportunities that will be
prioritised in the short term include:
The pathways shown on page 17 give us the flexibility to adjust our
approach to achieving our net zero target as the world evolves.
Passive water treatment
Our eMalahleni Water Reclamation Plant (EWRP), commissioned in 2007, and expanded to a
capacity of 50 ML per day in 2015, uses reverse osmosis technology to treat mine impacted water to
potable quality and will continue to do so beyond 2050. The plant supplies potable water to
community members in the water-stressed eMalahleni Local Municipality. Reverse osmosis technology
is energy intensive and the remaining emissions on our path to net zero are the scope 2 emissions from
this plant.
We are partnering with government, academia and other mining companies in the region to trial and
demonstrate passive water treatment technologies which will be more sustainable and require fewer
inputs in the long term. We are working on several alternate options depending on the quality of the
water that requires treatment. These include a demonstration scale plant that uses bacteria to remove
sulphates, neutralise water and remove metals to create a fit-for-purpose end-product that can be
used in agriculture. We are also implementing phytoremediation and the irrigation of maize with
suitable mine water which has an added benefit of improving food security, and wetland restoration.
Mine closure projects and responsible social transition
Key to any mine closure plan is the social transition. The nature of mining, involving the stewardship of
finite resources, means that transitions are an integral part of our work, especially with respect to mine
closure. The sector has developed significant knowledge of how to best work through such transitions.
The Mpumalanga region, and particularly the Highveld coalfields, is especially at risk as the region is
heavily dependent on both coal mining and coal-fired power generation. Notwithstanding climate
change, the coalfields and power stations have finite lives and a strategic approach to the transition in
this area is needed. This transformation will involve actions and decisions by private companies,
government, communities and individuals. The process by which opportunities will be maximised and
risks mitigated will be complex and involve different stakeholders working closely together.
We aim to leave a positive legacy through the integration of mine closure planning with land
rehabilitation, the conservation of biodiversity and the use of non-operational land for the benefit of
communities and the environment. We take a holistic approach to mine closure by identifying the full
spectrum of LOM opportunities, risks and liabilities at the outset and planning with the end in mind.
We believe that there is an opportunity to leave a positive legacy through the repurposing of
rehabilitated land.
We are investigating a wide range of post-closure land use options, with a view to developing a
responsible mine closure strategy and maximising our climate change opportunities. Some of these
options include the leasing of land to independent power producers for renewable energy
installations, agro-industrial projects and carbon farming.
Shortening haul routes
Improving road conditions
Reducing idle time
Ventilation system optimisation
Ventilation on-demand
Shuttle car payload optimisation
Underground mines
Opencast mines
You can read more about our passive treatment projects in our
Environmental, Social and Governance Report on page 49.
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Our climate-related risks
The table below reflects our understanding of the
most significant climate-related risks relevant to
our business. We acknowledge that this list is not
exhaustive and will continue to enhance our
understanding and response to these risks.
Physical risks
Prioritised physical climate risks have been consolidated into chronic (increased average rainfall, dry days and sea level rise) and acute (storms and extreme weather events) risks, with flooding and landslides considered
secondary impacts of these risk categories. The likelihood of these risks is low for operations that will reach the end of their lives before 2030 and will be higher for operations that will be in operation post-2030.
Category Risk description Risk responses
Physical
(chronic)
Relative sea level rise could cause increased exposure
to coastal inundation and storm surge which may
cause delays to product transportation or damage to
port infrastructure.
• Richard Bay Coal Terminal has emergency preparedness and response systems as well as early warning systems in place.
• We maintain adequate stockpiles at the port and on our sites to mitigate risks.
Increased average rainfall may cause operational
disruptions due to flooding and inability to access
mine workings, and increase operational costs
associated with managing water.
• We have a water management strategy which considers potential climate change-related risks, based on the outcomes of the scenario
analysis undertaken in 2022.
• We review our water balances annually and proactively manage water on site. We also track and report site water withdrawals,
consumption, discharges and reuse/recycling, and water treatment in line with the International Council on Mining and Metals (ICMM)
and the Minerals Council of Australia Water Accounting Framework.
• Our sites will be undertaking rain readiness reviews and developing response plans in 2023.
• We undertake annual reviews and audits on our mineral residue facilities and dams.
Increase in the number of consecutive dry days may
place additional pressure on the already water-
stressed catchment.
• We actively reduce freshwater consumption at our operations and have targets for the reduction of freshwater abstraction.
• Water efficiency is maximised through the reuse and recycling of water in our coal processing plants using thickeners and filter presses.
• The EWRP has the capacity to treat 50 ML per day of mine impacted water and provides potable water to the local municipality.
