Will smaller miners embrace net zero emissions?

The world’s largest gold mining companies are rapidly adopting net zero carbon emissions targets amid an investor-driven push to limit climate change – but smaller producers are continuing to lag behind.

Following a flurry of announcements this year, most gold majors are now signed up to net zero by 2050, in line with Paris Agreement requirements, which seek to keep the increase in global warming to below 2.0C, and preferably 1.5C.

But for mid-tier and smaller producers, climate commitments are still a work in progress, with companies evaluating steps to take them closer to the goal, with few, if any, having net zero targets in place.

TOP TIER TARGETS

Australia's Newcrest Mining is one of the latest gold majors to set a net zero by 2050 goal.

“As an industry more broadly, we have the ingenuity, technology and capability to take on this challenge and reduce our carbon footprint,” CEO Sandeep Biswas said earlier this month.

US-based Newmont – Latin America’s largest gold producer – was among the trailblazers in the sector, setting a net zero goal last November, followed by Yamana Gold early in 2021.

And Canada's Barrick Gold and Agnico Eagle Mines, both of which have mines in Latin America, adopted net zero targets in April, while Kinross Gold states on its website that its ultimate objective is being a net zero emitter by 2050.

WORK TO DO

While few smaller gold-focused companies have set net zero targets, work toward this goal is advancing, according to World Gold Council climate lead John Mulligan.

The focus currently is on identifying and evaluating decarbonization steps, following in the footsteps of larger producers, some of which already have fairly well-defined pathways to net zero emissions.

“One of the challenges for smaller companies particularly, is that what a net zero commitment means still needs to be understood in practical terms,” Mulligan told BNamericas.

“Many of the companies I speak to, and this is sensible and rational, are seeking to understand first of all what is the decarbonization pathway that is available to us, what does this mean, and does this allow us to commit to net zero?

“If we’re not ready to commit to net zero, are we able to define intermediate targets that take us along that path? That’s where we currently are with quite a few of the smaller companies.”

This process is evident in recent reports and announcements by mid-tier companies.

Equinox Gold, which has mines in Brazil, Mexico and the US, and Mexico-focused Torex Gold have indicated that they are developing climate change strategies and targets, with the latter planning to release a climate report later in the year.

Torex recently signed an agreement with Scatec to build an 8.5MW solar plant at its Morelos property, which includes the El Limón-Guajes mine (in picture).

The plant will lower scope 2 emissions by up to 8.6%.

In addition to this ongoing process, there are other signs of progress toward setting Paris Agreement goals.

These include general acceptance that carbon emissions reductions are the way forward for the industry.

“There is a broad consensus now, where there might not have been 4-5 years ago, that this is the direction of travel,” Mulligan added.

Secondly, concerns that decarbonization could pose a threat to power stability and costs are easing.

“The conversations I was having a couple of years ago were focused on very firm concerns about power supply,” Mulligan said.

“These concerns are receding quickly as the solutions are becoming more accessible, and the costs of renewables are becoming very competitive.”