Gold miners must rapidly switch to renewable electricity generation if the industry is to curb emissions sufficiently to align with the Paris Agreement’s 1.5-degree Celsius (2.7-degree Fahrenheit) global warming target, the World Gold Council (WGC) said on Wednesday.
The pressure on gold miners to justify their high carbon emissions is intensifying as prices for the safe-haven metal surged this year.
Gold sector emissions need to be reduced by 80% by 2050 to be aligned with the “well-below” 2C scenario, or 92% by 2040 to align with a 1.5C scenario outlined in the climate accord, the industry body has said.
“Companies need to demonstrate action and awareness of the need to decarbonize their operations at the mine site,” said John Mulligan, director of climate change at the WGC.
Replacing 45% of both grid power and direct fossil fuel-generated electricity would place the industry on track for the 1.5C climate target, the WGC found.
“However, persistent use of coal-fired electricity, either directly or via grid supply, in a few locations, is a potential obstacle to accelerating progress towards climate target alignment,” it said.
The report, based on data from 158 gold mines collected by research group Wood Mackenzie on behalf of the WGC, excludes China – the world’s biggest gold producer – due to “lack of available and consistent data.”
The 158 gold mines surveyed together account for about 55% of the world’s large-scale industrial gold production.
The WGC projects gold production will stay more or less flat over the next decade, but energy-intensive mines will be replaced by more energy-efficient ones, helping to curb the sector’s emissions.
Much of the necessary reduction in emissions, however, will depend on companies investing in renewable electricity generation and phasing out fossil fuel power sources, the WGC said.
Top gold producer Newmont Corp. on Tuesday said it is studying potential for wind and solar installations at some of its mines and would spend $500 million over five years to meet climate change targets.