Physical (acute)
Storms and extreme weather such as high winds and
severe lightening could cause damage to
infrastructure and equipment and operational
disruptions.
• Every site has an emergency response plan which is reviewed periodically, technical standards on managing underground inrush and
extreme rainfall trigger action response plans.
• We have extensive internal standards, systems and procedures to manage hazards on site, and will review these to ensure that they
include potential climate change-related risks.
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Category Risk description Risk responses
Policy and
regulation
changes
The introduction of new or more stringent carbon
pricing mechanisms, both in our host countries and in
key coal importing territories may increase the cost of
production, reducing margins and therefore reducing
the cost competitiveness of coal versus lower carbon
alternatives. Incentives or subsidies for competing low
emissions energy sources in destination markets may
also make coal a less competitive option.
• We actively monitor changes in domestic and global policy relevant to carbon emissions.
• We engage with policy makers, either directly or via our industry associations.
• We have committed to net zero, subject to the countries we operate in and the markets we serve.
• We have developed a scenario-based approach to our path to net zero, which includes the substitution of part of our electricity
requirements with renewable energy.
The Mpumalanga region is heavily dependent on
coal mining for employment, both directly and
indirectly. Increased carbon pricing and regulatory
mechanisms as described above may impact our
employees and communities through job losses and
reduced total procurement spend.
• We continuously train and upskill our workforce using programmes that are recognised across the mining industry.
• Our operations offer a range of mining and non-mining skills training programmes to unlock employment opportunities for young
local people who do not have the financial means to further their education. These offer qualifications in, among many others, the
operation of capital equipment, computer literacy, hospitality, and plumbing. Please refer to page 71 of the Environmental, Social and
Governance Report for more details.
• We plan for closure using our mine closure toolbox which also takes into account social transition.
• Employees and communities share in the value that we create through their participation in the Sisonke Employee Empowerment
Scheme and the Nkulo Community Partnership Trust. We have contributed R448 million to each of these trusts related to 2022
performance, bringing total contributions since our listing toR1.2billion. This will make a meaningful and lasting impact on the lives of
those most important to enabling value creation – our employees and host communities.
Market drivers
Emissions reduction targets in export jurisdictions
coupled with increased competitiveness of low-
emission power generation technologies resulting in a
structural decline in global demand for thermal coal,
which may in turn drive downward pressure on global
coal prices.
• Our strategy and investment evaluation criteria are designed to optimally balance responsible stewardship with the need to upgrade
our portfolio and create shareholder value.
Please refer to page 3 for our
investment evaluation criteria.
• Our ‘buy vs build’ strategy using investment evaluation criteria to ensure that projects compete with additional shareholder returns.
• We are positioning our portfolio on the lower half of the global seaborne cost curve to improve margins and reduce cash requirements
during periods of lower prices.
• A price-risk management steering committee is constituted specifically to monitor decisions and expenditure on swaps, financial
instruments, and fixed price transactions.
Legal
Increased litigation for damages caused by climate
change or to force greater climate action.
• We monitor legal developments in these areas and seek advice on these.
Availability of, and access to, financing and key
services such as insurance may reduce and the cost of
these services may increase if the number of parties
prepared to partner with the coal industry reduces
significantly.
• We have implemented a self-insurance structure which will see the Group gradually reduce its reliance on the traditional insurance
market. In 2022, we made an initial contribution of R1.2 billion to this structure.
• In February 2023, we secured R3.2 billion in committed facilities with two South African banks with whom we have had a long-
standing relationship. These facilities were arranged to further strengthen our balance sheet as we continue to migrate our capital
structure in a manner that would enhance returns to shareholders over time. In addition this seeks to provide sufficient liquidity to
complete our capital projects and to navigate uncertainty across a number of external factors.
Reputation
Changing stakeholder expectations and lack of
acceptance over the role of high-quality coal in
supporting the transition to a lower carbon future may
impact our industry’s reputation and delay the
environmental permit approval process.
• We are committed to transparent disclosure through alignment with the recommendations of the TCFD and engage with our key
stakeholders on climate change and broader ESG issues in a clear, meaningful and transparent manner.
• Through our membership of the World Coal Association (WCA) and the Coal Industry Advisory Board (CIAB) to the IEA, we advocate
for a technology agnostic approach to a low-carbon future, which includes coal-fired power emission abatement technologies such as
high-efficiency, low-emission power plants and CCUS.
Transition
risks
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Adaptive practices to respond to
potential climate-related disruptions
Adaptive practices to respond to
potential climate-related disruptions
Value creation
Developing value-creating opportunities through accessing new markets,
technological innovation and collaboration — to address the climate change-
related needs of the business and affected communities.
