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New ESG mining standards to uphold clean, responsible production

Mercury and cyanide, which are still used at some gold mining operations, are harmful to people and the environment. Mining activities that meet environmental, social, and corporate governance (ESG) mining standards are more sustainable, resilient, and stable in the long run. This is the new future of mining, and operators will need to produce gold cleanly and responsibly to remain at the forefront of the industry.

The collapse of a tailings dam in the 2019 ​Córrego do Feijão incident near Brumadinho,​ Brazil, resulted in the death of over 250 people and discharged at least 12 million cubic metres of ore tailings into the surrounding region. It is a prime example of why strict regulations are necessary to ensure that mining operations are carried out in a safe and sustainable manner. 1 Similar incidents over the years have prompted governments around the world to take active measures in upgrading regulatory mechanisms and mining standards.

Many countries have implemented Mining Codes to ensure that mining companies carry out their operations safely. As gold prices rise, countries committed to developing their mining industries, such as Kazakhstan, have even set requirements that are ​on par with r​eporting standards found in Organisation for Economic Co-operation and Development (OECD) member jurisdictions such as Australia’s JORC Code, Canada’s CIM Guidelines, and Chile’s Certification Code.​

International organisations are also advocating for stronger enforcement of regulations so that mining companies adhere to higher standards of gold production. The International Council on Mining and Metals (ICMM) has promulgated ten Mining Principles for their member companies to align themselves with responsible initiatives and drive performance improvements at scale. The ICMM Mining Principles also involve requirements on the transparent disclosure of site-level validation of progress on ESG issues, and there are numerous points of connection between the ICMM Mining Principles and the United NationsSustainable Development Goals. 2 Gold mining companies should facilitate decisions that lead to responsible production, the elimination of health and safety risks, the protection of biodiversity, and the assurance of employees’ wellbeing. 3

An increased awareness in ESG risks from institutional investors have driven some mining companies to take action. 4 As 79% of millennials, who make up the largest proportion of the world population, show a predilection towards companies that display corporate social responsibility,​ gold mining companies are now held to higher standards and should be expected to take active steps for a sustainable future. 5

To keep up with the industry, gold mining companies will need to integrate clean, responsible, and sustainable practices in their operations. ​Clean Mining’s non-toxic gold recovery reagent is an environmentally-friendly solution that replaces cyanide and mercury in the gold extraction process with a gold recovery rate similar to that of cyanide. With Clean Mining’s de-watering process, dry tailings can be obtained, which delivers a higher degree of safety and sustainability in gold mining operations as it eliminates the need for a tailings dam.

There is an urgent call for companies to align themselves to the global vision and play their part in contributing back to the world. Investors are now actively looking out for gold mining operators that adhere to high ESG standards. While the enforcement of government regulations will undoubtedly lead to safer operations, it is the mining operators’ adherence to higher ESG standards that will allow them to generate greater yields, sustainability, resilience, and stability in the long run.

 

Clean Mining is part of the Clean Earth Technologies group.

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[1] For more on the breach of the Brumadinho tailing facility, see, Fabiano Thompson et al., “Severe Impacts of the Brumadinho Dam Failure (Minas Gerais, Brazil) on the Water Quality of the Paraopeba River,” ​Science of The Total Environment 705 (February 25, 2020): p. 135914, ​https://doi.org/10.1016/j.scitotenv.2019.135914.​

[2] “THE 17 GOALS | Department of Economic and Social Affairs,” United Nations (United Nations), https://sdgs.un.org/goals.

[3] “​Mining Principles,” ICMM Mining Principles (International Council on Mining & Metals, February 13, 2020), https://www.icmm.com/mining-principles.

[4] Fi​rms with a negative social impact were valued at US$0.90 less per share as compared to those deemed to be socially “neutral”. See, for more on investors’ valuations, ​Jean-Francois Bonnefon et al., “Do Investors Care About Corporate Externalities? Experimental Evidence,” SSRN, October 2, 2019, ​https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3458447.​

[5] See, for more on socially conscious millennials, Marguerita Cheng, “8 Characteristics Of Millennials That Support Sustainable Development Goals (SDGs),” Forbes (Forbes Magazine, June 19, 2019), https://www.forbes.com/sites/margueritacheng/2019/06/19/8-characteristics-of-millennials-that-support-sustainable-development-goals-sdgs/.

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