Page 4 - gmj145-Oct-Dec-mag-web_Neat

EDITORIAL

The green tide continues to turn but

fortunately, Australia’s gold industry

is prepared to ride the wave

by Dominic Piper

As reported extensively in the September issue of sister publication Paydirt, this year’s
Diggers & Dealers demonstrated the clear switch gold miners are making to improve
their green credentials.
Gold miners have been among the most active Australian companies in international
capital markets over the last five years as they sought finance for project construction
and ambitious acquisition sprees.
This gave them insight into financing trends and themes. They soon recognised the
move towards proactive climate policies and responded both overwhelmingly and
unanimously by putting their green credentials at the forefront of their investment cases.
Both Evolution Mining Ltd and Northern Star Resources Ltd highlighted their commitment
to net zero greenhouse gas emissions by 2050 at Diggers and even a junior developer such as Bellevue Gold Ltd dedicated
much of its presentation to promoting green strategies.
Companies are doing this because without clear, identifiable and reportable climate strategies, Australian miners will find
capital harder and more expensive to access.
It is a fact Federal Treasurer Josh Frydenberg finally admitted to in September.
The two Coalition partners are currently at odds over the Government’s road to net zero. While the Nationals leadership
remains resolutely against imposing a strict roadmap, the Liberals are beginning to acknowledge the danger of Australia
becoming an international climate pariah.
Speaking at a business event, Frydenberg said Australia’s reliance on international markets meant businesses – including
miners – needed to recognise the shifting trends.
“Importantly, considerations around climate risks are now being hard wired into how global financial institutions allocate
capital – at both a firm and country level – and how they engage with clients and companies. Increasingly, institutional
investors are themselves committing to the net zero goal, like BlackRock, Fidelity and Vanguard, three of the biggest fund
managers in the world,” he said. “Reduced access to these capital markets would increase borrowing costs impacting
everything from interest rates on home loans and small business loans, to the financial viability of large-scale infrastructure
projects.”
The gold miners’ move is part of a wider push in mining to promote the industry’s climate credentials. There are difficulties
for gold miners on the carbon front though.
Unlike BHP Ltd or Rio Tinto Ltd, they can’t make sweeping dramatic statements about carbon reduction by dropping coal and
oil and gas portfolios. Neither can they boast about the positive impact their production will have on a clean energy future as
the copper and nickel miners are currently doing.
Instead, they have to tackle carbon reduction head on and come up with real world solutions which reduce their carbon
footprint. In practical terms, this means reducing power requirements or switching the sources of energy production.
In WA, South African miner Gold Fields Ltd is leading the way, investing more than $100 million in renewable energy projects
on its Agnew, St Ives, Granny Smith and Gruyere mines.
It is also pursuing equipment innovation. In September, equipment manufacturer Sandvik announced it was partnering with
Gold Fields on a trial of battery-powered underground mining equipment. If the trial is successful, Gold Fields plans to roll out
electric equipment throughout its Australian underground operations.
From seemingly being on the wrong side of history, Australia’s gold miners have repositioned themselves to suit the needs of
international investors and the world as a whole. I hope the Australian Government can find a similar path.

dominic@paydirt.com.au @Paydirt_Media @paydirtmedia @PaydirtMediaAustralia

Page 4