Market for high-quality coal
VC1VC1
Geographic diversification of portfolio of businesses to spread and
mitigate climate change risks
VC2VC2
Technological innovation and collaboration to take advantage of
emerging climate change opportunities
VC3VC3
Transition to renewable energy
VC4VC4
Circular economy opportunities
VC5VC5
Responsible mine closure
Value protection
Increasing resilience of the existing assets and improving systems
responses to enable effective execution and ensure business continuity.
VC6VC6
Adaptation of internal management structure and systems to
facilitate integrated management of climate change impacts
VP1VP1
Identification and quantification of physical risks and opportunities
at a regional and site level
VP2VP2
Monitoring and recording magnitude and frequency of the
climatic events
VP3VP3
Integrating climate change risks and opportunities into the
IRMprocesses
VP4VP4
Incorporating climate change risks and mitigations into business
decisions
VP5VP5
Safeguarding physical assets and infrastructure through robust
engineering design and construction standards
VP6VP6
Incorporating climate change event risks into emergency
preparedness
VP7VP7
Ensuring comprehensive water and energy management measures
VP8VP8
Engaging key stakeholders on climate change issues
VP9VP9
Climate change
response strategy
To further build on our resilience to the potential physical impacts of climate change, we have evaluated our existing responses and developed a
systems based approach to improving our adaptive capacity to respond to transitional and physical risks. This will increase the resilience of our asset
portfolio into the future.
The systemic responses below have been separated into value protection (VP) responses to mitigate climate risks, and value creation (VC) responses, to
ensure that we are able to maximise the opportunities associated with climate change.
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Value protection responses
We have a broad range of measures already in place to mitigate the risks of climate change. Part of the process that we undertook was to evaluate areas for improvement in our responses. These are listed
below.
VP1
Adaptation of internal management structure and systems to facilitate
integrated management of climate change impacts
We are undergoing an exercise to update existing processes and to ensure there is a fully
integrated approach in the business to climate change, across all functions. The process
includes assessing current Social and Labour Plans (SLPs), the impact on communities and
responsible mine closure.
VP2
Identification and quantification of physical risks and opportunities at regional
and site level
We have completed climate scenario modelling for our current operations and life extension
projects. The modelling identified the reported physical and transition risks to operations,
including the potential financial impact of these risks.
We identified existing mitigations and means to enhance these.
VP3
Monitoring and recording magnitude and frequency of the climatic events
Monitoring and recording data related to climatic events is critical to improving our
understanding of the frequency and impact of climatic events. We have the systems in
place to do this and will work on building a central repository for this data.
VP4
Incorporating climate change risks and opportunities in the IRM processes
We have a comprehensive IRM in place, which is driven both at site and corporate level. This
includes a consistent view on risks and opportunities, with appropriate environmental
management systems, standards and certifications in place. Our risk management system forms
a strong foundation, and we are currently integrating climate change into that system to ensure
a complete view of risks and opportunities are actively managed by the business.
VP5
Integrating climate change risks and mitigations into business decisions
We have a number of decision frameworks, which guide us towards our strategic
ambitions. While many of these do consider climate change, we are in the process of
ensuring that it is fully embedded or enhanced where necessary.
VP6
Safeguarding physical assets and infrastructure through robust engineering
design and construction standards
Our fixed assets and infrastructure are designed according to national design and construction
standards and in line with regulatory requirements. This is additionally enhanced through
Thungela’s internal standards, systems and procedures.
VP7
Incorporating climate change event risks into emergency preparedness
We have several emergency response strategies in place to protect our employees, host
communities, assets and infrastructure. These emergency response procedures are
comprehensive, however we will review these to ensure integration of extreme weather
events.
VP8
Ensuring comprehensive water and energy management measures
We currently have water and energy management initiatives in place, which includes driving
the optimisation of operation processes which leads to the reduction of water and energy usage
on site. This is supported by our investment model for new/alternative technology that optimises
the use of water and energy.
VP9
Engaging key stakeholders on climate change issues
We have a comprehensive stakeholder engagement plan driven by corporate affairs,
using several platforms to engage with key stakeholders. Climate change concerns will be
integrated into our existing process, where it is not already covered.
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OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Value creation
It is important that in addition to understanding and managing our climate-related risks, we identify and take advantage of climate-related opportunities for our business.
A compelling opportunity is our focus on producing high-quality export coal, which is increasingly preferred over lower grades as the improved energy efficiency and lower pollutant content is better
aligned with the shifting requirements of customers in our export markets. Our tier 1 assets operate in the lower half of the cost curve which, coupled with our commitment to the responsible production
of a high-quality product, contributes to the resilience of our business.
