CLIMATE CHANGE REPORT 2023
www.thungela.com
01
Introduction 1
Our South African operations 2
Our Australian operation 3
Our strategy 4
Chairman’s statement 6
Chief executive officer’s statement 7
Our year at a glance 9
02
Governance 10
03
Risk management 14
04
Our strategic response
to climate change
21
05
Metrics and targets 27
06
Appendices 33
Reporting criteria 33
Performance tables 36
TCFD Index 37
Glossary 38
Additional information 40
Contents
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 has
been informed by the International Sustainability
Standards Board’s (ISSB
®
) S2 Climate-Related
Disclosures. The report provides our stakeholders
with transparent disclosure of Thungela’s
comprehensive approach to manage and mitigate
the impacts of climate change. 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), 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, Pamish and Rietvlei
Mining Company Proprietary Limited, but
these are included in scope 3, category
15: investments. Ensham mine is excluded
from this year’s reporting, to allow for
assessment and alignment and integration
of key performance indicators, baselines,
reporting criteria, risks and governance.
This is aligned with the approach taken
across all ESG indicators.
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.
Annual Financial Statements 2023
Integrated Annual Report 2023
impact
DEMONSTRATING
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE REPORT 2023
Thungela’s 2023 reporting suite
This report forms part of our overall suite of reporting documents for the year ended 31December 2023,
and should be read in conjunction with the Thungela Integrated Annual Report, the Thungela Annual
Financial Statements and the Thungela Environment, Social and Governance Report.
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Mt – million tonnes
LOM – life of mine
Our South African operations
Our seven mining operations are among
the highest quality thermal coal mines in
South Africa by calorific value.
GREENSIDE COLLIERY
Market:export and domestic
Coal Resources
●
Measured: 8.5Mt
●
Indicated: 4.0Mt
Coal Reserves
●
Proved: 15.0Mt
●
Probable: 2.1Mt
Mining method:
underground – bord and pillar
LOM:5 years
ZIBULO COLLIERY
Market: export and
domestic
Coal Resources
●
Measured: 376.4Mt
●
Indicated: 55.5Mt
Coal Reserves
●
P r o v e d : 27.1M t
●
Probable: 24.3Mtt
Mining method:
underground – bord and
pillar and opencast
LOM:8 years
MPUMALANGA
Middelburg
eMalahleni
MAFUBE COLLIERY
1
Market: export
Coal Resources
●
Measured: 26.6Mt
●
Indicated: 1.4Mt
Coal Reserves
●
Proved: 82.6Mt
●
Probable: 32.1Mt
Mining method: opencast
LOM:20 years
1
Resources and Reserves are
shown at 100%.
GOEDEHOOP
COLLIERY
Market: export and
domestic
Coal Resources
●
Measured: 243.8Mt
●
Indicated: 5.8Mt
Coal Reserves
●
Proved: 6.4Mt
●
Probable: 0.2Mt
Mining method:
underground – bordand
pillar
LOM:2 years
RIETVLEI COLLIERY
Market: domestic
Coal Resources
●
Measured: 5.0Mt
●
Indicated: 0.8Mt
Coal Reserves
●
Proved: 20.9Mt
●
Probable: 2.5Mt
Mining method: opencast
LOM:8 years
MPUMALANGA
PROVINCE
Coal Reserves
●
Proved: 26.4Mt
●
Probable: 2.1Mt
Mining method: opencast
LOM:6 years
KHWEZELA COLLIERY
Market: export and domestic
Coal Resources
●
Measured: 39.5Mt
●
Indicated: 9.5Mt
Coal Reserves
●
Proved: 7.4Mt
●
Probable:
–
Mining method: opencast
LOM:2 years
ISIBONELO COLLIERY
Market: domestic
Coal Resources
●
Measured: 16.4Mt
●
Indicated: —
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●
QUEENSLAND
Rail line (339km)
Port of Gladstone
Brisbane
Bowen Basin
Our Australian operation
ENSHAM MINE
Market:export
Coal Resources
1
●
Measured: 66.4Mt
●
Indicated: 969.8Mt
Coal Reserves
1
●
Proved: 32.0Mt
●
Probable: 34.6Mt
Mining method:
underground
LOM:16 years
1
Reserves and Resources are shown
at 100%
Mt – million tonnes
LOM – life of mine
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Our five strategic pillars will enable us to deliver on our purpose to responsibly create value together for ashared future.
Safety Drive Maximise Create Optimise
our ESG
aspirations
the full potential of
our existing assets
future diversification
options
capital
allocation
Safety is our first value. We do not waiver in
our commitment in operating a business that is
free of fatalities and injuries.
ESG remains at the heart of our strategy and
informs our approach to our existing business,
how we plan future projects and how we
evaluate potential acquisitions.
We maintain a broad ESG perspective
recognising thesocio-economic implications
in and around our business while managing a
transition to a low-carbon future.
We are continuously improving the
competitive positioning and cash generation
of the assets we own and operate today –
through productivity initiatives and execution
of approved capital projects on time and
within budget.
We are developing a future pathway
for our business by pursuing geographic
diversification and leveraging our core skills.
We also consider and pursue the divestment
or winding down of high-cost tonnes or
stranded resources.
Ongoing implementation of an efficient
capital allocation strategy, based on our
approved investment evaluation criteria to
ensure that any ‘buy versus build’ options
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 versus build’ decisions, ensuring that 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 capital expenditure (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 life of mine (LOM)
Maximise shareholder value
Our strategy
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STRATEGIC FOCUS AREAS
We continue to make significant progress on the execution of our strategic focus areas.
Safety
Initiatives Outcomes
Relentless drive to operate a fatality free business
●
One fatality
Drive our ESG aspirations
Initiatives Outcomes
Implement optimised rehabilitation and closure plans
●
On-going optimisation of rehabilitation activities, planning and associated costs
Operate with a credible pathway to net-zero by 2050
●
30% reduction in scope 1 and 2 emissions by 2030 from a 2021 baseline. On-track to meet target, having
achieved 11% emission reduction by the end of 2023.
●
Delivering carbon intensity reduction initiatives across the business, including own-use solar photovoltaic
installations at Zibulo and Elders
●
Identifying emissions offsetting opportunities that support our strategy
Continue to create shared value
●
R312 million total contribution to employee and community trusts based on 2023 financial performance
Maximise the full potential of our existing assets
Initiatives Outcomes
Deliver productivity improvements
●
Several underground productivity initiatives successfully implemented
Enable an optimised cost structure
●
Cost containment initiatives implemented during 2023 with a focus on targeting cost reduction across the
business
Optimise use of rail and port infrastructure to enhance marketing optionality
●
Established the Ensham coal sales book
●
Enhanced train loading options through improved siding availability and use of third-party sidings
Develop and deliver production replacement and life extension projects
●
The Elders project in execution, on schedule and within budget
●
Zibulo North shaft life extension project approved by the board in early 2023 and development on schedule
Create future diversification options
Initiatives Outcomes
Divestment of stranded resources and high-cost tonnes
●
Progress on divestment of remnant resources and plant infrastructure at Umlalazi
Geographic diversification
●
Completion of the Ensham acquisition in September 2023
●
Ongoing evaluation of additional organic and inorganic opportunities in line with our investment evaluation criteria
Diversification where we have demonstrated our ‘right to win’
●
Ongoing evaluation of various options
Optimise capital allocation
Initiatives Outcomes
Maintain liquidity buffer throughout the commodity cycle
●
Liquidity buffer in line with business needs
Evaluate internal projects and acquisition options which deliver superior returns over time
●
Several acquisition opportunities were evaluated during 2023, with the successful completion of the Ensham
acquisition
Seek shareholder approval for a potential share buyback programme
●
Announcement of share buybacks up to R500 million
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Chairman’s statement
Last year, Thungela published its scenario-
based approach to net zero and its commitment
to achieve a 30% reduction in scope 1 and 2
emissions by 2030 from the 2021 baseline in its
inaugural Climate Change Report. The pathways to
net zero, informed by climate scenarios and energy
security in South Africa, provide a useful decision-
making framework for the board.
Given the importance of climate change action and
the commitment by Thungela to contributing to the
goals of the Paris Agreement (Article 2), the board
is responsible for overseeing Thungela’s climate
change strategy. Progress on the implementation of
the strategy is reported to the board on a quarterly
basis. These updates, together with six-monthly
updates on key climate-related publications such
asthe Intergovernmental Panel on Climate Change’s
2023 report and the World Energy Outlook
published by the International Energy Agency,
areconsidered when making strategic decisions.
We believe that the global response to climate change should pursue dual objectives: limiting
temperatures in line with the goals of the Paris Agreement, and supporting the United Nations
Sustainable Development Goals (UN SDGs), driving inclusive and sustainable economic
growth, and universal access to clean, affordable energy.
The integrated approach that Thungela takes when it comes to ESG matters is consistent with
this. There is a balance to be achieved between the need for a transition to a low-carbon
economy and the moral imperative we have to empower the communities where we operate
to enable the economic diversification required for their transition away from coal, the
lifeblood of the region.
While the world continues to use coal, it is crucial that the producers of this fossil fuel do so
responsibly. Thungela, driven by its purpose to responsibly create value together for a shared
future, is well positioned to remain a preferred producer of high-quality coal.
In 2023, I engaged with stakeholders on climate change issues. We welcome the interest
we have received and the constructive discussions that we have had with large institutional
investors. I believe that these engagements are critical to long-term value creation.
I am proud to be able to refer to Thungela as a responsible miner of coal and I am
encouraged by the progress we are making towards our climate commitments.
Sango Ntsaluba
Chairman
24 April 2024
I am proud to be able to refer to Thungela as a responsible miner of coal
and I am encouraged by the progress we are making towards our climate
commitments.
SANGO NTSALUBA
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Chief executive officer’s statement
We also believe that there is no silver bullet to achieving the goals
ofthe Paris Agreement and that coal still has a significant role to
play in the low carbon transition. We are supportive of the COP28
call for a “just, orderly and equitable” transition with accelerated
efforts towards the phase-down of unabated coal power.
Renewables alone will not solve our global energy challenges due
to its low average load factors and intermittent output. In addition
to the sheer volume of raw materials and critical minerals needed
to manufacture solar and wind capacity, currently, coal generates
over 60% of the electricity used for global solar photovoltaics (PV)
manufacturing. Coal also plays an essential role in supporting
renewable energy sources by ensuring grid stability and continuous
power supply, which is vital for preventing power outages
particularly given the intermittent nature of renewable energy.
The growth of solar PV in recent years has been impressive. It
accounted for 12% of global generation in 2022 and is set to rise
to 30% by 2030. This puts power system flexibility at the centre of
electricity security, with grids fast becoming a bottleneck to clean
energy transition. Urgent and large-scale investment in electricity
grids is required, with 80 million kilometres of grid infrastructure
needing to be replaced or added by 2040. Without this, the
prolonged use of fossil fuels will be required.
