Precious Metals

Gold industry considers its carbon footprint

The Indian government is attempting to reduce the nation's reliance on imported gold by supporting the recycling of gold from temple and private citizen sources.

Image courtesy of Indian Express.

Gold and Climate Change: An Introduction, a new report released by the World Gold Council, reviews the gold industry’s place in an economic landscape being transformed by environmental concerns.

An executive summary of the report reasons: “As with other precious metals, a lot of ore is mined and processed to produce small amounts of pure metal. Consequently, gold production uses a lot of energy. On a per volume basis, therefore, it has a relatively high GHG intensity.” GHG refers to greenhouse gas emissions associated with the production of a product.

“However,” the report continues, “our findings indicate that total GHG emissions from newly-mined gold are significantly lower than from other major products sourced primarily from mining, such as steel, aluminium and coal.”

The report also notes that 25 to 30 percent of the world’s annual gold supply is from recycled metal, and that, because “nearly all the gold ever mined is still present and potentially available for re-use,” while “newly mined gold has averaged approximately 70% of total supply over the last 10 years, annual mine production has been consistently less than 2% of total stocks of above-ground gold.” 

From 1980 through 2015, global gold supply from new mine production increased from just under 1,400 tonnes to almost 3,000 tonnes. The supply available from recycled gold increased from less than 2,000 tonnes in 1980 to about 4,500 tonnes in 2015, according to the report.

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Charts with the report indicated as well that global gold demand for investment over the 35-year period varied, from less than 2,000 tonnes to more than 4,500 tonnes. Demand from the jewelry sector varied as well, from less than 500 tonnes to more than 3,000 tonnes, measuring near 2,000 tonnes by 2015. Demand from the technology sector spanned from near 500 tonnes in 1980 to more than 3,500 tonnes in the late 1990s to under 2,500 tonnes in 2015.

Environmentally friendly

Gold mining companies are implementing environmentally friendly techniques in an effort to reduce the carbon imprint.

According to the report, “In addition to industry steps to reduce GHG emissions, gold itself may play an important role in technologies that help facilitate the transition to a low carbon economy. Of particular relevance in the context of mitigating climate change, gold in a nanoparticulate form has considerable potential in a range of applications that can help reduce GHG emissions.”

Applications include use in catalysts to help convert carbon dioxide to fuel, use in hydrogen fuel cells, and use in production and storage of solar power.

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Paul Fisher, chair of the London Bullion Market Association, acknowledges in his foreword to the report that in less than three years “climate change has gone from being a marginal, social issue, pursued by a minority of concerned activists, to being a mainstream political and financial issue.”

The report quotes “Principles for Responsible Investment, Investor Action on Climate Change,” from 2017, as stating, “Asset owners see climate change as one of the most important longterm trends for investment and … they are taking action on this.”

Fisher stated, “The risks to industry and to the financial sector from climate change are becoming well documented,” and continued, “Many, many policy changes are likely around the world in the years to come. And those policies will affect industries,” including those producing and using gold.

He concluded, “Energy use in the precious metals industry — both extraction and refining — although a small part of the total global economy, and producing high value products, is undeniably intensive. But that means that there are tremendous gains to be had from moving to cheaper, cleaner energy sources and more efficient production techniques. The best, most profitable companies are embracing these changes already.” 

For example, GoldCorp.’s Borden Lake Mine near Chapleau, Ontario, Canada, is slated to become the world’s first all-electric underground mine, replacing diesel-fueled equipment that require extensive ventilation. Meanwhile, a gold mine in Burkina Faso is installing a solar power plant to supply a portion of its electrical power requirements, while a Canadian mine restuctured its ventillation system to take advantage of natural heating and cooling avenues, reducing its ventillation energy consumption by about 10 percent.

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