VC1
Market for high-quality coal
Our focus on producing high-quality export coal with improved energy efficiency and
lower pollutant content which is better suited to shifting customer needs.
VC2
Geographic diversification of portfolio of businesses to spread and
mitigateclimate change risks
Expanding into different geographical locations to spread and mitigate the physical
climate change risks through diversification, while expanding production and capacity.
VC3
Technological innovation and collaboration to take advantage
ofemergingclimate change opportunities
The technological innovation and collaboration we are undertaking, specifically passive
water treatment technologies and water management practices and coal processing
technologies, will ensure more sustainable and efficient mining into the future and beyond
the life of our operations.
VC4
Transition to renewable energy
Transition to renewable energy will allow for ensuring consistent power supply and limiting
business interruptions, while transitioning to a low-carbon economy.
VC5
Circular economy opportunities
We have a strong focus on waste reduction, and have set a target of a 50% reduction in
waste to landfill by 2030. Introducing circular economy principles, resulting in improving
resource efficiency can stabilise supply chains, reduce operating costs and improve
competitiveness.
By far our largest waste stream is the mineral waste from our coal processing plants. We
are actively re-mining three of our discard facilities currently, which has the dual benefit of
maximising the use of our coal resource, and reducing the environmental impacts and
liabilities associated with the discard facilities.
VC6
Responsible mine closure
With several of our operations approaching their end of life, there are opportunities
available through intentional planning and collaboration to repurpose rehabilitated areas
to create sustainable businesses, where this will not contravene our obligations for site
restoration, for the benefit of the communities surrounding our mines.
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RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Our targets
Our goal is to reduce our scope 1 and 2 emissions by 30% by 2030 and reach
net zero by 2050 from a 2021 baseline. We have adjusted our baseline from
the previous baseline of 2016, to a baseline of 2021, as the year that Thungela
listed as a standalone entity.
METRICS AND
TARGETS
Greenhouse gas emissions and
energy
Thungela’s GHG emissions have been calculated according to
the GHG Protocol Corporate Accounting and Reporting Standard
(www.ghgprotocol.org) and the IPCC 2006 Guidelines. We use
the operating control approach in reporting emissions and
include the following in our footprint: Greenside, Goedehoop,
Zibulo, Khwezela, Isibonelo, centralised services (Highveld
Hospital, central workshops and the EWRP and 50% of
Mafube’semissions.
Emissions were calculated using the GHG Corporate Value
Chain (Scope 3 Standard) and IPCC 2006 Guidelines and
emission factors. These emissions were evaluated for purchased
goods and services, fuel and energy-related activities,
upstream transportation and distribution, waste generated in
operations, downstream transportation and distribution, use of
sold products, and investments. Use of sold products accounts
for 98% of our total scope 3 emissions. These emissions will be
evaluated to improve our understanding of the emissions across
the value chain and our reporting of these.
Scope 3:
Emissions from electricity purchased from Eskom.
Scope 2:
Direct GHG emissions from fossil fuel (diesel and petrol)
combustion in mobile mining equipment, fugitive emissions from
underground mines and other process emissions (wastewater
treatment and water neutralisation).
Scope 1:
Ensham is included for illustrative purposes, but will be fully integrated into our
baseline, annual reporting and initiatives to reduce emissions from Ensham will be
included in our pathways upon closure of the transaction in the next reporting cycle.
2 0 21 2030 2040 2050
SA business
819
904
85
-30% -95%
AUS business
Thungela total scope 1 and 2 emissions (kt CO
2
e)
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INTRODUCTION
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OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Scope 1 and 2 emissions
Total scope 1 and 2 CO
2
e emissions in 2022 were 748 kt compared
with 819 kt in 2021
. This 8.7% reduction was driven by energy
efficiency improvement projects and a reduction in production volumes
due to Transnet Freight Rail (TFR) underperformance. Our carbon
intensity improved 8.3% from 4.56 kg CO
2
e per total tonne moved
(TTM) to 4.18 kg CO
2
e/TTM over the same period.
Scope 1 emissions in 2022 decreased by15% to 308 kt CO
2
e (2021:
362 kt CO
2
e), with a 19% decrease in GHG emissions from fossil fuel
combustion and a 13% decrease in fugitive methane emissions. Our
scope 2 emissions decreased by 4.2% to 440 kt CO
2
e (2021: 457 kt
CO
2
e).
Carbon emissions from electricity consumption are the biggest
contributor to our footprint (59%) followed by fugitive emissions (26%)
and carbon emissions from fossil fuel combustion (15%).