Global coal investment in 2023 surpassed 2022’s levels. In
most parts of the world, the majority of investment went towards
maintaining existing operations and brownfield developments, while
energy security concerns and power shortages in India and China
have led to the development of new mines and the expansion of
existing operations.
Electricity generation from coal also reached an all-time high in
2023, up 1% from the same period in 2022. While investment in
new coal-fired generation capacity has slowed in recent years, it
nonetheless continues in order to meet global power needs.
China, India and Japan sent a clear message at COP28 that abated
coal and a wide range of decarbonisation technologies will play a
vital role in powering their economies, underwriting energy security
and supporting emissions reduction. Established technologies such
as carbon capture, utilisation and storage (CCUS), ammonia,
and sustainable biomass have the potential to significantly reduce
CO
2
emissions from fossil fuels without compromising the security,
flexibility, and affordability of electricity supply.
This is not a coal versus renewables debate. Choosing one fuel over
the other is not feasible nor is it realistic. If we are to be successful in
our transition to clean energy, and deliver an energy system that is
affordable, reliable and sustainable, we need to use all fuels and all
technologies available to us.
We are acutely aware that action to address climate change has never been
as critical as it is today. The extreme weather events and record temperatures
of 2023 are testament to that.
JULY NDLOVU
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Unfortunately, 2023 saw the number of people without access to electricity
increase for the first time in decades to approximately 760 million people.
This increase was seen primarily in Africa where 80% of the population
lives without access to electricity. This further highlights the need for a
responsible energy transition, to minimise the impact on energy security
and the most vulnerable people in society.
Climate change is a material issue that can affect our business through
regulations to reduce emissions, carbon pricing mechanisms, extreme
weather events or chronic changes to the climate, access to capital
and permitting risks. Importantly, it can also affect our employees, host
communities and suppliers. The strategic, effective and appropriate
management of these risks is critical, both to our business and to the lives
of the people that depend on us.
with the implementation of the 4 MW renewable energy project at Zibulo
which is expected to be operating before the end of this year.
Being a responsible miner is core to our strategic ambition and our goal
is to leave a positive legacy for host communities long after the last tonne
of coal has been mined. These objectives are not only ethically sound,
but also strategically essential. The ability to leave a positive legacy is
dependent on our ability to maximise the value from our existing assets
and to invest in creating a competitive business in the future.
July Ndlovu
Chief executive officer
24 April 2024
This report, provides an overview of our approach to climate change
matters with regards to governance, risks and opportunities and our
responses to these, our scenario-based approach to our path to net
zero, and our performance over the last year. We are in the process
of aligning Ensham to our ESG reporting system and standards, and
ESG information relating to Ensham will be included in the next annual
reporting cycle.
We are committed to reducing 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. I am pleased with the progress we have made against
our commitments, with an 11% reduction in scope 1 and 2 emissions in
2023 from the baseline, energy and carbon intensity improvements that
reflect the dedication of our sites to energy efficiency improvements and
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SCOPE EMISSIONS
Scope 2 emissions
(kt CO
2
e)
433
2022: 440
Scope 3 emissions
(kt CO
2
e)
32,033
2022: 37,071
Scope 1 emissions
(kt CO
2
e)
295
2022: 308
Total scope 1 and 2
emissions (ktCO
2
e)
729
2022: 748
Carbon intensity (kg CO
2
e
per total tonne moved)
3.56
2022: 4.02
Energy intensity
(MJ per total
tonne moved)
15.33
2022: 16.16
Total energy consumed
(million GJ)
3.14
2022: 3.01
Our year
at a glance
GJ – gigajoule
Kt CO
2
e – kilotonne carbon dioxide equivalent
We achieved a
‘B’ rating by the
CDP in 2023
Key performance indicators
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Governance
High standards of corporate governance drive our commitment to ESG by
emphasising transparency, accountability and ethical decision-making.
Sustainability governance
Given the coal industry’s global context, it is imperative that we adopt both
a transparent and pioneering approach to ESG.
In addition to addressing present concerns, the board must actively seek
out and pursue innovative ideas that will sustain the future of the business,
while simultaneously ensuring that it leaves a positive legacy for post
mining landscapes.
The board retains accountability for our ESG strategy, initiatives, progress
and reporting. It is also tasked with evaluating our susceptibility, and
assessing our management of significant environmental and social
risks. It delegates responsibility for managing impacts on the economy,
environment and people to the chief executive officer (CEO) and his
executive committee.
ESG governance at Thungela encompasses:
• Setting clearly defined goals and objectives
• Emphasis on risk management and internal controls
• A thorough understanding of ESG structures, processes, risks and
opportunities
• Honest and transparent reporting of ESG performance
• The utilisation of best practice standards to elevate sustainability efforts
Please refer to page 130 of the Integrated Annual Report for the
health, safety, environment and risk committee’s report.
Sustainability governance encompasses not only being an effective board,
but also 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 and
how these contribute to driving our ESG aspirations.
This commitment extends to rigorous risk management, which is
essential if we are to be a responsible custodian of our natural
environment and a conscientious corporate citizen. Climate risk
management is one of three priority pillars under the ‘E’ of our ESG
approach. You can read more about our approach to ESG in the
Environmental, Social and Governance Report.
Our purpose aims to create value for all stakeholders, including
shareholders, suppliers, employees and the communities that host
our mining sites. This can only be achieved through sound corporate
governance, which ensures that we act in the best interests of every
stakeholder, disclose accurate and transparent details of all aspects
of our performance, and take accountability for our actions.
A more detailed account of corporate governance, including reports
from the board and its various committees, can be found in the
governance section of our Integrated Annual Report.
Our approach
Our approach to governance is informed by the principles outlined
in the King IV™ Report on Corporate Governance for South
Africa 2016 (King IV
1
), the performance standards established by
the International Finance Corporation, legislation and accepted
industrynorms.
The board takes ultimate responsibility for our business’s
performance in all areas, including ESG. This extends not just to
Thungela, but also to its subsidiary companies, associates, trusts
andjoint ventures.
Robust processes, policies and principles guide the board’s activities
and lay the foundation for a strong ethical culture. They ensure the
board’s adherence to statutory and industry requirements, providing
direction and setting limitations on its decision-making.
1
Copyright and trademarks are owned by the Institute of Directors of Southern Africa NPC and all of its rights are reserved.
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Board structure
In a governance restructure to optimise board
efficiency and effectiveness, we introduced a
new investment committee. The remuneration and
nomination committee was split into two separate
committees: the remuneration and human resources
committee and the nomination and governance
committee. The social and ethics committee is now
known as the social, ethics and transformation
committee, while the risk and sustainability committee
is referred to as the health, safety, environment and
risk committee.
AMONG THE
BOARD’S
ROLES AND
RESPONSIBILITIES
ARE:
Focus on environmental management and transparent
reporting on issues such as responsible water use, mine
closure, climate change, and driving the pathway to
net zero emissions
Emphasising the implementation of, and compliance
with, governance processes and procedures with a
zero tolerance for fraud and corruption
Ensuring the business operates safely
Ensuring adequate succession planning at senior
levels
Reviewing operational performance and
management
Reviewing policies and processes that ensure the
integrity of risk management and internal controls
• Has expanded duties
and required to report
on, and oversee, the
effectiveness and
integrity of the Group’s
accounting and
financial reporting,
external audit, internal
audit, integrated
reporting and
combined assurance
Audit
committee
• Oversees human
resource development,
talent management and
skills retention
• Reviews, for board and
shareholder approval,
the remuneration report
and considers all
remuneration-related
matters, including
salary increases and
incentive awards
Remuneration
and human
resources
committee
• Reviews and evaluates
all investments and
related financing,
divestments, corporate
restructuring and
financing proposals,
which exceed Group
executive committee
authority and require
board approval
• Monitors execution and
tracks performance post
implementation
Investment
committee
• Nominates, elects
and appoints board
members
• Responsible for board
succession planning,
board performance
evaluations, the review
and recommendation
of sound governance
principles and
monitoring of regulatory
compliance.
Nomination
and
governance
committee
• Oversees transformation,
employment equity and
compliance with the 10
United Nations Global
Compact (UNGC) Principles
• Manages B-BBEE, ethics
and responsible business
practices, stakeholder
relations and responsible
corporate citizenship
Social, ethics
and
transformation
committee
• Has overall oversight of
group risk, IM as well
as of sustainability with
a focus on safety, health
and environment
• Determines the Group’s
risk appetite and
reviews legal matters
Health,
safety,
environment,
and risk
committee
BOARD
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feedback on action items through in-depth
discussions on ESG topics.
More information on the board and its
committees can be found in our integrated
annual report. The biographies of all executive
and non-executive directors can be viewed on
our website at www.thungela.com/about-us/
who-we-are.
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 92.
Risk, sustainability and compliance
The social, ethics and transformation committee
and the HSE and risk committee are responsible
for ESG, with special emphasis on the social
and environmental aspects of our business.
The former’s primary purpose is to ensure that
we comply with the laws, codes and standards
that apply in the running of a principled and
socially responsible business, focusing on ethics,
stakeholder relationships, corporate citizenship,
inclusion and diversity, human rights and social
transition associated with mine closure and the
transition of the globe to a low carbon future.
The latter oversees the identification,
consideration and monitoring of HSE risks
and impacts, including those associated with
climate change, and ensures that the business
has implemented effective policies, plans and
practices for managing these.
Leadership
The board is led by independent non-
executive director Sango Ntsaluba. As
chairman, he is responsible for setting the
tone for an ethical culture at board level,
and for ensuring that the board fulfils its
duties with integrity and in accordance with
established corporate governance principles.
He is also the board’s link to the company
CEO, July Ndlovu, and his executive
committee. The CEO is responsible for
providing direction and leadership and has
oversight of the implementation of our ESG
strategy and the path to net zero.
The executive committee is tasked with
formulating our short, medium and long-
term objectives, generating satisfactory
levels of value creation and leading the
implementation and execution of approved
strategies, policies and our code of conduct.
It 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. Operational management teams
provides regular reports on health, safety
and environmental (HSE) matters to the
executive committee during monthly and
quarterly performance reviews. A monthly
SHE steering committee addresses specific
issues, governance matters, and operational
• 2022 performance against carbon and
energy intensity targets.
• Update on development of scenario-
based approach to the path to net zero.
• Update on climate risks and TCFD
reporting process.
March 2023
• Board strategy session informed by a third-
party presentation on macroeconomic
factors, including geopolitical instability,
the energy crisis, and the global transition
to a low carbon future.
June 2023
• Progress against carbon and energy
intensity targets and energy efficiency
project implementation.
• Update on Zibulo and Elders 4 MW solar
photovoltaic (PV) projects.
