THE improvement in the gold price this year has attracted a broader class of investor to the mining companies that mine the metal.
However, this new-found popularity comes with fresh challenges as generalist investors want mining firms to adhere to strict environment, sustainability and governance (ESG) standards. “They don’t want to take a lot of risk, and a big part of the risk assessment is the ESG side of things,” Sean Boyd, CEO of Agnico Eagle Mines told Bloomberg News.
“Often it’s the first, and sometimes the only, discussion when we’re meeting with investors in Europe,” Tom Palmer, CEO of Newmont Mining told the newswire. At the World Economic Forum in Davos in January many times “… the only topic of discussion was around carbon intensity and the work that’s being done to reduce greenhouse-gas emissions,” he said.
Unlike other minerals such as copper or lithium, extracting gold does not come with a powerful decarbonisation argument. Often bought for its ‘store of value’ qualities, gold does not play a significant role in the manufacture of electric vehicle batteries. As a result, there was extra pressure on gold miners to present themselves as relevant in the ESG stakes.
“Gold’s an odd thing because most of it sits in vaults around the world gathering dust,” C2Gold CEO, Clive Johnson, told Bloomberg News. Johnson said, however, that gold miners had proven their worth during the Covid-19 pandemic insofar as they had supported their local mining communities.
