After two years of debate and consultations, the gold sector has come up with a set of global principles that set out clear expectations for investors and downstream users of what constitutes responsible mining.
Led by the members of the World Gold Council (WGC), an industry body that includes the world’s top producers of the metal, the Responsible Gold Mining Principles (RGMPs) are the result of two years of discussions involving various stakeholders, such as governments, civil organizations, supply chain participants and investors.
Prior to their development, there was no single framework that companies could use to guarantee their practices and output fell under the category of responsible mining.
“While there has been extensive work done over the last few decades by gold producers to support responsible mining, these directives tie them together, making it really simple to understand what exactly companies mean by ‘responsible gold’,” Terry Heymann, chief financial officer at the WGC told MINING.COM.
The Principles cover three main aspects of gold production widely recognized — environment, social and governance (ESG).
They incorporate feedback from more than 200 organizations and individuals over two rounds of consultation and are designed to support the efficient operation of the gold market.
Under each of the categories, there are a series of elements to consider. For instance, environmental issues include stewardship, water and land use, biodiversity, mine closure, energy and climate change.
Social aspects include safety and health, human and labour rights, conflict and community engagement.
Governance relates mostly to how companies conduct their businesses, understand their impacts and supervise their supply chain.
“When coupled with good governance, responsible gold mining delivers benefits for host countries and local communities,” Heymann said. “It contributes to socio-economic development through increasing prosperity, providing jobs and supply chain opportunities, and raising technical standards through innovation and building skills.”
Through partnerships with governments and other actors, it also enables investment in infrastructure and improvements in public services, he noted.
Companies are expected to apply the RGMPs in a three-year timeframe. In the first and second years, implementing firms will be required to report on their progress towards achieving conformance.
Although some firms may be able to comply with the new rules more quickly, all implementing companies’ internal systems and process should conform with the principles by the third year.
Miners will be required to publish what they’ve done in the different areas, just as they do with their financial results. Prior to that, they would have to obtain external assurance from a third party, independent assurance provider. This is expected to provide further confidence to gold buyers that metals they acquire are responsibly mined and sourced.
WGC’s include industry leaders such as Newmont Goldcorp, Barrick Gold and AngloGold Ashanti, representing two-fifths of global gold production, estimated around 3,300 tonnes a year and worth roughly $15 billion at current prices.
Small scale, artisanal miners don’t belong to the WGC, though the body recognizes their significance, as they have share of global production at around 15%.
About 95% of member companies have so far signed up to the principles, with the remainder expected to do so soon.