August 2023
• Intergovernmental Panel an Climate
Chance (IPCC) Climate Change 2023:
Synthesis Report and Climate Action Tracker
• International Energy Agency (IEA) World
Energy Outlook 2023.
• IEA 2023 special report: Credible
pathways to 1.5
o
C.
• Carbon capture and storage (CCS) in
South Africa.
• Progress against carbon and energy
intensity targets, energy efficiency and
renewable energy project implementation.
November 2023
• CCS progress update based on
Global Carbon Capture and Storage
Institute (GCCSI) Global Status of CCS
2023 Report and CCS projects under
development in China by China Energy and
China Huaneng Group.
• Full year 2023 performance update on
carbon and energy intensity targets and
projects to be implemented in 2024.
• Update on Zibulo and Elders 4 MW solar
PV projects
March 2024
• Special audit/social, ethics and
transformation committee sitting on our
approach to the compilation of the 2023
Environmental Social and Governance
Report and Climate Change Report.
April 2024
• Progress against carbon and energy
intensity targets and energy efficiency
project implementation.
May 2023
BOARD DISCUSSIONS ON
CLIMATE CHANGE
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Incentivising change
We are committed to delivering on
our key priorities, which is reflected in
the incentive structures. We hold our
executive team accountable for aligning
our business practices with our climate
change ambitions. A total of 10% of the
value of their long-term incentive plan (LTIP)
awards relates directly to the reduction
of operational GHG emissions and the
implementation of our renewable energy
commitment of 19 MW by the end of 2026.
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.
Transparency and disclosure
It is only through accurate and transparent
reporting that shareholders, potential
investors, lenders, business partners,
advocacy groups, communities and
many other stakeholders can make an
informed assessment of our business.
The board reviewed and approved our
interim and annual financial statements,
notice of annual general meeting (AGM)
and reporting suite, including the Group’s
Integrated Annual Report, Environmental
Social and Governance Report and
Climate Change Report.
In 2023, we were assessed by six global
rating agencies. Apart from improving our
scores across various metrics, we were
classed ‘very high’ for ‘transparency’ and
‘data availability’.
We also received a Brating from the CDP.
We are pleased to release our second
Climate Change Report which is aligned
with the recommendations of the TCFD,
with a TCFD-linked index on page 37 .
This report is also informed by the ISSB’s
S2 Climate-Related Disclosures. We will
work to aligning with the ISSB’s S1 and S2
disclosures in the next reporting cycle.
We recognise investors’ evolving interests
and expectations on our views on climate
change and have had a number of
engagements 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.
Assurance
IBIS ESG Consulting Africa Proprietary
Limited (IBIS) was commissioned to
conduct independent, third-party
assurance on the information in our
Environmental Social and Governance and
Climate Change Reports for the financial
year that ended 31December 2023.
The full assurance statement can be found
on page 135 of our Environmental
Social and Governance Report.
High assurance was performed on scope
1 and 2 and energy data and IBIS issued
an unqualified opinion and concluded that
the subject matters in scope were prepared
in accordance with the defined reporting
criteria and are free from material
misstatement.
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Risk management
Effective risk management is essential for the safe, sustainable
and responsible creation and protection of value.
Operational
and functional
risk
Project
risk
Integrated
executive risks
Figure out the
context
Understand the
hazards
Identify the
unwanted events
Analyse
the risks
What controls
could be
implemented?
Treat the risks
COMMUNICATE WITH YOUR TEAM
Check that the controls are working
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. The IRM
framework gives guidance on the
ownership, frequency and timing
of reassessments, documentation
output and facilitation and review
responsibility for various business
processes.
By understanding, prioritising and managing our risks, we
safeguard our people, assets, legal position, values, reputation
and the environment. We are also better able to identify related
opportunities that best serve the long-term interests of all our
stakeholders.
Our focus is on ensuring compliance with the JSE Limited’s
Listing Requirements and the King IV, with particular emphasis
on principle 11 which applies to integrated risk management
(IRM). This principle emphasises the importance of governing
risk in a manner that enables organisations to set and achieve
their strategicobjectives while demonstrating their commitment
tosustainable practices.
Our approach to risk management
Our IRM policy, framework and operational risk management (ORM) standard
govern the way we manage risk and are applicable to all operations, business
functions and projects. The IRM methodology is alignedwith the International
Organization for Standardization (ISO) 31000standard.
IRM is a formal process that exists to ensure that risks are methodically
identified, assessed and effectively managed and that risk-related information
flows throughout the organisation. Each operation or entity has a risk and
control register that informs the compilation of a single executive risk summary
report for the identification of principle risks that can be assessed against the
established risk appetite. This report is updated and presented to the board for
approval twice a year.
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Responsibility and accountability
A key duty of the board and executive management team is risk
management. The health, safety, environment and risk committee and
the audit committee, are responsible for monitoring and assisting in the
IRM process. They regularly evaluate the process and lines of defence
tomake sure that risk is recognised, managed, mitigated and reported
ina timely and appropriate manner.
Risk management is integrated across the organisation and is embedded
in critical processes to ensure that it supports both day-to-day activities
and executive decision-making at an operational and corporate level.
Assessing our climate change risks
A full assessment of our climate change risks was conducted in 2022
by a third-party. The quantitative risk assessment process included the
analysis of physical risks relating to relevant acute and chronic climate
impacts and transition risks or opportunities relating to the transition
to a lower-carbon global economy. The latter evaluated the impact
of 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
based on the Intergovernmental Panel on Climate Change’s (IPCC)
Assessment Report (AR) 5 Representation Concentration Pathways
(RCP) and AR6 Shared Socio-economic Pathways (SSP). 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 TCFD’s objectives.
To promote understanding and ensure that climate risks are fully
integrated into our business at every level, we carried out roadshows
focused on climate change and energy efficiency to all sites and
functional disciplines in 2023. The presentation series aimed to upskill
teams at the sites on what the potential physical risks might be and how
to mitigate or adapt to these as well as to raise awareness across the
business of our climate change commitments and pathway to net zero.
Importantly, workshops were held with our social performance teams on
the impacts of physical and transitional risks to our communities and how
we can contribute to addressing these.
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.
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Climate change policy in South Africa
South Africa has committed to net zero by 2050 and updated its
mitigation targets which represent a significant progression from the first
Nationally Determined Contribution (NDC). The country has committed
to a fixed target for greenhouse gas emissions levels of 398-510
Mt CO
2
e by 2025, and 350-420 Mt CO
2
e by 2030, compared to
398-614 Mt CO
2
e between 2025 and 2030 as communicated in the
firstNDC.
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
The Climate Change Bill (the Bill) was passed by the South African
National Assembly on 24 October 2023. As of 16 February 2024,
the Bill is with the National Council of Provinces Committee for review.
The Bill proposes to assign carbon budgets to companies to ensure the
country achieves it’s NDCs. The Bill also places a legal obligation on
every organ of state to coordinate policies and programmes to ensure
that climate change risks and vulnerabilities are acted upon.
Carbon budget and pollution prevention plan
Thungela has an approved carbon budget and pollution prevention
plan for the period 2021 to 2025. Our 2022 pollution prevention plan
progress report was approved by the Department of Forestry, Fisheries
and Environment (DFFE) in 2023. The carbon budget and mitigation plan
regulations will exist under the Climate Change Act. DFFE is expected
to release draft carbon budget and mitigation plan regulations in 2024.
Thungela continues to engage with the DFFE on the allocation of carbon
budgets to the coal sector.
A higher tax rate of R640 per tonne of CO
2
e on emissions exceeding
allocated budgets was announced in the 2022 Budget by National
Treasury. It has since been announced that this will come into effect on
1 January of the calendar year after the Bill is enacted and carbon budget
regulations become law. Once this is implemented, the 5% carbon budget
allowance will fall away. Government would like to increase the carbon
offset allowance by 5% once the carbon budget allowance falls away to
encourage further investment in green energy projects.
Carbon tax
Thungela has a carbon tax forecast model based on legislation and
anticipated carbon prices which is incorporated into discounted cash flow
models for projects. In 2023, we expensed R4 million (2022 : R4.1 million),
based on the carbon tax rate of R159/tCO
2
e.
Phase 1 of the carbon tax was extended to December 2025. In 2022,
National Treasury proposed the gradual reduction of the carbon tax
allowances for the second phase (January 2026 to 31 December 2030). In
the 2024 national budget review, the Minister of Finance announced that a
discussion paper on the second phase of the carbon tax will be published
for public comment later in the year.
On 5 January 2023, the 2022 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
The 2023 Taxation Laws Amendment Act, gazetted on 22 December 2023,
allows eligible taxpayers to claim the 5% carbon budget allowance until 31
December 2024 if they participate in the voluntary carbon budget system.
Effective from 1 January 2024, Schedule 1 of the Carbon Tax Act for fuel
combustion emission factors and calorific values will be updated to align
with DFFE Methodological Guidelines for Quantification of Greenhouse
Gas Emissions.
The carbon tax levy for the general fuel levy was 10c and 11c for petrol
and diesel respectively for the 2023/2024 period. The carbon tax levy will
increase to 11c for petrol and 14c for diesel effective from April 2024.
Climate change policy in Australia
The Australian government has committed to achieve net zero
emissions by 2050 and a 43% reduction in emissions by 2030, from
2005 levels. Each Australian state has set their own interim emission
targets, with Queensland committing to a 30% reduction by 2030.
The Australian Climate Change Bill was passed into law in September
2022. Several domestic programmes have been launched through
the Clean Energy Regulator, including Safeguard Mechanism, which
requires Australia’s largest greenhouse gas emitters (emitting more
than 100 kt CO
2
per annum) to keep their net emissions below
a legislated limit, known as a baseline. These emissions limits will
decline, predictably and gradually, on a trajectory consistent with
achieving Australia’s emission reduction targets of 43% below 2005
levels by 2030 and net zero by 2050. Only scope 1 emissions count
towards the facilities compliance.
A full review of the climate-related policy affecting the Ensham Mine
will be provided in the next climate change report.
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Our climate-related risks and
opportunities
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 we will continue to enhance our
understanding and response to these risks.
RISK DESCRIPTION OUR MITIGATION MEASURES
Physical (chronic)
SEA LEVEL RISE
The frequency of the current 1-in-100 year storm
surge event at Richards Bay is projected to become
more frequent across moderate (1-in-18 years) and
high (1-in-11years) emissions scenarios by 2050.
This may cause increased exposure to coastal
inundation and potential damage to port facilities
which may cause delays to product transportation or
damage to port infrastructure.
• Richards Bay Coal Terminal has emergency preparedness and response systems as well as meteorological monitoring and early warning systems in place
INCREASED AVERAGE RAINFALL
Total annual rainfall is projected to increase across
all scenarios by 2050. This may cause operational
disruptions due to flooding and inability to access
mine workings, and increase operational costs
associated with managing water.