Our performance
35,947
Scope 3 GHG emissions (ktCO
2
e)
2021: 54,744
440
Scope 2 GHG
emissions (ktCO
2
e)
2021: 457
Electricity
Fossil fuel
combustion
Other process
emissions
Fugitives
457
440
137
112
219
192
5 4
Scope 1 and 2 emissions by source (kt CO
2
e)
2 0 21
2022
308
Scope 1 GHG
emissions (ktCO
2
e)
2021: 362
Scope 3 emissions
Scope 3 category
2022
emissions
(kt CO
2
e)
2021
emissions
(kt CO
2
e)
Category 1: Purchased goods and services
5
30
Category 3: Fuel-and energy-related activities
543
667
Category 4: Upstream transportation and distribution
1
163
—
Category 5: Waste generated in operations
5
6
Category 9: Downstream transportation and distribution
2
124
1,008
Category 11: Use of sold products
3
35,072
53,031
Category 15: Investments
4
35
—
Total
35,947
54,744
1
Upstream shipping and transportation refers to the trucking of stock between our operations to
manage our stockpiles due to TFR underperformance in 2022.
2
Historically, emissions from shipping to export markets were included, however since our product
is sold on a free on board basis, the shipping of product has been removed from our scope 3
calculations for 2022.
3
Category 11: Use of sold products – historically the United Kingdom Department for Environment,
Food and Rural Affairs (DEFRA) emission factor for use of sold product was used. The emission factor
has been updated to the IPCC 2006 factor.
4
In an effort to improve our scope 3 reporting in 2022, we have included emissions from our joint
ventures where we do not have a controlling share.
Our scope 3 emissions decreased 34% to 35,947 kt CO
2
e from 54,744 kt CO
2
e in 2021
due to the reduction in sales volumes (use of product sold) which account for 98% of our
scope 3 emissions.
Through our memberships of the WCA and the CIAB, we advocate for a technology
agnostic approach which includes the accelerated deployment of CCUS and high-
efficiency, low-emission coal-fired power stations.
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INTRODUCTION
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RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Incentivising action through executive remuneration
We hold our executive team accountable for aligning our
business practices with our climate change commitments and
ambitions. In total, 30% of the value of the LTIP awards agreed
by the remuneration and nomination committee for 2023 is linked
to ESG metrics and 10% of which is directly to the reduction of
operational GHG emissions.
In addition, the bonus scheme outcomes for all employees have a
variable remuneration tied to the organisation’s performance
relating to reducing our direct and indirect GHG emissions. This is
included in our STI, which is measured annually.
Capital deployment
Thungela’s path to net zero, based on the
existing portfolio, plus the Elders and Zibulo
North Shaft projects requires a minimum of
19MW of renewable energy to be
implemented by 2030. The Group has a
balanced and disciplined approach to capital
allocation and will be adequately funded to
execute the path to net zero strategy.
Energy
Thungela’s total energy consumption decreased 12.5% to 3.01
million GJ (2021: 3.42 million GJ). Our energy intensity improved
by 5.6% year-on-year to 16.81 MJ/TTM owing to our energy
efficiency projects (2021: 19.04).
This was primarily due to energy efficiency projects such as
advanced process control (APC) in our coal processing plants,
reduction in machine carry back, haul road distance optimisation
and condition and construction management, truck and shovel
cycle time variability management, the optimisation of ventilation
systems, and mine digitalisation.
APC, in particular, has generated significant energy efficiencies
and emission reductions since its implementation in 2019. In
2022, savings of 6,657 t CO
2
e were realised, bringing total
savings to 23,432 t CO
2
e over three years.
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INTRODUCTION
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OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
Water
Thungela operates in a water stressed area, and our highest
physical climate change risks are water related.
Our water policy and technical management standards facilitate
regulatory compliance and sustained reductions in our consumption
of all water resources, including municipal, groundwater and
alternative natural supplies.
They also promote efficiency (reuse and recycling) and improved
measures to prevent the contamination of ground and surface water
across the mining lifecycle.
Our 2023 water targets:
•
Reduce freshwater abstraction by 20% against a 2015 baseline
• Increase water recycling levels to 75%
• No level 3 or greater water incidents
• Water treatment 40%
The treatment target is based on reducing recharge, managing
stormwater and creating sufficient storage to ensure uncontrolled
discharges are mitigated by achieving a 40% treatment target.
