Page 13 - AMANGO MODEL ANSWER 2

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clearly in conflict with objective 1.3

Recommendation: Liaise with the chamber of mines to collaborate on a common action to either
lobby government or challenge the charter in a court of law.

Justification: Some of the provisions appear discriminatory, will potentially deprive some

shareholders of their property –in violation of the constitution. It manipulates the definition of HDSAs
and fails to provide the much-needed regulatory certainty to promote investment in the sector.

Actions: Group Legal should contact the Chamber of Mines to seek their representation for all
mining companies. The Board should investigate the ethical concerns raised separately and find
ways to correct any perceptions the government may have about our commitment to transformation.
B5. CLIMATE CHANGE AND SUSTAINABILITY STRATEGY

This issue presents an opportunity to improve our standing for sustainability whilst generation more
electricity to power our future operations. Our goal is to reach the 20% CO2 emission reduction
target in 5 years, while increasing capacity to cope with an expected power demand rise of 10% over

that period. We evaluate each strategy as below:

Strategy 1:

The changes in mix of generation stations have the following effects:
Power Maximum Operating Capital cost No. of Total capital Total CO2
station type generating cost of (US$) stations invested emissions
power (MW) electricity (US $m) (million
(US$/MWh) tonnes)
Coal Small 300 25 1,320 3 5,280 3.15
Large 600 25 2,640 3 10,560 12.61
Gas Small 300 50 300 7 2,400 3.15
Large 900 50 900 2 1800 7.10
Nuclear 1200 20 6,000 3 12,000 0.50
Total 32,040 26,51

The new nuclear station will cost US$6000m. Our total power output is maintained at 10,200 MW
(300*3 + 600 * 3 + 300 * 7 + 900 * 2 + 1200 * 3) and the total CO2 emissions falls by 15.4% (26.51 to
22.43 million tonnes). The operating cost of electricity will fall on average as a nuclear station is the

cheapest one to operate. Therefore, we have maintained our capacity and reduced CO2 emissions
but it will not have covered the rise in demand nor met the government’s 20% target for CO2
reduction.

Strategy 2:
Developed by The CharterQuest Institute for 'The CFO Business Case Study Competition 2017'
www.charterquest.co.za | Email: thecfo@charterquest.co.za