The risks to communities of increased rainfall may
include discharge of mine-impacted water, increased
occurrence of sinkholes or subsidence, disruptions
to transportation due to road damage, which in turn
may undermine food security.
• Our water management strategy considers potential climate change-related risks.
• We review our water balances annually and proactively manage water on site. We 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.
• Higher than normal precipitation and extreme rainfall events have been experienced in the Mpumalanga region over the last three years. This has prompted
annual rainfall readiness reviews and the development of trigger action response plans.
• We monitor and track the magnitude and frequency of climatic events and we are working towards building a central repository for this data.
• We undertake annual reviews and audits on the integrity of our mineral residue facilities and dams.
• Areas that are at risk for subsidence or sinkholes are fenced off and declared ‘red areas’ and are inaccessible to communities and employees alike.
• Sites have incorporated physical risks and response plans into their baseline risk registers.
• We have developed an integrated emergency preparedness response plan that considers the potential effects of catastrophic events at sites, including those that
may be associated with climate change, on doorstep communities.
Physical risks
Prioritised physical climate risks have been consolidated into chronic (increased average rainfall 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.
The socio-economic context of host communities, discussed on page 89 of our Environmental Social and Governance Report increases their vulnerability to climate risks.
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RISK DESCRIPTION OUR MITIGATION MEASURES
Physical (chronic)
INCREASED DROUGHT
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 eMalahleni Water Recalamation Plant (EWRP) has the capacity to treat 50 megalitres (ML) per day of mine-impacted water and provides potable water to
the local municipality with 6,851 ML supplied on 2023 (14% of the municipalities requirement).
• Sites incorporated physical risks and response plans into their baseline risk registers.
• We have included criteria that assess a corporate social investment (CSI) or social and labour plan (SLP) project’s ability to increase the resilience of the
community to physical climate risks into our decision-making framework.
• We currently have water management initiatives in place, which includes driving the optimisation of operation processes which leads to the reduction of water
usage on site. This is supported by our investment model for new/alternative technology that optimises the use of water.
Physical (acute)
STORMS AND EXTREME WEATHER EVENTS
Extreme rainfall intensity across all Thungela sites is
projected to increase over multiple scenarios and
time horizons. Storms and extreme weather such as
high winds and severe lightening could cause flash
flooding of mine sites and transportation networks,
infrastructural damage and operational disruptions
resulting from unsafe working conditions and
inundation.
• Every site has an emergency response plan, technical standards on managing inrush and extreme rainfall trigger action response plans which are reviewed
periodically.
• We have developed an integrated emergency preparedness response plan that considers the potential effects of catastrophic events at sites, including those that
may be associated with climate change, on the communities around our operations.
• We have extensive internal standards, systems and procedures to manage hazards on site, and are reviewing these to ensure that they include potential climate
change-related risks.
• Sites have incorporated physical risks and response plans into their baseline risk registers.
• Social performance teams have incorporated projects into their SLP’s to improve the resilience of communities to physical risks.
• We safeguard our assets and infrastructure through robust engineering design and construction standards, aligned with national design and construction
standards, regulatory requirements and enhanced through Thungela’s internal standards, systems and procedures.
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RISK DESCRIPTION OUR MITIGATION MEASURES
Policy and legal
The introduction of new or more stringent carbon
pricing mechanisms such as carbon tax, emissions
caps or limits on emissions intensity, energy
regulation, carbon trading and use of carbon offsets,
both in our host countries and in export destinations
may increase the cost of production and reduce
margins. Changing regulation may also impact
our ability to obtain, or delay, necessary project
permitting approvals.
There has been an increase in litigation in which
climate change and its impacts are a contributing
orkey consideration. In particular, a number of
lawsuits (including class actions) have been brought
against companies with fossil fuel operations
invarious jurisdictions seeking damages related
toclimate change.
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 actively monitor changes in domestic and global policy relevant to carbon emissions.
• We participate in and contribute constructively to the development of climate related policy in South Africa. We have a voluntary carbon budget, a pollution
prevention plan and use a carbon tax forecast model based on existing legislation as well as projected carbon taxes associated with the NZE scenario in our
modelling assumptions.
• We engage with policy makers, either directly or via industry associations.
• We have committed to net zero by 2050, and have developed a scenario-based approach to achieve this, which includes the substitution of part of our
electricity requirements with renewable energy.
• We seek to provide transparent disclosure on our climate change position and strategy.
• We monitor legal developments and seek advice on these as necessary.
• 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 92 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 R156 million to each of these trusts related to 2023 performance, bringing total contributions since our
listing to R1.5 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.
• We apply the theory of change to achieve our four socio-economic impact goals, two of which aim to reduce the reliance of communities on coal mining
fortheirlivelihoods by improving access to income generating opportunities and incorporating a green economy lens into our enterprise and supplier
development programme.
• 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.
Transition risks
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RISK DESCRIPTION OUR MITIGATION MEASURES
Market drivers
In response to ongoing decarbonisation of global
energy supply, there may be a structural decline in
global demand for thermal coal, which may in turn
drive downward pressure on global coal prices.
Over time, coal’s share of primary energy demand
isexpected to decline.
The global coal market is however dynamic
andsubject to the changing geopolitical and
energylandscape.
• We have committed to net zero by 2050, and have developed a scenario-based approach to achieve this, which includes the substitution of part of 19 MW
of our electricity requirements with renewable energy. Our scenario-based approach provides four distinct pathways informed by the climate scenarios. Given
uncertainty over the future, these pathways provide us with a framework for agile decision-making.
• 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 4 for our investment evaluation criteria.
• Our buy versus 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.
• Our focus on producing high-quality export coal with improved energy efficiency and lower pollutant content which is better suited to shifting customer needs.
• Our largest waste stream is the mineral waste from our coal processing plants. We are currently actively re-mining three of our discard facilities,, 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.
Reputation
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 2023 we made a
contribution of R0.2 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.
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 ISSB S2 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 FutureCoal Alliance and the Coal Industry Advisory Board (CIAB) to the International Energy Agency (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.
• We are committed to fulfilling our purpose and being responsible miners. Our performance since we listed has demonstrated our commitment as reflected in our
environmental, social and governance report and the favourable ESG ratings received in 2023.
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Using a scenario-based approach aligned with the physical
and transition scenarios described previously, together with
current business projections, including life extension projects, we
have determined the interventions required to achieve our path
tonetzero.
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 produced its first coal in
February 2024. It is expected to operate for 12 years. The Zibulo
North Shaft project, a life extension project for Zibulo’s current
underground operations, was approved 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, shared services, the eMalahleni
Water Reclamation Plant (EWRP), a rail loadout facility and central
workshops.
On 31 August 2023, we took ownership of a controlling
shareholding in the Ensham Mine in Australia. We are in the process
of aligning Ensham to our ESG reporting system and standards,
and ESG information relating to Ensham will be included in the next
annual reporting cycle.
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 relation to South Africa’s energy crisis. A feasibility study
commenced in 2023 and options being explored include use as
a lower carbon energy source for power generation, diesel fuel
substitution and liquefied natural gas.
Our strategic response to climate change
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).
More details on our operations can be found on
pages17to26 of our Integrated Annual Report.
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.
Methodology
A third-party 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.
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 22.
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.
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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 Socioeconomic Pathways
(SSP) reports. These scenarios align with
those used for the transition risk analysis
which are based on the scenarios set
out in the International Energy Agency’s
(IEA) World Energy Outlook, 2022. The
combination of these formed the basis
for the development of our approach to
net zero.
1
These transition scenarios are based on those set out in the IEA’s World Energy Outlook, 2022 of the International Energy Agency.
Mtce: Million tons coal equivalent.
PHYSICAL SCENARIO
1
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
2
Stated Policies Scenario Announced Pledges Scenario Net Zero Scenario
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 by 2050
• Accelerated transition to renewables
and electrification, and aggressive
regulations limiting the extraction and
use of fossil fuels in all major economies
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
Projected coal demand
• Continued fossil fuel investments
• Slow decrease in demand for
fossilfuels
• Coal demand in 2030: 5,149 Mtce
• Coal demand in 2050: 3,828 Mtce
• Reduced fossil fuel investments
• Modest decrease in demand for fossil
fuels
• Coal demand in 2030: 4,539 Mtce
• Coal demand in 2050: 1,613 Mtce
• No oil, natural gas and coalfields
developed due to reduction in demand
• Falls in fossil fuel prices due to lower
demand
• Coal demand in 2030: 3,024 Mtce
• Coal demand in 2050: 539 Mtce
Thungela position
Extended fossil
fuel market
Slow
transition
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 World Energy Outlook’s 2022
scenarios describe what the future may hold for coal demand
andelectricity generation.
The rate at which demand will decline in future years, depends
onthe stringency with which countries pursue climate targets.
In the scenarios above, it is clear that while there is a decrease
in the demand for coal, while less exaggerated in the STEPS and
APS, the decrease takes place over an extended period and there
will evidently be a market for coal for the next 10 to 15 years.
The inclusion of the term phrase “phase down of unabated
coalpower” in the COP 23 text is consistent with the terminology
used in the IEA’s NZE where more than 80% of the coal use
in2050 will be abated with carbon capture, utilisation and
storage (CCUS).
0
1 000
2 000
3 000
4 000
5 000
Global coal demand and supply (Mtce)
2010 2 0 21 2030 2040 2050
STEPS
APS NZE
2 954
1 177
407
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A scenario-based approach to net zero by 2050
We have adopted a scenario-based approach to chart our path to net zero, using the IEA World Energy
Outlook 2022 scenarios. It is important to remember that scenarios are not forecasts or predictions and that
accurately predicting the future is challenging, even in the short term.
Scenario analysis assists us in identifying key drivers of change and enables us to inform decision-making
and evaluate business resilience against a set of divergent but plausible futures.
It also highlights the potential risks and opportunities associated withthese.
To meet our 2050 net zero target, four distinct pathways are available, and are informed through climate
scenarios. Given uncertainty over the future, these pathways provide us with a framework for decision-
making based on triggers that may occur. Global trends and dynamics are reviewed annually to ascertain
which plausible pathway we may be on so that we can be agile and adaptive in our decision-making.
The route we take relies 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
Zibulo 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 Mergers and
Acquisitions (M&A) or projects
with renewable energy
Partner with Independent
Power Producers (IPP), use or
invest in green energy
No further coal expansion
Evaluate commodity
diversification options
Partner with 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 the EWRP
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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Resilience of our business model
Our business focus is on producing high-quality
export coal, which is increasingly preferred
over lower grades. This is particularly true for
customers in our export markets as they make the
shift to improved efficiency power stations where
lower pollutant content in coal is preferred. There
has also been an encouraging increase in the
CCUS pipeline, where the capture capacity of
CCUS projects in development, in construction or
operating has increased 48% since 2022 to over
350 million tons
2
.