Our performance
96
Water reuse/recycle (%)
2021: 95
57
Water treatment (%)
2021: 57%
Performance
Goedehoop and Isibonelo collieries and, to a lesser extent, Mafube Colliery, rely on fresh
water from external sources and are working towards a reduction target of 20% by 2023,
using 2015’s 1,015 ML as a baseline. The overall trend for 2022 indicates that the current
import of water has decreased by 11% to 767 ML from 865 ML in 2021. Freshwater
abstraction in 2022 was 24% lower than the 2015 baseline, thus exceeding the 2023 target.
Greenside, Khwezela and Zibulo Collieries source their water from the EWRP and are also
working to reduce their consumption by 20% by the end of 2023 from a baseline of
1,997ML in 2015. They have reduced their combined water-use from 1,730 ML in 2021,
and 1,553 ML in 2022. This represents a year-on-year reduction of 10% and a reduction
of22% from the 2015 baseline.
Progress against our 2023 water targets
Reduction in
water use*
Reuse/
recycle Treatment
Level 3 or
greater
incidents
Target 20% 75% 40% Zero
Actual 24% 96% 57% 2
* These targets were set using 2015 data as a baseline.
A target was set to increase water reuse and recycling levels to 75% each year by 2023. All
operations, apart from the Isibonelo Colliery – where the absence of a washing plant leaves
little opportunity for recycling – have exceeded this target by driving efficiencies across their
water cycles.
In an effort to improve reporting, a reconciliation of our reuse and recycling efficiency figures
was conducted for several operations. Worse than expected values were noted where filter
presses and thickeners at processing plants are in use. These technologies ensure that water
is recycled numerous times in the coal washing process. This, however, did not reflect in our
data. The calculation methodology in use was updated to disaggregate activities to sub-task
level to reflect reuse and recycling in thickeners and filter presses. The new efficiency
calculation falls within the confines of the Water Accounting Framework (WAF) which
stipulates recommended aggregation levels.
The updated methodology resulted in a water reuse and recycling rate of 96% in 2022, up
from 95% in 2021, based on the same calculations. Our 75% reuse and recycling target will
be considered and updated during the course of 2023.
Our treatment target of 40% aims to reduce the accumulation of rising mine water to prevent
its uncontrolled release into the environment. We have also taken steps to ensure that we
manage stormwater and have sufficient storage capacity to avoid such an occurrence. An
overall treatment rate of 57% was achieved in 2022, on par with the 57% we recorded the
previous year.
767
Freshwater abstracted (ML)
2021:865
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METRICS AND TARGETS
APPENDICES
Memberships and associations
Our climate change advocacy position
Thungela engages with policymakers and collaborates with industry associations to advocate our position on matters relating to managing climate change
and our business. We engage in public policy discussions, with a view to maintaining a balanced approach as 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 engage in support of the Paris Agreement, and advocate for the accelerated deployment of all 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, as well as the development of a conducive policy and regulatory environment
to encourage climate action within the confines of our national circumstances. In all our climate advocacy activities, we are committed to compliance,
transparency, and accountability.
Thungela is a member of the National Business Initiative, a
voluntary coalition of South African and multinational companies working
towards sustainable growth and development. We have held a co-chair
position on its advisory committee for environment and society for the last
two years. In this role, we have participated in thought leadership on
issues such as the just transition, businesses’ role in ensuring the transition
to a low-carbon economy, best practice in water management, and the
initiative’s Just Energy Transition Pathways project.
Thungela is a member of the Minerals Council of South Africa
(Minerals Council), a mining industry employers’ organisation that
promotes the interests of the South African mining industry and provides
strategic and advisory support. A key role of the organisation is to
facilitate interaction among mining employers to examine policy issues
and other matters of mutual concern. We are active participants in the
Minerals Council’s environmental policy meetings, and have made
contributions to its work on the carbon tax and implications for the mining
industry, waste and water management in a changing climate and their
implications for the sector. We have also participated, through the
Minerals Council, in a number of discussions with the National Treasury
on the carbon tax and have contributed to the development of sector
benchmarks during the development of the current carbon tax regime.
We are members of the Energy Intensive User Group (EIUG) which
is committed to working with government, power utilities, industry and
other stakeholders to ensure South Africa has an energy supply industry
that is financially viable, technically healthy and well-managed. The
EIUG recognises the impacts and implications of climate change on
energy supply and security.
Thungela is a member of the World Coal Association (WCA).
Theassociation represents industry leaders who are committed to
building a sustainable future for global coal. It plays an active role in
achieving worldwide economic and environmental aspirations for clean
coal usage, technology and innovation. WCA members seek to promote
collaboration, demonstrating that the key to a clean coal industry lies in
a balanced, agnostic global policy environment that is inclusive of all
fuels and technologies.
