MAC: Mines and Communities

Banking on "clean energy" in South Africa?

Published by MAC on 2009-09-22

South Africa's fourth largest investment bank has said it "may not" finance mining companies and energy producers which emit large amounts of global greenhouse gases.

Among Nedbank's clients is Kumba Iron Ore - by far the country's largest iron ore miner, itself majority-owned by the UK's Anglo American corporation.

The iron and steel industry is among the world's three biggest industrial contributors to adverse climate change.

South Africa's Nedbank Warns On Carbon Emissions

Phakamisa Ndzamela, PlanetArk

16 September 2009

JOHANNESBURG - South Africa's No. 4 bank Nedbank said on Tuesday it may not finance big carbon emitting companies like miners and electricity producers in future, unless they try to reduce their carbon footprints.

Nedbank, which promotes itself as a "green bank," said it planned to spend between 10-20 million rand ($1.34-$2.7 million) on awareness and would push harder for alternative energy forms in the future.

"Certainly we would far rather be financing alternative forms of energy... So projects that are going to have to pay carbon penalties are just not going to be viable," Chief Executive Officer Tom Boardman said.

"If we go into something where we believe it is absolutely off-side then we would have to make the call. No we are not going to fund a project that is not even attempting to make a difference."

Carbon emissions are a threat to the global climate and could lead to heavier rains, stronger storms and rising sea levels in the near-future.

South Africa is Africa's heaviest polluter due to its dependence on coal-fired electricity.

Boardman said Nedbank had clients in carbon-intensive areas like mining and electricity generation. The companies include petrochemicals giant Sasol, power utility Eskom and miner Kumba Iron Ore.

"We have to understand that this is a process and a journey and the developing nations can't just switch off everything. It is a fact in South Africa that the majority of our electricity is produced by coal," Boardman said.

"But we absolutely are committed to working with our client base to increase their awareness and to drive toward projects falling within the parameters ultimately that we commit ourselves to," he added.

(Editing by Marius Bosch and Elaine Hardcastle)

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