Our tier 1 assets operate in the lower half of the
cost curve which, coupled with our commitment
to responsible production of a high-quality
product, contributes to our business’s resilience.
Global trends in 2023
Global coal investment in 2023 surpassed 2022’s levels, driven by
demand in China and India. Most of this investment went towards
maintaining existing operations and brownfields developments, while
in India and China, energy security concerns and power shortages
have led to the development of new mines and the expansion of
existing operations. Although investment in new coal-fired generation
capacity has slowed in recent years, it continues nonetheless
1
.
The IEA STEPS scenario sees the demand for all fossil fuels, including
coal, peaking before 2030. Despite this, electricity generation
from coal reached an all-time high in 2023, up 1% from the same
period in 2022. Unfortunately, 2023 also saw the number of people
without access to electricity increase for the first time in decades to
approximately 760 million people. This was primarily seen in Africa
where 80% of the population lives without access to electricity
1
.
Investment in variable renewable energy (VRE) deployment has
increased significantly, accounting for 12% of global generation
in 2022 and set to rise to 30% by 2030. This puts power system
flexibility at the centre of electricity security. There is growing
recognition of the role of flexible, dispatchable, thermal energy such
as abated coal in stabilising electricity systems where high loads
of VRE exist. The clean energy transition must be orderly, just and
equitable to minimise the impact on energy security and the most
vulnerable people in society.
The pathways give us the flexibility to adjust our
approach to achieving our net zero target as
the world evolves.
1
IEA (2023), World Energy Outlook 2023, IEA, Paris https://
www.iea.org/reports/world-energy-outlook-2023, Licence:
CC BY 4.0 (report); CC BY NC SA 4.0 (Annex A)
2
Global CCS Institute, 2023. The Global Status of CCS 2023.
Australia.
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Key to the closure of any mine is social transition. 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 critical.
This transformation will involve coordinated action 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 multiple stakeholders.
Our vision is to collaborate with host communities to establish regenerative
landscapes that create sustainable livelihoods. We aim to leave a positive
legacy through the integration of mine closure planning with the repurposing
of rehabilitated land and the conservation of biodiversity for the benefit
of communities and the environment. We take a holistic approach to mine
closure by identifying the full spectrum of life-of-mine opportunities, risks and
liabilities at the outset and planning with the end in mind.
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.
Stakeholder engagement and buy-in will be essential to create diversified
economies that will persist in the long term.
Mine closure projects and responsible social transition
Our 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. Reverse osmosis technology is energy intensive and
a substantial portion of the emissions in 2050 on our path to net zero are the
scope 2 emissions from this plant. The potable water is supplied to community
members in the water-stressed eMalahleni Local Municipality.
Passive water treatment or nature-based solutions (NBS) use natural
processes, such as vegetation, soil, and microorganisms, to treat water. This
approach often requires fewer energy inputs and produces lower carbon
emissions compared to traditional treatment methods. They can be more cost-
effective and enhance the resilience of water treatment systems to the impacts
of climate change, such as increased flooding, droughts, and water quality
fluctuations. Natural ecosystems like wetlands and forests provide buffering
capacity against extreme weather events and help regulate water flow and
quality. Many NBS involve restoring or preserving natural habitats, which
supports biodiversity conservation.
Years of research and development conducted in partnership with a variety
of technology and academic partners has resulted in the implementation of
both engineered and natural solutions to address water treatment post closure.
These include phytoremediation, biological sulphide reduction, and the
creation and restoration of wetland systems.
You can read more about our nature based solutions in our Environmental,
Social and Governance Report on page 52.
Passive water treatment
Central to our net zero pathway will be the incorporation of a minimum of 19
MW of renewable electricity by the end of 2026.
Further details on our progress can be found on page 29.
Renewable energy strategy
Several operations are projected to close prior to 2030, namely Isibonelo,
Goedehoop, Greenside and Khwezela. This will result in a reduction in
greenhouse gas (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.
Mine closures
The implementation of energy efficiency projects across our business.
Read more about this on page 29.
Energy efficiency opportunities
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 by:
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Scope 1 and 2 emissions
We are pleased to report an 11% reduction in 2023 from 2021’s
baseline of 819 kilotonnes (kt) of CO
2
equivalent (ktCO
2
e) and a
2.5%reduction in total scope 1 and 2 emissions to 729 kt CO
2
e from
748kt CO
2
e in 2022. Our carbon intensity dropped by 11% from
4.02 kg CO
2
e per total tonne moved (TTM) in 2022
2
to 3.56 kg CO
2
e
per TTM in 2023.
Scope 1 emissions in 2023 decreased by 3.9% to 295 kt CO
2
e
(2022:308 kt CO
2
e), with an 8.3% increase in GHG emissions
fromfossil fuel combustion and a 11% decrease in fugitive emissions.
Ourscope 2 emissions decreased by 1.5% to 433 kt CO
2
e
(2022:440kt CO
2
e).
Lower emissions are the result of lower production levels due to the
further deterioration in Transnet Freight Rail’s (TFR) performance, the
relatively lower tonnage contribution of our underground mines and
energy efficiency projects which abated 11,561 t CO
2
e.
Greenhouse gas emissions
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, shared
services, central workshops, RLT and the
eMalahleni Water Reclamation Plant) and 50%
of Mafube’s emissions.
Details on the calculations, methodologies
and emission factors for scope 1, 2 and 3 are
described in the “Appendix: Reporting Criteria“.
Scope 1:
Direct GHG emissions from fossil fuel (diesel and
petrol) combustion in mobile mining equipment
(haul trucks, loaders, dozers, vehicles), diesel
combustion in stationary equipment (generators),
fugitive emissions from underground mines and
other process emissions (sewage treatment and
water neutralisation).
Fugitive emissions
Fugitive emissions in coal mining refer to a
suite of gases associated with the formation of
coal that are liberated during the coal mining
process. Typical coal seam gas comprises
methane (CH
4
), carbon dioxide (CO
2
), nitrogen
and some trace gases such as ethane and
butane. Generally, CH
4
and CO
2
comprises the
bulk of the composition (approximately 90%
CH
4
and 10% CO
2
) with the other constituents
being negligible.
In underground mines, CH
4
is released from
both the coal produced and brought to surface
for processing, and from coal remaining
underground in pillars, walls and on the floor
and roof. This post-mining CH
4
is released
overtime and is vented to the atmosphere
viaupcast shafts.
We currently use country specific Tier 2 emission
factors for fugitive emissions. Given the age of
the geology and shallow depth of South African
coal seams, fugitive emissions from opencast
mines are assumed to have vented already while
emissions concentrations from underground
mines are lower than those seen in other
geographies.
Scope 2:
Emissions from electricity purchased from South
Africa’s national power utility, Eskom.
Scope 3:
These emissions were evaluated for purchased
goods and services, capital goods, fuel and
energy related activities, upstream transportation
and distribution, waste generated in operations,
business travel, employee commuting, upstream
leased assets, downstream transportation
and distribution, use of sold products and
investments.
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. 2021 was
chosen as a baseline as the year that Thungela
listed as a standalone entity.
Greenhouse gas emissions (kt CO
2
e)
2023 2022 2021 2020
Scope 1 295 308 362 369
Fossil fuels 121 112 137 15 5
Fugitive emissions 170 192 219 209
Process emissions 4 4 5 5
Scope 2 433 440 457 514
Total scope 1 and 2
emissions 729 74 8 819 883
Scope 3 32,033 37, 071 54,744 64,680
Scope 1 and 2 GHG
intensity (kg CO
2
e/TTM)
2
3.56 4.02 4.56 4.60
Carbon emissions from electricity consumption are the biggest
contributor to our footprint (59%) followed by fugitive emissions (23%)
and emissions from fossil fuel combustion (17%).
Metrics and targets
295
Scope 1 GHG
emissions (kt CO
2
e)
2022: 308
433
Scope 2 GHG
emissions (kt CO
2
e)
2022: 440
32,033
Scope 3 GHG
emissions (ktCO
2
e)
2022: 37,071
Our performance
2
The carbon intensity for 2022 has been restated from 4.18 based on changes to the total tonnes moved at Isibonelo, where
key mining processes such as dozing and pre-stripping had erroneously been excluded from the calculation.
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Our scope 3 emissions decreased 14% to 32,033 kt CO
2
e from 37,071 kt CO
2
e in 2022 due to the
reduction in sales volumes (use of product sold) which account for 93% of our scope 3 emissions.
We advocate for a technology agnostic approach to a low carbon future, to address our scope
3 emissions, through our membership of the FutureCoal Alliance and the Coal Industry Advisory
Board (CIAB) to the International Energy Agency (IEA). These organisations facilitate research
into technologies that abate emissions from coal combustion such as high-efficiency, low-emission
power plants, ammonia and biomass co-firing and CCUS.
1
A full review of our scope 3 emissions was undertaken in 2023 and emission factors were updated to the United Kingdom Department of Environment, Food and Rural Affairs (DEFRA) 2023 factors. The updated factors have resulted
inanotable difference in the emissions from the previous year.
2
Upstream transportation and distribution includes trucking of stock between our operations to manage our stockpiles due to TFR under performance as well as rail transportation of product to Richard Bay Coal Terminal. Prior to 2023,
emissions from rail transportation were included under category 9.
3
The 2022 values for category 4 and 9 have been restated from 163 kt CO
2
e and 124 kt CO
2
e respectively. The review of our scope 3 footprint revealed that the emissions from shipping had been excluded from category 9 in 2022
andthe value previously in this category pertained to rail transportation and was therefore included in category 4 after the update.
4
Total scope 3 emissions for 2022 have been restated from 35,947 kt CO
2
e due to the addition of shipping related emissions in Category 9.
Scope 3 emissions
In 2023, we undertook a full Scope 3 assessment on our 2023 data to better understand the
emissions across our value chain and improve our scope 3 reporting. All 15 of the scope 3
categories were assessed for applicability to Thungela and where relevant have been included.
Additional categories that have been included in 2023 are capital goods, business travel,
employee commuting and upstream leased assets. In addition to improving our disclosure in terms
of the categories disclosed, we reviewed the emission factors for each of the categories and have
updated these where necessary.
Scope 3 emissions (kt CO
2
e)
Scope 3 category
2023 2022 2021
Category 1: Purchased goods and services 30 5 30
Category 2: Capital goods 12
Category 3: Fuel- and energy-related services
1
65 544 668
Category 4: Upstream transportation and distribution
2,3
238 287
Category 5: Waste generated in operations
1
1 5 6
Category 6: Business travel 0.94
Category 7: Employee commuting 19
Category 8: Upstream leased assets 0.48
Category 9: Downstream transportation and distribution
1,3
1,789 1,12 3 1,008
Category 10: Processing of sold products N/A
Category 11: Use of sold products 29, 816 35,072 53,031
Category 12: End-of-life treatment of sold products N/A
Category 13: Downstream leased assets N/A
Category 14: Franchises N/A
Category 15: Investments 62 35
Total scope 3 emissions
4
32,033 37, 071 54,744
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Energy management
The efficient use of energy and optimising our use of energy
sources is an ongoing priority.