We are a member of the Coal Industry Advisory Board (CIAB). The
board is made up of a group of high-level executives from coal-related
industrial enterprises and was established by the IEA in July 1979, to
provide advice on a wide range of coal-related issues. Members are
drawn from 13 countries that account for just under 80% of world coal
production and consumption. Members represent major coal and
electricity producers, other-coal consuming industries, and coal-related
organisations. Most recently, the CIAB commissioned reports on “The
role of low-emission coal technologies in a net zero Asian future” and “A
pathway to reducing emissions from coal power in India”.
Thungela is a member of the Industry Task Team on Climate
Change (ITTCC), a non-profit organisation aimed at undertaking
technical, fact-based studies to ensure that South Africa’s policies on
climate change are based on the best information and best practice and
prescribe real, achievable ends. The ITTCC works with various
stakeholders such as government and business groups on critical matters
such as climate change, South Africa’s international climate change
obligations, supporting the low-carbon transition, carbon price merits,
collaboration and the just transition.
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OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
PERFORMANCE TABLES
GHG emissions (kt CO
2
e)
2022
2 0 21 2020 2019
Scope 1
308
362 369 398
Fossil fuels
112
137 15 5 145
Fugitive emissions
192
219 209 248
Process emissions (wastewater treatment and
water neutralisation)
4
5 5 4
Scope 2
440
457 514 5 51
Total scope 1 and 2 (kt CO
2
e)
748
819 883 948
Scope 3
1,2
35,947
54,744 64,680 68,457
Scope 1 and 2 GHG intensity (kt CO
2
/TTM)
4.18
4.56 4.60 4.77
Energy consumption
2022
2 0 21 2020 2019
Energy from electricity (million GJ)
1.50
1.57 1.78 1.91
Energy from fossil fuel use (million GJ)
1.51
1.85 2.09 1.95
Solar energy (million GJ)
0.1
0.38 0.36 0.96
Total energy used (million GJ)
3.01
3.42 3.87 3.86
Energy intensity (MJ/TTM)*
16.81
19.04 20.16 19. 4
Electricity consumption (MWh)
415,732
494,626 434,916 415,490
Diesel consumption (kl)
41,800
57,838 51,285 41, 815
* Intensities have been calculated on a TTM basis to account for rehabilitation.
Water
2022
2 0 21 2020 2019
Water withdrawals by source (1,000 m
3
)
Freshwater withdrawal
767
865 785 714
Potable water withdrawal from EWRP
1,553
1,730 1,935 2,160
Total withdrawal
34,472
28,444 25,861 30,926
Ground water
25,788
19,384 16,929 24,965
Surface water
6,413
6,050 5,537 3,031
Third-party water
2,271
3,067 3,432 2,965
Water treated (%)
1
57
57 58
Water efficiency (reuse/recycle) (%)
1,2
96
95 66
Water discharges (1,000 m
3
)
Total water discharged
1
19,869
21,835 20,347
Treated water discharged from EWRP
8,037
9,489 7,640 7,603
Total consumption
1
(1,000 m
3
)
12,567
11 , 9 9 4 13, 075
1
Owing to the change in water accounting and definitions, 2019 data is not available for some indicators.
2
Water efficiency value for 2021 has been restated due to a change in the calculation methodology described on page 27.
High assurance
Moderate assurance
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OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
TCFD INDEX
TCFD recommendation Reference
GOVERNANCE
Disclose the organisation’s governance on climate-related risks and opportunities
a) Describe the board’s oversight of climate-related risks and opportunities
CCR: 8 – 9
IAR: 97 – 101, 128 – 129
b) Describe management’s role in assessing and managing climate-related risks and opportunities
CCR: 8, 10
IAR:128 – 129
STRATEGY
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s business, strategy and financial planning where
such information is material
a) Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term CCR: 19 – 20
b) Describe the impact of climate-related risks and opportunities on the organisation’s business, strategy and financial planning CCR:19 – 20
c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including
a2°C or lower scenario
CCR:14 – 23
RISK MANAGEMENT
Disclose how the organisation identifies, assesses and manages climate-related risks
a) Describe the organisation’s processes for identifying and assessing climate-related risks CCR:11 – 12
b) Describe the organisation’s processes for managing climate-related risks CCR:11 – 12
c) Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s
overall risk management process
CCR:11 – 12
METRICS AND TARGETS
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information ismaterial
a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk
management process
CCR:25, 26, 27, 28
b) Disclose scope 1, scope 2 and, if appropriate, scope 3 GHG emission and the related risks CCR:25 – 26
c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against
targets
CCR:24, 27, 29
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OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
GLOSSARY
Term used Definition
AGM Annual general
APC Advanced process control
APS Announced pledges scenario
Capex Capital expenditure
CCUS Carbon capture, utilisation and storage
CEO
Chief executive officer
CIAB Coal Industry Advisory Board (to the International Energy Agency)
CO2 Carbon dioxide
CO2e Carbon dioxide equivalent
Decarbonisation Reducing the carbon emissions associated with electricity, industrial activities, and
transportation
DFFE Department of Forestry, Fisheries and the Environment
DEFRA United Kingdom Department for Environment, Food and Rural Affairs
EIUG Energy Intensive Users Group
ESG Environmental, social and governance
EWRP eMalahleni Water Reclamation Plant
Fugitive emissions Emissions that are not produced intentionally and are not physically controlled.
