Gold is often portrayed as an irresponsible part of investments, and the mining industry is often seen as a destructive process. Admittedly, there have been serious missteps in the gold mining industry, but that’s in the past. However, things are definitely progressing in the right direction.
Over the years, the risks and negative impacts of large-scale industrial gold mining have decreased significantly. In addition, many of the dangers associated with gold mining today are being mitigated. Social impact bonds are being used to fund improvements, small-scale projects are providing work for locals in rural areas, and safer working conditions are reducing the risk of injury and death by more than 60%. Gold mining is not only safer for miners; it is also safer for the communities where the mines are operating. Now, we understand if you’re a little skeptical about this. To help you see the potential in mining, here are three reasons for fresh thinking around gold’s ESG credentials.
Stronger Industry Standards
In the past, mining companies were not as environmentally responsible or socially conscious as they are today. However, the mining industry has changed, and now more than 51 standards have been created for mining companies, each covering all relevant environmental, social, and governance fields. These standards are mandatory for members of the World Gold Council; other companies are expected to follow them as well.
To meet the expectations of society, modern mining companies have to be transparent and credible with their performance. To achieve that, they must disclose their performance in a way that has been reviewed by a third party. This system is more effective than other systems, and it will be easy for the market to have confidence in the materials produced.
Positive Impact on Local Communities
Sustainable mining with a global footprint can significantly contribute to uplifting the poorest communities in the world. It’s a common misperception that communities don’t want mining in their backyards. The reality is that mining has become more sustainable, with more companies adopting responsible practices, bringing benefits to the communities they impact. A positive change in attitude has made remote communities open to new mining companies.
People in communities are often the ones to grant companies a “social license to operate”, which allows companies to stay in business and production. Companies know this all too well, which keeps them focused on ensuring they behave as they should. Communities can withdraw a company’s license to operate if they do not believe the company is following the rules. Mining companies are often very community-oriented, providing jobs, training, and contracts, paying taxes and providing social investment. They bring great prosperity and wealth to regions where mines are located. Many countries have experienced great growth in their economies as a result of flourishing mining industries.
Lower Lifecycle Carbon Footprint
Investing in gold may seem counterintuitive to some, but gold has a positive social impact and the ability to create a positive impact at scale with responsible mining practices. Compared with many other sectors of the economy, the gold industry has a massive potential to decarbonize its business, advancing at a rapid pace and approaching the necessary scale and cost efficiency for rapid uptake. Electric fleets, renewable energy sources, automated equipment, precision mining, and artificial intelligence are all being integrated into gold operations in different ways across the industry. Coal-powered plants are being replaced by solar panels and windmills. Automated equipment will be able to do certain processes more efficiently. AI will make these processes more precise and less costly. A lot of people within the industry think that carbon-neutral mining is only a generation away.
New gold production technologies will enable resource savings across the industry, including land and water and other inputs. Downstream, these technologies will also help minimize waste. For instance, once a mine is closed, the gold extracted by new processes is 100% recyclable, though it takes more energy to recycle than when gold is left in the ground. Mining is becoming much safer as well. Many of the innovations will not only reduce carbon emissions, but also enable reductions in the use of resources – including land and water, significantly reducing waste, and making mining a lot safer. Mining in the future will have a much smaller footprint. Beyond the mine site, the CO2 emissions associated with the onward processing of gold are tiny, especially relative to other extractive industries which produce products that are burned or heavily processed downstream. And gold is 100% recyclable.
We hope this article proves to be useful when it comes to helping you see the potential of the gold industry. As you can see, there are a multitude of reasons to remain optimistic about it. Be sure to keep everything you learned here in mind so that you can make the best and most informed investment decisions possible.
If you want to learn more about the Canadian gold sector, then you’ve come to the right place. Newfoundland Gold is an alliance of companies focused on the advancement of mineral exploration and mining projects in Canada’s Newfoundland. For more information on this, visit our website today!