Fossil fuels (mainly diesel) for loading and haulage account
for 52% of our total energy consumption (and 17% of
our total emissions), with electricity accounting for 48%
(and 59% of our carbon footprint). The unit cost of both is
expected to continue to increase.
Our approach
Driving energy efficiency and optimising
energy sources
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.
In recent years, we have achieved significant energy intensity
reductions through a range of efficiency and productivity
improvement initiatives across our operations. Current
energy-efficiency improvement projects focus on improving
the efficiency of large energy users such as processing
plants, ventilation systems at underground operations
and load and haul equipment at opencast mines. Several
opencast operations have reduced idle times on their haul
fleet and dozers thereby reducing diesel consumption, with
commensurate savings being realised. The sites have also
improved road conditions and shortened hauling distances to
reduce rolling resistance and diesel consumption.
A strong focus on ventilation system optimisation in 2023
yielded significant energy savings. Initiatives included:
●
The sealing of underground sections to reduce ventilation
requirements.
●
Ventilation fan speed reduction.
●
Fan blade adjustments to reduce fan input power.
●
Optimising section layouts to enable a reduction in
the number of fans operating, without compromising
ventilation.
The above initiatives are supported by a robust project
execution framework which includes management
commitment, scheduled reviews with energy champions,
performance reviews and forums to share and reapply
learning within the business.
Supplementing electricity with renewable
supply
Central to our net zero pathway will be the incorporation
of a minimum of 19 MW of renewable electricity before the
end of 2026.
A 4 MW solar photovoltaic (PV) plant is currently under
construction at Zibulo’s underground operation. The plant is
expected to be commissioned in the fourth quarter of 2024.
Looking ahead
We will continue with the focused implementation
of identified energy efficiency and carbon
reduction opportunities, internal best practice and
benchmarking to achieve our energy intensity
reduction targets. These include reducing mining
footprints in the underground operations to allow
for further optimisation of the ventilation systems and
reduction of conveyor lengths, optimising processing
plant and conveyor operating times to avoid
running at low volumes of coal, continued focus on
idle time reduction and haul route optimisation.
Energy consumption
2023 2022 2021 2020 2 019
Energy from electricity (million GJ) 1.50 1.50 1.57 1.78 1.91
Energy from fossil fuel use (million GJ) 1.64 1.51 1.85 2.09 1.95
Total energy used (million GJ) 3 .14 3.01 3.42 3.87 3.86
Energy intensity (MJ/TTM)* 15.33 16.16 19.04 20 .16 19.40
Electricity consumption (MWh) 416,824 415, 732 494,626 434,916 415,490
Diesel consumption (kl) 45,263 41,800 57,838 51,285 41, 815
* The energy intensity for 2022 has been restated based on changes to the total tonnes (TTM) moved at Isibonelo,
where key mining processes such as dozing and pre-stripping had erroneously been excluded from the calculation.
A further 4 MW solar PV plant will be installed at the
Elders project, and is currently in the advanced feasibility
stages. External permits, approvals and rezoning
applications are being processed by the relevant
government departments and endorsement from the
National Energy Regulator of South Africa is in progress.
The strategy for the remaining renewable energy
requirement will be evaluated to determine the most
efficient and effective model for sourcing this energy,
with a view to it becoming available by the end
of2026.
Performance
Total energy consumption (electricity and diesel)
increased 4.3% to 3.14 million gigajoules (GJ),
compared to 3.01 million GJ in 2022. This was due
to an increase in total tonnes moved, particularly at
our opencast operations which increased total diesel
consumption.
Our energy intensity improved by 5.1% year-on-
year to 15.33 MJ/TTM because of a strong focus
on energyefficiency projects, eliminating diesel theft,
accelerated rehabilitation efforts at closing mines
(2022: 16.16 MJ/TTM*).
The energy efficiency projects implemented yielded
savings of 43,000 GJ, which was predominantly
brought about through ventilation optimisation.
R49
million
invested in the
Zibulo solar PV
project in 2023
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Water
Our mines are situated in a water-scarce region where
water supply may be negatively impacted by increased
demand, the further deterioration of local water
infrastructure, and climate-driven conditions, including
drought, rising temperatures and variable rainfall.
These factors underscore our responsibility to both
contribute positively to communities’ access to this precious
resource, while at the same time protecting the integrity of
critical ecosystems. This involves the proactive identification
of our key water risks, their careful management, and
Goedehoop and Isibonelo collieries and, to a lesser extent Mafube, rely on fresh water from
external sources and had a reduction target of 20% by 2023, using 2015’s 1,015 ML as a
baseline. The importation of water decreased by 52% to 369 ML from 767 ML in 2022.
Freshwater abstraction in 2023 was 64% lower than the 2015 baseline, thus exceeding
the2023 target.
Greenside, Khwezela and Zibulo were working to reduce their consumption from the EWRP
by 20% by the end of 2023 from a baseline of 1,997 ML in 2015. They have brought down
their combined water-use by 10% from 1,312 ML (restated from 1,553 ML) in 2022, to
1,097ML in 2023. This represents a year-on-year reduction of 10% and a reduction of 45%
from the 2015 baseline.
To replace freshwater and EWRP abstraction targets, which ran until 2023, we have set a new
reduction target of 2.5% annually, relative to the previous year.
Reuse and recycling rates remained constant at 96% in 2023 in line with performance in
2022, exceeding our water efficiency target of 75% by a significant margin.
Water treatment substantially mitigates of the risk of uncontrolled discharge, particularly
during periods of high rainfall. Through treatment, we reduce recharge, better manage
stormwater and create sufficient storage space in pollution control dams and underground
compartments. An overall treatment rate of 69% was achieved in 2023 against a target of
40%. This is an improvement on the 57% realised in 2022.
the development of collaborative solutions to regional water
challenges.
Please see page 49 of the Environmental, Social and
Governance Report for our approach to managing
water.
Our targets and performance
We take our stewardship of this natural resource seriously and
have ambitious targets in place.
Target: reduce freshwater
abstraction by 20% by 2023
against a 2015 baseline
369 ML
and a 64% reduction from baseline
2022: 767 ML
Target: reduce potable water
abstraction from the EWRP by 20%
by 2023 against a 2015 baseline
1,097 ML
1,097 ML and a 45% reduction
from baseline
2022: 1,312 ML
Target: treat
40% of mine-
impacted water
69%
2022: 57%
Target: zero level
3 or greater water
incidents
2
level 3 incidents
2022: 1 level 4 and 1 level
3 incident
Target: maintain
water reuse and
recycling levels
above 75%
96%
2022: 96%
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Memberships and associations
SCS does not prescribe what abatement opportunities should be
adopted by any nation or company and encourages collaboration
across the value chain to advance a progressive, innovation and
technology led coal industry. The coal value chain is a significant
contributor to sectors such as power, steel, cement, aluminium, chemicals,
and renewable infrastructure.
SCS has a strong focus on abated coal innovation and technologies.
Under SCS abated coal has a broader definition that encompasses
a range of responsible practices, emissions controls, efficiency gains
and advanced coal opportunities in the pre-combustion, combustion
and beyond combustion phases. It supports the right to choose and
establish a coal ecosystem which includes options of efficiency, process
improvements, health and safety, emissions reduction including carbon
abatement, waste management and recycling, land rehabilitation,
technology advancement and innovation.
FutureCoal recognises the objectives of the Paris Agreement and
advocates for an inclusive all fuels and all technologies international
policy framework to support the sovereign rights of all coal producing
and consuming nations and those nations which genuinely seek to
support them. It recognises that the coal industry must modernise and
mobilise, to demonstrate the commodity’s versatility in providing long-
term energy security, emissions abatement, and sustainable development
in line with a number of the United Nations Sustainable Development
Goals.
Minerals Council of South Africa
Thungela is a member of the Minerals of Council South Africa (MCSA),
which is a mining industry employers’ organisation that supports and
promotes the South African mining industry. The Minerals Council
serves its members and promotes their interests by providing strategic
support and advisory input. It represents 73 members, comprising of
90% of South Africa’s mineral production by value across a range of
commodities.
MCSA supports the goal of the Paris Agreement and together with its
members are committed to participating in a responsible transition to
a net zero by 2050, prioritising climate-resilient development and a
people-centred pragmatic energy transition.
MCSA has developed a Climate Change Framework for the mining
industry to assist members as they fulfil these commitments. The
climate change framework includes mitigation (reduction of scope
1, 2 and 3 GHG emissions), adaption (risk mapping, planning for
increased variability and intensity in weather patterns and shifting
portfolio to adapt to changing demand for minerals) and just energy
transition (minimising impact on employees, community engagement
and public awareness ensuring procedural justice is achieved
andrefine mine closure planning to account for the impacts of
theenergy transition).
In 2023, MCSA played an active role in providing comments on the
2023 Draft Taxation Law Amendment Bill, Draft Climate Change
Bill, Carbon Border Adjustment Mechanism (CBAM) and the Draft
Climate Change Strategy for South Africa’s Water and Sanitation
Sector, which included inputs from members. Active engagements
between the DFFE, the MCSA and representative members took
place in 2023 on the carbon budgets and mitigation plans in relation
to the mining sector.
As a member of MCSA, Thungela participated and supported the
position taken by the association on these matters. In particular, we
provided technical comments on the adjustments to the emission
factors for fugitive emissions proposed by National Treasury in the
Draft Taxation Law Amendment Bill.
Business Unity South Africa
We participate in the Business Unity South Africa (BUSA)
environmental sub-committee and the BUSA climate change
working group in our capacity as members of the MCSA. One of
BUSA’s strategic objectives looks at the just transition towards low
carbon, climate resilient and ecologically sustainable economies
and societies. In 2023, BUSA engaged directly with DFFE and
National Treasury on matters such as the carbon budget, mitigation
plans, Climate Change Bill, Draft Taxation Law Amendment Bill and
businesses input to COP 28. We provided technical comments on the
adjustments to the emission factors for fugitive emissions proposed by
National Treasury in the Draft Taxation Law Amendment Bill.
Our climate change advocacy position
We engage constructively with policymakers both directly
and through industry associations to advocate for our position
on matters relating to 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 support the Paris Agreement, and advocate for the
accelerated deployment of all emission reduction technologies
(per Article 10.2 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.
FutureCoal Global Alliance
Thungela is a member of FutureCoal, previously the World Coal
Association which rebranded to the FutureCoal Global Alliance in
November 2023. FutureCoal represents a think tank of forward-focused
coal participants across the coal value chain, driven to ensure that coal
prospers sustainably from producer to end user. Representing industry
leaders committed to building a sustainable pathway for the global coal
value chain. This is established in their work programmes that cover a
range of issues encompassing advanced coal technologies capable of
mitigating the environmental impact of coal from the cradle to the grave,
termed ‘Sustainable Coal Stewardship’ (SCS).
