Gold Producers Tackle Emissions with Mixed Results in ESG Metrics
Gold Producers Achieve Emissions Reduction in 2024
In a notable shift, global gold producers have successfully reduced their combined Scope 1 and 2 greenhouse gas emissions to below 30 million tons of CO? equivalent this year, marking the lowest level in a decade. Despite this accomplishment, the rising gold prices and heightened focus on environmental, social, and governance (ESG) performance have brought new challenges that need addressing.
Annual Emissions Decline and Economic Factors
The latest report from Metals Focus revealed a 2% decline in absolute emissions among the industry's leading miners, dropping to 29.9 million tons CO?e. This marks the fourth consecutive year of falling emissions, a positive trend amid economic pressures. Factors like asset divestments, the rise of renewable energy projects, and improvements in grid connections have contributed to this reduction.
Average Emission Intensity Concern
However, it's essential to note that the overall decline in emissions coincided with a decrease in gold output. As a result, the average emissions intensity has seen a continuous increase for the third year, raising concerns within the sector about balancing sustainability with production demands.
Renewable Energy Innovations
The quest for greener mining solutions has spurred innovations across the industry. For instance, Barrick and Newmont's collaborative solar facility in Nevada is projected to eliminate 234,000 tons of CO?e each year. Meanwhile, AngloGold Ashanti has connected its Geita mine in Tanzania to the national grid, showcasing the push toward renewable energy. Kinross has also made strides by cutting back on diesel usage at its Bald Mountain site.
Challenges in Transition
Even with these advancements, obstacles remain evident. Solidcore Resources in Kazakhstan experienced disruptions in accessing renewable energy, illustrating the volatility of decarbonization efforts in the industry.
Sector Energy Consumption Disparities
The energy dynamics within the gold mining sector are not uniform. Current data indicates stable average energy intensity at about 9.3 gigajoules per ounce, which is significantly higher than levels seen a decade ago. While certain regions like the US and Australia showcase promise in electrification initiatives, projects in Africa and Latin America predominantly rely on fossil fuels, presenting challenges toward widespread renewable adoption.
Safety Issues on the Rise
On the safety front, a troubling trend has emerged: fatalities among workers in the gold mining sector have increased to 27 this year, compared to 24 in the preceding year. Most incidents were reported within underground operations in Africa, underscoring the hazardous nature of mining.
Commitment to Safety Improvements
Consultant Michael Bedford from Metals Focus emphasized the inherent risks of mining, advocating for continuous enhancements in safety practices to achieve a 'zero harm' objective. Companies like Northern Star and B2Gold have even extended their fatalities-free records to 11 and 9 years, respectively. Yet, this year saw eight companies report fatalities, a significant setback after two years of improvement.
Environmental Footprint Metrics
Despite the increase in some types of emissions, notable progress has been made in reducing sulphur dioxide and nitrous oxide emissions by 16% and 8%, respectively. However, broader sustainability metrics indicate increasing challenges, mainly driven by declining ore grades requiring more processed rock for each ounce of gold extracted, thus exacerbating energy consumption, waste, and water usage.
Global Industry Dynamics and Emergence of New Producers
The industry's landscape also reflects changing dynamics with the inclusion of companies like Zijin Mining and Shandong among the world's top producers. Zijin, in particular, has reported substantial emissions and hosts nearly a billion tons of waste rock, reflecting its dual focus on economic growth and local benefits.
Price Trends in Gold Mining
As the year progresses, the VanEck Gold Miners ETF (GDX) has seen a notable rise of 106.54%, demonstrating the growing interest and potential profitability of gold mining investments.
Frequently Asked Questions
What are Scope 1 and 2 emissions?
Scope 1 and 2 emissions refer to direct greenhouse gas emissions from owned or controlled sources and indirect emissions from the generation of purchased electricity, respectively.
Why are ESG metrics important in mining?
ESG metrics help investors and stakeholders assess how mining companies manage environmental impacts, social responsibilities, and governance practices, impacting reputation and investment decisions.
What is the significance of renewable energy in mining?
Renewable energy adoption in mining is crucial for reducing carbon footprints, improving sustainability, and reducing dependence on fossil fuels.
How is safety performance tracked in mining?
Safety performance is tracked through reports on fatalities, incidents, and health risks, often analyzed annually to enhance safety protocols across the industry.
What trends are seen in gold mining investments?
The rising price of gold and increased attention to sustainable practices are driving more investment into gold mining, as seen in the substantial growth of ETFs like GDX.
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