Gold Fields Pioneers Carbon Trading in the Gold Industry
Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) is set to become
the world’s first gold mining company to sell Certified Emissions Reductions
(CERs), the financial securities used to trade carbon emissions.
Gold Fields will derive the CERs from the capture of methane gas at its
sell 1,700,000 CERs to European energy trading company Mercuria Energy
Trading SA under forward contracts which will run until 2016. The transaction
was brokered by TFS Green, the carbon credits broker and environmental
business of the worldwide Tradition Group.
CERs are traded globally and frequently bought by industrial companies as
part of their efforts to alleviate their own carbon emission obligations. At
current CER values and exchange rates, the CER contract is worth about R200
Gold Fields will use the funds to finance a number of projects linked to
the methane capture. The first phase, set for completion before the end of
this year, comprises the installation of a methane extraction system
underground and flares above surface at a cost of about R42 million. For the
second phase Gold Fields is looking at ways of using the gas to generate
electricity, thereby converting a harmful greenhouse gas into a valuable
resource. Construction of a power generation plant, with the potential to
generate about 5MW of electricity, is scheduled to start next year.
So far CERs-linked projects in
number of projects registered by the Clean Development Mechanism (CDM)
executive board, the global body tasked with administering CERs trading. Gold
Fields’ Beatrix project is one of around 15 South African projects that have
to date received Designated National Authority verification from
The Gold Fields/Mercuria CER transaction, which is subject to final
regulatory approvals, was yesterday recognised by the
Risk magazine as the “Deal of the Year” for 2010 in its annual energy risk
Gold Fields’ Chief Executive Officer,
addition to the obvious financial and environmental benefits, this project
will result in a safer working environment for our people at Beatrix, as it
eliminates the hazard of underground mine methane, and it is one of many
examples that shows Gold Fields’ commitment to being the global leader in
sustainable gold mining.”
Methane emanates from underground geological features such as faults,
fissures and dykes and escapes during the normal course of mining operations.
If released into the atmosphere it is a potent greenhouse gas. At Beatrix the
methane gas will be captured at source underground and then conveyed via a
network of pipes to the surface, where the methane will be flared.
Installation of the underground pipes is well underway.
“We are delighted to have been involved with this transaction – we firmly
believe that projects in
carbon emission reduction projects are where the market will be focused in
the future,” says
Mercuria Energy Trading’s
“This is our first transaction in
of our newest international office in
to improving the geographical distribution of carbon finance to include the
The Beatrix development is the first in a number of carbon projects Gold
Fields is investigating to bolster its sustainable mining practices. The
strategy is underpinned by efforts to become more energy efficient and thus
reduce dependence on coal-fired electricity.
Gold Fields was advised by Promethium Carbon, a South African carbon
advisory company, throughout the development of the project, by assisting in
the tender development, the evaluation and allocation of the tender.
About Gold Fields Limited
Gold Fields is one of the world’s largest unhedged producers of gold with
attributable production of 3.6 million ounces* per annum from nine operating
extensive growth pipeline with both greenfields and near mine exploration
projects at various stages of development. Gold Fields has total attributable
Mineral Reserves of 81 million ounces and Mineral Resources of 271 million
ounces. Gold Fields is listed on JSE Limited (primary listing), the New York
Stock Exchange (NYSE), the Dubai International Financial Exchange (DIFX), the
please visit http://www.goldfields.co.za.
*Based on the annualised run rate for the second quarter of F2010
About Mercuria Energy:
Mercuria Energy Group is an international group of companies active over
a wide spectrum of energy markets including crude oil and refined petroleum
products, natural gas, power, coal, biodiesel, vegetable oils and carbon
emissions. Mercuria Energy is one of the world’s five largest independent
energy traders, with a strong commitment to growth in its carbon trading
sector. The company has offices in twenty countries. Its largest trading
floor is in
About TFS Green:
TFS Green is part of Tradition, a global leader in interdealer broking.
With offices in 24 countries, Tradition covers over 3,000 institutional
clients and covers markets ranging from global foreign exchange, energy and
environmental products, commodities, equities, coal, freight, precious
metals, property and pulp & paper markets to money markets, derivatives and
bonds and repos.
Tradition’s CDM & JI business, TFS Green, is a market leader in its
field. It was awarded Best Primary Originator GHG Emissions Kyoto Projects
Credits (JI and CDM), Best Broker Spot & Futures GHG Emissions EU ETS, and
received a total of 16 awards for its services within the environmental
markets from Environmental Finance in the last awards – the highest number
won by any company in the history of the awards. TFS was also awarded “Broker
of the Year 2008” by Point Carbon. TFS has various offices around
works through associate firms in
TFS Green is the trading name of Tradition Financial Services Ltd which
is regulated by the Financial Services Authority in the UK. For more
information, visit http://www.tfsgreen.com.
SOURCE Gold Fields Limited