GHG Greenhouse gas
GJ Gigajoule
Group Thungela and its subsidiaries, joint arrangements and associates
IBIS IBIS ESG Consulting Africa (Pty) Ltd
ICMM International Council on Mining and Metals
IEA International Energy Agency
IPCC Intergovernmental Panel on Climate Change
IPP Independent power producer
IRM Integrated risk management
ISO International Organization for Standardization
KPI Key performance indicator
kt A measure representing 1,000 tonnes
LOM Life of mine
LTIP Long-term incentive plan
Term used Definition
Mafube Colliery Mafube Coal Mining Proprietary Limited
Minerals Council Minerals Council of South Africa
MJ Megajoule
ML Megalitre
MW Megawatt
M&A Mergers and acquisitions
Mt Million tonnes
Net zero Net zero emissions is reached when anthropogenic emissions of greenhouse gases to
the atmosphere are balanced by anthropogenic removals over a specified period
NPV Net present value
NZE Net zero scenario
ORM Operational risk management
Paris Agreement A legally binding international treaty on climate change that aims to limit global
warming to well below 2°C, preferably to 1.5°C, compared with pre-industrial levels
RCP IPCC AR5 Representative Concentration Pathway
RO Reverse osmosis
ROM Run of mine, representing the product extracted from mining operations before it is
processed into saleable product
SHE Safety, health and environment
SSP IPCC AR6 Shared Socio-economic pathway
STEPS Stated policies scenario
STI Short-term incentive
t Metric tonnes 1,000kg
TCFD Task Force on Climate-related Financial Disclosures
Thungela Thungela Resources Limited
TFR Transnet Freight Rail
TRCFR Total recordable case frequency rate
TTM Total tonnes moved
WAF Water accounting framework (for the mineral industry)
WCA World Coal Association
ZAR South African Rand
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES
THUNGELA RESOURCES LIMITED
25 Bath Avenue PO Box 1521
Rosebank Saxonwold
Johannesburg Johannesburg
219 6 2132
South Africa South Africa
Tel: +27 11 638 9300
This report is available at: www.thungela.com
ADDITIONAL INFORMATION
COMMENT OR QUERIES RELATED TO
THIS REPORT
Nikki Fisher
Email: nikki.fisher@thungela.com
INVESTOR RELATIONS
Ryan Africa
Email: ryan.africa@thungela.com
MEDIA CONTACT
Tarryn Genis
Email: tarryn.genis@thungela.com
FORWARD-LOOKING STATEMENTS AND THIRD-PARTY INFORMATION
This document includes forward-looking statements. All statements included in this document (other than statements of historical facts) are, or may be deemed to be, forward-looking statements, including, without
limitation, those regarding Thungela’s financial position, business, acquisition and divestment strategy, dividend policy, plans and objectives of management for future operations (including development plans and
objectives relating to Thungela’s products, production forecasts and resource and reserve positions). By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of Thungela, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-
looking statements. Thungela therefore cautions that forward-looking statements are not guarantees of future performance.
Any forward-looking statement made in this document or elsewhere is applicable only at the date on which such forward-looking statement is made. New factors that could cause Thungela’s business not to develop as
expected may emerge from time to time and it is not possible to predict all of them. Further, the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in
any forward-looking statement are not known. Thungela has no duty to, and does not intend to, update or revise the forward-looking statements contained in this document after the date of this document, except as
may be required by law. Any forward-looking statements included in this document have not been reviewed or reported on by the Group’s independent external auditor.
The information contained within this report is deemed by the Group to constitute inside information as stipulated under the market abuse regulation (EU) No. 596/2014 as amended by the market abuse (amendment)
(UK MAR) regulations 2019. Upon the publication of this report via the regulatory information service, this inside information is now considered to be in the public domain.
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INTRODUCTION
GOVERNANCE
RISK MANAGEMENT
OUR CLIMATE CHANGE STRATEGY
METRICS AND TARGETS
APPENDICES