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Coal Industry Advisory Board
The Coal Industry Advisory Board (CIAB) is an advisory board to the IEA made
up of a group of high level executives from coal-related enterprises across the
value chain. The 26 members including Thungela, are drawn from 13 countries
and represent just under 80% of global coal production and consumption.
The CIAB’s role is to advise the IEA of developments in the coal markets and
coal technologies space, which informs its projections and advisory work with
member governments. In 2023, two reports were produced by CIAB, namely
“The hydrogen economy and the role of coal” and “The resilience of coal-
based industries in the transition to net zero”. The next work programme topic
for 2023/2024 will be “Maintaining a stable electricity grid in the energy
transition”.
Industry Task Team on Climate Change
Thungela is a member of The Industry Task Team On Climate Change (ITTCC),
which is a non-profit association that includes a number of large companies. The
organisation is supportive of South Africa’s international commitments to meet
our climate change goals and gradual transition to a lower carbon economy.
The ITTCC has commissioned studies on carbon pricing, just transition, GHG
pathways scenario development, post-2020 climate change mitigation system
among others, to input into policy development. The organisation encourages
knowledge sharing of best practice approaches adopted by the ITTCC
companies. In 2023, topics of discussion included just energy transition, CDP,
TCFD, the Climate Change Bill, Science-based targets and CBAM.
National Business Initiative
The National Business Initiative (NBI) is a voluntary coalition of South African
and multinational companies working towards sustainable growth and
development. The NBI has multiple projects and partnerships that are designed
to help member companies understand the nature of the challenge, build their
capacity to respond and ultimately to work collectively with government to
develop solutions to climate change and emissions mitigation in South Africa.
The NBI is a regional partner to We Mean Business and provides links with
South African business and policy makers working on climate change and
business. The NBI represents South African companies who have signed up
to commitments by pledging their support for a low carbon future. Some of
these commitments include; setting science-based reduction targets, renewable
energy and carbon pricing. The NBI is also a local partner of the CDP which
has successfully integrated climate change into mainstream business thinking.
The organisation informs members on how to respond to growing environmental
and economic risk and opportunities which arise from climate change, just
transition, biodiversity loss and water security.
Energy Intensive User Group
The Energy Intensive Users Group (EIUG) addresses members interest by working with Eskom on the immediate and growing energy deficit in
the country and what can practically be done to minimise the impact of this. The EIUG has a strong technical background and engages with
government departments on the need for a cohesive approach to energy supply to ensure security of supply, stable pricing and a clear path
forward on policy, within a just transition framework. The EIUG works in collaboration with the ITTCC and is fully committed to the transition
toward a low carbon economy. The country must transition to a lower-carbon future; the EIUG aims to ensure that this is done in a manner
and within a time-frame that protects and maintains the competitiveness of our economy. The group engages directly with government
departments, Eskom and the National Energy Regulator of South Africa.
Membership fees
Thungela pays annual membership fees to some of the industry associations. The annual fees payable are calculated according to each
association. Thungela also pays additional fees if required for projects conducted by the associations.
Association
2023 Membership
(Rand million) Comment
FutureCoal 1.84 Revenue based membership fee and work programme contribution
Coal Industry Advisory Board 0.32 (USD12,000 annual membership and USD5,000 contribution to the
work programme to fund the research report done by the International
Centre for Sustainable Carbon)
Industry Task Team on Climate Change Nil The ITTCC is a sub-committee of the EIUG
National Business Initiative 0.21
Minerals Council of South Africa 12 Production based membership fee
Energy Intensive User Group 0.29
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Reporting criteria
KPI Definition Methodology
Energy from fossil fuel
use (million gigajoules
(GJ))
Diesel and, to a lesser extent, petrol consumed by our mobile equipment,
including haul trucks, loaders, dozers, light vehicles and stationary equipment
such as generators.
Fuel data is entered in by sites in litres or m
3
onto our safety, health and environment (SHE) management system
where all calculations are automatically processed using the guidelines and factors below.
Methodology Guidelines: GHG Protocol Corporate Accounting and Reporting Standard
Calorific value source: 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 2, Energy
Density value source: Diesel-2006 HESS Material Safety and Data Sheet; Petrol- 2012 ENGEN Material
Safety and Data Sheet.
Scope 1 emissions
(ktCO
2
e)
Direct GHG emissions from under our management control and proportionate
data where we have a significant interest but not management control
(Mafube). Scope 1 emissions result from the following activities:
• Stationary combustion in generators
• Mobile combustion in mobile equipment and vehicles.
• Fugitive emissions from the coal seams during and after the mining process
that include CH
4
and CO
2
.
• Industrial processes and product use – Includes the use of limestone for the
neutralisation of acid mine drainage.
• Wastewater treatment and discharge – Includes the emissions from
anaerobic sewage treatment systems.
Scope 1 emission related data is entered onto our SHE management system by each operation. The sites enter the
activity data, such as quantity of fuels consumed, run-of-mine tons, limestone consumption and number of people
using the sewage treatment facilities and the emissions are automatically calculated by the system.
Our CO
2
e emissions from fossil fuel combustion include CO
2
, CH
4
and N
2
O.
Methodology Guidelines: GHG Protocol Corporate Accounting and Reporting Standard; DFFE
Methodological Guidelines for Quantification of Greenhouse Gas Emissions, Version No. MG-2022.1; 2006 IPCC
Guidelines for National Greenhouse Gas Inventories, Volume 2 — Energy and Volume 5 — Wastewater Treatment
and Discharge (Domestic wastewater treatment)
Emission factor source: 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 2 — Energy,
Volume 3 — Mineral Industry and Volume 5 — Wastewater Treatment and Discharge; DFFE Methodological
Guidelines for Quantification of Greenhouse Gas Emissions, Version No. MG-2022.1
Global warming potential factor: 2001, IPCC Third Assessment Report (AR3) for 100 year time horizon.
Scope 2 emissions
(ktCO
2
e)
Emissions from electricity purchased from South Africa’s national power utility,
Eskom
Purchased electricity values are captured in MWh on the SHE management system and emissions automatically
calculated applying the GHG Protocol’s location-based approach.
Methodology Guidelines: GHG Protocol Corporate Accounting and Reporting Standard (Scope 2 guidance)
Emission factor source: 2022 Eskom Integrated Report
Scope 3 emissions:
Purchased goods and
services (Category 1)
Emissions from the extraction, production and transportation of goods and
services purchased by Thungela. This includes products purchased such as
explosives, limestone and hydrated lime and the services of contractors for
the construction phases for Zibulo extension and Elders. The diesel and petrol
consumption by the contractors on their operated equipment is taken into
account.
The spend based method was applied for the purchased products. The financial cost of purchased products was
collected for 2023 and multiplied by the applicable emission factor.
The fuel related activity data collected from the contractors was converted to an energy value and then multiplied by
the emission factors for CO
2
, CH
4
, N
2
O and GWP factors.
Methodology Guidelines: GHG Protocol Corporate Value Chain (Scope 3) Standard and Scope 3
Calculation Guidance and ICMM Scope 3 Emissions Accounting and Reporting Guidance
Emission factor source: 2021, EPA , Supply Chain Greenhouse Gas Emission Factors v1.2 by NAICS-6; 2006
IPCC Guidelines for National Greenhouse Gas Inventories, Volume 2 – Energy
GWP factor: 2001, IPCC Third Assessment Report (AR3) for 100 year time horizon
APPENDICES
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KPI Definition Methodology
Scope 3 emissions:
Capital goods
(Category2)
Emissions from the extraction, production and transportation of capital goods
purchased by Thungela. Capital goods include items such as haul trucks,
vehicles, dozers and conveyors.
The spend based method was applied for the purchased capital goods.
Methodology Guidelines: GHG Protocol Corporate Value Chain (Scope 3) Standard and Scope 3
Calculation Guidance and ICMM Scope 3 Emissions Accounting and Reporting Guidance
Emission factor source: 2021, EPA , Supply Chain Greenhouse Gas Emission Factors v1.2 by NAICS-6
Scope 3 emissions:
Fuel and energy related
activities (Category 3)
Emissions from the extraction, production and transportation of fuels and
energy purchased and acquired by Thungela. This includes diesel, petrol and
transmission and distribution losses for electricity.
The diesel and petrol values in litres was multiplied by the well-to-tank emission factors. Electricity purchased in
MWh was multiplied by the transmission and distribution grid emission factor.
Methodology Guidelines: GHG Protocol Corporate Value Chain (Scope 3) Standard and Scope 3
Calculation Guidance and ICMM Scope 3 Emissions Accounting and Reporting Guidance
Emission factor source: 2023, United Kingdom Department for Environment, Food and Rural Affairs (DEFRA)
emission factor; South Africa’s 2021 Grid Emission Factor Report, 2 February 2024
Scope 3 emissions:
Upstream transportation
and distribution
(Category 4)
Emissions from the transportation and distribution of coal between sites by
truck as well as the railing of coal to Richards Bay Coal Terminal.
Trip distances were determined and multiplied by load. This was then multiplied by the rail freight and road freight
emission factors.
Methodology Guidelines: GHG Protocol Corporate Value Chain (Scope 3) Standard and Scope 3
Calculation Guidance, ICMM Scope 3 Emissions Accounting and Reporting Guidance
Emission factor source: 2023, United Kingdom DEFRA emission factor.
Scope 3 emissions:
Waste generated in
operations (Category 5)
Emissions emanating from the disposal or treatment of Thungela’s non-
hazardous waste that goes to legal landfill. Paper, plastic and scrap metal are
also sent to third parties for recycling.
The total non-hazardous waste in tonnes is multiplied by the emission factor for commercial and industrial waste. The
recycled waste is multiplied by the closed loop emission factors for paper, plastic and scrap metal.
Methodology Guidelines: GHG Protocol Corporate Value Chain (Scope 3) Standard and Scope 3
Calculation Guidance and ICMM Scope 3 Emissions Accounting and Reporting Guidance
Emission factor source: 2023, United Kingdom DEFRA emission factor.
Scope 3 emissions:
Business travel
(Category6)
Transportation by road or air and accommodation of employees in hotels for
business-related activities.
A single service provider is responsible for arranging all business travel and accommodation related activities. They
have developed a dashboard which captures Thungela’s travel emissions using the DEFRA emission factors.
Methodology Guidelines: GHG Protocol Corporate Value Chain (Scope 3) Standard and Scope 3
Calculation Guidance and ICMM Scope 3 Emissions Accounting and Reporting Guidance.
Emission factor source: 2023, United Kingdom DEFRA emission factor.
Scope 3 emissions:
Employee commuting
(Category 7)
Employee commuting between their homes and place of work by minibus taxi
and personal vehicles.
