ESG obligations have swiftly moved to the forefront of the mining narrative. While adhering to high ESG standards is now expected, it can be challenging for a mining company to view these obligations as anything other than a financial burden. Yet, more and more people are focusing on what it means to mine metals sustainably.
ESG compliance presents an opportunity for consumers to be more selective, particularly in a world where mining companies are a dime a dozen. This is especially relevant for gold. More than ever, investors are seeking to avoid unexpected liabilities, and consumers now prefer ethically sourced gold for their bracelets, rings, and earrings, and are willing to pay top prices for gold that is mined and smelted with minimal damage to the environment.
In 2021, the Worldwide Fund for Nature (WWF) released a detailed report on the sustainability of the gold supply chain, which was less than flattering. The report, based on a 2014 cradle-to-gate study (extraction to factory gate study) evaluating the environmental impact of 63 metals, estimated that producing 1kg of gold results in 12,500kg of CO2 emissions. This amounts to approximately 41.25Mt of CO2 emissions for global gold production in 2019.
Additionally, the WWF report highlighted that gold mining and purification are highly energy-intensive compared to other metals. Producing 1kg of gold requires 208,000 megajoules of energy, whereas silver and copper require 3,280 and 53.7 megajoules, respectively.
Hence, miners and producers operating in ESG conscious countries, such as Canada, which require miners to adhere to stringent environmental and social regulations and encourage the use of low-carbon electricity, can benefit from this market demand and the growing magnification on green gold mining practices.
With access to grids where 80% of the power comes from renewable sources or nuclear energy, Canadian gold mines boast a significantly lower carbon footprint compared to other leading gold-producing countries. Additionally, Canadian mines have relatively low levels of greenhouse gas emissions across a range of commodities compared to mines based elsewhere in the world.
Due to existing clean energy infrastructure, Canadian gold miners can request higher prices for their eco-friendly gold. They can also reinvest their higher profits into technologies to further enhance the sustainability of their operations in the future.
Additionally, Canada’s regulations, particularly the new Clean Fuel Standard and the higher carbon tax, which are a part of the country’s climate plan, are expected to accelerate ESG practices in the mining sector as a whole. This may seem burdensome to a junior miner looking to save its pennies, but a company focused on green gold, or any green mining extraction, will benefit from embracing these low-carbon rules, as it will make its product more appealing to ESG-conscious consumers.
Just last year, The Mining Association of Canada’s (MAC) Community of Interest Advisory Panel selected New Gold’s New Afton Mine, a leading operation in Canada’s mining sector, to receive the 2023 prestigious Towards Sustainable Mining® (TSM) Excellence Award. New Gold sustainability project, focused on community engagement and environmental stewardship, were recognized at the CIM Awards Gala in Montreal.
“We are proud that TSM, a made-in-Canada standard, is now in the process of being implemented by 14 mining associations around the world, making it the most widespread ESG programme of its kind,” said Gratton. “We applaud the work being done by this year’s Excellence Award winners as it showcases the positive results that can be achieved when environmental stewardship and community engagement are prioritized.”
The TSM is an example of how Canadian gold producers stand at the forefront of a promising market shift toward sustainable mining, including gold, with a unique opportunity to capitalize on their already stringent ESG practices. As global demand for ethically sourced products grows, following Canada’s lead in embracing and promoting new ESG strengths can positively impact mining companies and turn them into an advantage.
