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To mitigate the potentially catastrophic impacts of climate change, the global economy needs to reduce its CO2 net zero emissions by 2050, in accordance with the Paris Agreement.
This requires all industries to rapidly reduce their dependence on energy derived from fossil fuels. Climate-conscious investment groups have been particularly vocal in calling for more clarity from all sectors regarding their detailed plans to contribute to emissions reductions and climate stability.
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The World Gold Council has previously identified that 99% of the greenhouse gas (GHG) emissions from the gold sector are related to gold mining operations.
We estimate that around 75% of these emissions are associated with the generation and consumption of electricity. Therefore, the ability of the gold mining sector to reduce its emissions in accordance with the Paris targets will largely depend on its ability to change the way it sources and uses energy and fuels.
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In our previous research, we outlined a potentially affordable and profitable pathway for gold mining to meet climate goals. To achieve a climate target that limits global warming to ‘well below 20C ‘will require industry to reduce GHG emissions by 80% by 2050.
If a ‘1.50Target C ‘is adopted, likely to require a 92% GHG reduction by (or shortly after) 2040.
In our new analysis, developed in collaboration with Wood Mackenzie energy and mining specialists, we have tried to examine in more detail a key part of that path, the decarbonization of energy, and how that could enable the mining sector to gold reduce your emissions. at a sufficient scale and speed.
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Recognizing that action is needed over the next decade to make net zero carbon targets achievable, the report assesses the impacts of reducing energy emissions from gold mining against emission reduction targets of 27% and 46% by 2030, which would put the sector roughly on schedule. to meet consistent targets with less than 20Grade C and 1.50C, respectively, by 2050.
The greening of the network
Our analysis shows the significant impact local power grids have on overall emissions from gold mining. Of the 158 gold mines we examined, electricity from the grid accounted for 57% of their annual energy use.
The substantive role of coal-fired power in grids in some mining regions results in a high level of intensity of emissions that is transferred to connected mines. But many grids are rapidly switching to greener energy sources, and the mines connected to them will benefit.
The average carbon intensity of grid power for the mines we examined is expected to drop by 20% over the next decade.
Our analysis of recent announcements by gold mining companies to switch to lower-carbon energy sources indicates that more and more are planning to use renewables in a substantial way (often as part of a hybrid power supply deal), with the photovoltaic solar energy as the currently preferred renewable energy. source.
These initiatives will likely reduce mine site energy emissions by an average of 20% and, in some cases, by more than 50%. Its overall impact on the sector’s energy emissions is a reduction of around 6%.
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However, if these early-stage actions by those at the forefront of the energy transition are more widely adopted, we estimate that it would result in an additional average drop in energy emissions of 9%, allowing emissions from the gold mining approach 1.50C climate objective.
The changing ‘asset mix’
Several high-emission mines in our sample are expected to close or experience a substantial reduction in production levels over the next decade. The consequent emissions impacts are significant, resulting in a 19% reduction in the intensity of emissions in our sample.
Of course, the working life of some of these mines can be extended if reserves permit and the prospects for the gold price make them potentially economical. However, we expect the long-term preference to be for the development of lower emission intensity mines, supporting the ongoing reduction of sectoral emissions.
Renewables and climate targets
Our analysis of gold mining companies ‘initial steps to decarbonize energy, and the implications if these actions double, along with current trends in the energy landscape, suggest an industry alignment with the’ far below 20C ‘climate goal is very feasible.
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Achieve alignment with 1.5ORGoal C will likely require more action, including further improvements in energy and operational efficiency, but there is considerable flexibility in how different gold mines could seek to reduce carbon-intensive energy sources.
For example, our analysis suggests that increased use of renewable energy replaces the following:
- 55% or more of energy generated directly from fossil fuels, or
- 30% or more of the grid supply, or
- 20% of the network and direct supply of fossil fuels should allow the gold industry to align with the 1.50C climate goal and a zero-carbon future.
Report courtesy of the World Gold Council