The total distance for the year by minibus and cars was consolidated and multiplied by the emission factor for the
different modes of transport.
Methodology Guidelines: GHG Protocol Corporate Value Chain (Scope 3) Standard and Scope 3
Calculation Guidance and ICMM Scope 3 Emissions Accounting and Reporting Guidance.
Emission factor source: 2023, United Kingdom DEFRA emission factor.
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KPI Definition Methodology
Scope 3 emissions:
Upstream leased assets
(Category 8)
Thungela leases the Rosebank head office building and emissions are not
included in Scope 1 or 2.
The diesel and electricity consumption values are collected from the property manager and the emissions calculated
using the guidance of the GHG Protocol.
Methodology Guidelines: GHG Protocol Corporate Accounting and Reporting Standard;
Emission factor source: 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 2 – Energy;
2022 Eskom Integrated Report
GWP factor: 2001, IPCC Third Assessment Report (AR3) for 100 year time horizon.
Scope 3 emissions:
Downstream
transportation and
distribution (Category 9)
Includes transportation- and distribution-related emissions resulting from the
shipping of products sold. Coal is cold free-on-board, which means that the
customer pays for the shipping. Thungela exports coal from the Richards Bay
Coal Terminal.
Shipping distances from Richards Bay Coal Terminal to destination ports are determined. The distance and load per
trip was multiplied (tonne.km) and then multiplied by the cargo ship emission factor.
Methodology Guidelines: GHG Protocol Corporate Value Chain (Scope 3) Standard and Scope 3
Calculation Guidance, ICMM Scope 3 Emissions Accounting and Reporting Guidance
Emission factor source: 2023, United Kingdom DEFRA emission factor.
Scope 3 emissions:
Use of sold products
(Category 11)
Includes emissions from the use of Thungela’s product (thermal coal) by
customers.
The coal that is sold locally and internationally is captured in tonnes. We assume that 100% of coal sold is
incinerated by customers. Coal values are converted to an energy value (GJ) using the calorific value of sub-
bituminous coal which are then multiplied by the relevant emission factors to estimate CO
2
, CH
4
, N
2
O and
converted to CO
2
e using the GWP factors.
Methodology Guidelines: GHG Protocol Corporate Accounting and Reporting Standard; 2006 IPCC
Guidelines for National Greenhouse Gas Inventories, Volume 2 — Energy
Emission factor source: 006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 2, Energy.
Sub-bituminous Coal.
GWP factor: 2001, IPCC Third Assessment Report (AR3) for 100 year time horizon.
Scope 3 emissions:
Investments
(Category15)
Thungela has accounted for scope 1 and 2 emissions from sites where we
have a shareholding but do not have operational control, including Richards
Bay Coal Terminal, Phola, Nasonti and Rietvlei.
Diesel, petrol and electricity activity data is captured by the relevant site and provided to Thungela to calculate the
emissions using the guidance and emission factors below. The scope 1 and 2 emissions are apportioned according
to Thungela’s percentage ownership.
Methodology Guidelines: GHG Protocol Corporate Accounting and Reporting Standard;
Calorific value source: 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 2 —Energy
Emission factor source: 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 2 — Energy ;
2022 Eskom Integrated Report
GWP factor: 2001, IPCC 3rd Assessment Report (AR3) for 100 year time horizon.
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GHG emissions (kt CO
2
e)
2023 2022 2021 2020
Scope 1
295 308 362 369
Fossil fuels 121 112 137 15 5
Fugitive emissions 170 192 219 209
Process emissions
4 4 4.77 5
Scope 2 433 440 457 514
Total scope 1 and 2 emissions 729 74 8 819 883
Scope 3
1
32,033 37, 071 54,744 64,680
Scope 1 and 2 GHG intensity (kg CO
2
e/TTM)
2
3.56 4.02 4.56 4.60
Energy consumption
2023 2022 2021 2020
Energy from electricity (million GJ) 1.50 1.50 1.57 1.78
Energy from fossil fuel use (million GJ) 1.64 1. 51 1.85 2.09
Solar energy (million GJ) 0.00022 0 .1 0.38 0.36
Total energy used (million GJ) 3 .14 3.01 3.42 3.87
Energy intensity (MJ/TTM)
3
15.332 16.164 19.04 20 .16
Electricity consumption (MWh) 416,824 415,732 494,626 434,916
Diesel consumption (kl) 45,263 41,800 57,838 51,285
Water
2023 2022 2021 2020
Water withdrawals by source (1,000 m
3
)
Freshwater withdrawal 369 767 865 785
Potable water withdrawal from EWRP
4
1,097 1, 312 1 , 711 1 , 711
Total withdrawal 2 7,115 34,472 28,444 25,861
Surface water
5
19,530 25,788 19,384 16,929
Ground water
5
5,862 6,413 6,050 5,537
Third-party 1,753 2,271 3,067 3,432
Water treated (%) 69 57 57 66
Water efficiency (reuse/recycle) (%) 96 96 95 58
Water discharges (1,000 m
3
)
Total water discharged 25,842 19,869 21,835 20,347
Treated water discharged from EWRP
6
9,764 5,995 7,408 5,757
Total consumption 9,575 12,567 11 , 9 9 4 13 , 075
Performance tables
1. Total scope 3 emissions for 2022 have been restated from 35,947 kt CO
2
e due to the addition of shipping related
emissions in category 9.
2. The carbon intensity metrics for 2022 have been restated based on changes to the total tonnes moved at Isibonelo, where
key mining processes such as dozing and pre-stripping had erroneously been excluded from the calculation.
3. The energy intensity metrics for 2022 have been restated based on changes to the total tonnes moved at Isibonelo, where
key mining processes such as dozing and pre-stripping had erroneously been excluded from the calculation.
4. 2020-2022 potable water values for Zibulo colliery corrected, previously overstated due to incorrect inclusion of non-
potable flow to store.
5. In the 2022 environmental, social and governance report surface water and ground water values were reversed due to a
mapping error in the report production process. This has been corrected.
6. Capturing error corrected on 2020-2022 treated water discharged from EWRP – previous numbers included EWRP
consumption and discharge
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TCFD Index
TCFD recommendation Page
GOVERNANCE
Disclose the organisation’s governance on climate-related risks and opportunities
a) Describe the board’s oversight of climate-related risks and opportunities
Climate Change Report (CCR): 10-12
Integrated Annual Report (IAR): 92-134
b) Describe management’s role in assessing and managing climate-related risks and opportunities
CCR: 12
IAR: 95, 130-131
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: 17-20
b) Describe the impact of climate-related risks and opportunities on the organisation’s business, strategy and financial planning CCR: 17-20
c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario CCR: 21-26
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: 15
b) Describe the organisation’s processes for managing climate-related risks CCR: 14-15
c) Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management process CCR: 14-15
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: 27-32
b) Disclose scope 1, scope 2 and, if appropriate, scope 3 GHG emission and the related risks CCR: 27-28
c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets CCR: 27-28
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Glossary
TERM USED Definition
APC Advanced process control
APS Announced pledges scenario
BUSA Business Unity South Africa
CBAM Carbon Border Adjustment Mechanism
CCUS Carbon capture, utilisation and storage
CDP Carbon Disclosure Mechanism
CEO Chief executive officer
CIAB Coal Industry Advisory Board (to the International Energy Agency)
CO
2
Carbon dioxide
CO
2
e Carbon dioxide equivalent
CSI Corporate social investment
Decarbonisation Reducing the carbon emissions associated with electricity, industrial activities, and
transportation
DEFRA United Kingdom Department of Environment, Food and Rural Affairs
DFFE Department of Forestry, Fisheries and the Environment
EIUG Energy Intensive Users Group
Ensham Mine An unincorporated joint venture between Sungela and Bowen
ESG Environmental, social and governance
EWRP eMalahleni Water Reclamation Plant
GHG Greenhouse gas
GHG Protocol Standards and guidance for corporate accounting and reporting on emissions, which
help governments and business leaders to understand, quantify, and manage emissions.
The GHG Protocol separates emissions into different scopes depending on source.
It is available at: https://ghgprotocol.org/sites/default/files/ standards/ghg-protocol-
revised.pdf
TERM USED Definition
Group Thungela and its subsidiaries, joint arrangements and associates
Fugitive emissions Emissions that are not produced intentionally and are not physically controlled.
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
ITTCC Industry Task Team on Climate Change
JSE Johannesburg Stock Exchange Limited
KPI Key performance indicator
kt A measure representing 1,000 tonnes
LOM Life of mine
LTIP Long-term incentive plan
Mafube Mafube Coal Mining Proprietary Limited
MCSA Minerals Council of South Africa
Mineral Resource A concentration or occurrence of material of intrinsic economic interest in or on the earth’s
crust in such form, quality and quantity that there are reasonable prospects for eventual
economic extraction. The location, quantity, grade and continuity of a mineral resource
are known, estimated or interpreted from specific geological evidence and knowledge.
Mineral Resources are sub-divided, in order of increasing geological confidence, into
inferred, indicated and measured categories
ML Megalitre
M&A Mergers and acquisitions
Mt Million tonnes
Mtce Million tonnes coal equivalent
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TERM USED Definition
MTCO
2
e Million tonnes carbon dioxide equivalent
Mtpa Million tonnes per annum
NBI National Business Initiative
NBS Nature-based solutions
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
NZE Net zero scenario
ORM Operational risk management
Paris Agreement An agreement adopted on 12 December 2015 at the Conference of the Parties (COP) to
the United Nations Framework Convention on Climate Change (UNFCCC), dealing with
emissions mitigation, adaptation, and finance, which came into force 4 November 2016
(UN Doc FCCC/CP/2015/10/Add.1).
ROM Run of mine, representing the product extracted from mining operations before it is
processed into saleable product
SCS Sustainable Coal Stewardship
SLP Social and Labour Plan
STEPS Stated policies scenario
STI Short-term incentive
t Metric tonnes 1,000 kg
TCFD Task Force on Climate-related Financial Disclosures
Thungela Thungela Resources Limited
The Bill The Climate Change Bill
TFR Transnet Freight Rail
TTM Total tonnes moved
UN SDGs United Nations Sustainable Development Goals
USD United States Dollar
VRE Variable renewable energy
ZAR South African Rand
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Additional information
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
COMMENT OR QUERIES
RELATED TO THIS REPORT
Nikki Fisher
Email: nikki.fisher@thungela.com
INVESTOR RELATIONS
Hugo Nunes
Email: hugo.nunes@thungela.com
Shreshini Singh
Email: shreshini.singh@thungela.com
MEDIA CONTACTS
Hulisani Rasivhaga
Email: hulisani.rasivhaga@thungela.com
Forward-looking statements disclaimer 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
announcement 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 announcement, this inside information is now considered to be in the public domain.
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www.thungela.com