Anglo American Annual Report 2012

OPERATING AND FINANCIAL REVIEW STRATEGY IN ACTIONSTRATEGIC ELEMENT: Operating safely, sustainably and responsiblyCLIMATE CHANGE AND ENERGYClimate change presents a significantbusiness challenge. The key riskswe face are: increasing energy andcompliance costs associated with newpolicy measures, including potentiallysignificant costs from carbon pricing;changing demand for our products;and increased risks associated withthe physical impacts of climate changeon our operations and neighbouringcommunities. We aim to enable ouroperations and local communities toaddress and adapt to the causes andeffects of climate change.Our strategy and managementapproachClimate change is integrated intomulti-disciplinary, Group-wide riskmanagement processes. We are in thesecond year of our 10-year climatechange strategy.Operational excellenceOur leading energy and carbonmanagement programme, ECO 2MAN,has enabled us to understand howenergy management can be used tocreate additional business value. Itprovides a structured approach toachieve our objectives and it helpsour people understand theirresponsibilities and accountabilities.Each mine has a programme in placeto continually improve how it managesenergy usage, with targets to reduceconsumption in relation to a businessas-usualprojection.During 2012, we established a Groupcarbon steering committee tocoordinate activities that lower ourexposure to carbon compliance costs,including building our capacity to buyand sell carbon allowances.Total energy consumed2008–2012Million GJ1201151101051002008 2009 2010 2011 2012Anglo American actualBusiness as usual (BAU) baselineTotal GHG emissions2008–2012Million tonnes2520152008 2009 2010 2011 2012Anglo American actualBusiness as usual (BAU) baselineTechnologyAchieving our long term milestonesin energy management hingeson identifying and implementinginnovative, ‘step-change’ technologies.We are researching manyopportunities with key stakeholders,and have invested nearly $200 millionto date in low carbon technology,such as the Capcoal and MoranbahNorth methane-fired power stationsin Australia.Our technology vision is to run costefficient, low-carbon (if not carbonneutral) mines by 2030. Our approachfocuses on three areas: reducing howmuch energy we use; recovering andre-using some of that energy; andusing alternative energy sources. Inparallel, we continually investigateopportunities for carbon offsetting.Our longer term research areasinclude using liquefied petroleumgas (LPG) and methane capture topower trucks, introducing clean coaltechnology, and piloting platinumbasedfuel cells as an alternative powersystem for underground locomotives.In recent years we have focusedon assessing the potential physicalimpacts of climate change in a numberof potentially high-risk operationalregions and sites. Building on thisclimate change impact assessmentwork, in 2012 we worked with the UKMet Office to prioritise all our projectsacross the Group in terms of whenclimate change ‘time of emergence’signals will arise. We are also pilotinga study to capture issues aroundclimate and weather model data intoproject design.Engagement and partnershipsWe continue to work withgovernments, our business peers,and other stakeholders to help shapeequitable and effective climate changepolicies. In South Africa, we areespecially active in discussions arounda carbon pricing policy and havewelcomed the opportunity toparticipate in the debate and in thedevelopment of a solid fact base toinfluence an effective carbon policyaligned with the country’sdevelopment objectives.30 Anglo American plc Annual Report 2012