Gold miner Newmont to spend $500 million over 5 years on climate initiatives

(Reuters) -Top gold producer Newmont Corp on Tuesday said it would spend $500 million over five years to meet climate change targets as the miner accelerates efforts to reduce greenhouse gas emissions at its operations.

FILE PHOTO: Liquid gold is poured to form gold dore bars at Newmont Mining's Carlin gold mine operation near Elko, Nevada May 21, 2014. The dore bars contain approximately 90 percent gold, 8 percent silver and 2 percent trace material. REUTERS/Rick Wilking /File Photo

Investors are putting pressure on gold miners, whose high greenhouse gas emissions have been less scrutinized, to report transparently and take concrete steps to curb them after a rally in prices this year drew closer attention to the sector’s footprint.

Newmont last month committed to a 30% reduction in carbon emissions by 2030, and net zero emissions by 2050.

The company said it is studying solar and wind installations at several mines, including Peñasquito in Mexico and Ahafo in Ghana, and ways to boost efficiencies across its operations.

“It’s about putting money where our mouth is,” Chief Executive Tom Palmer said on a call, adding the spending represents a starting point and would be a mix of development and operating capital.

Newmont earlier forecast higher production of the precious metal next year at lower costs.

Prices for safe haven gold have surged nearly 23% this year as global economies reeled under lockdowns designed to curb the spread of the coronavirus outbreak.

Newmont forecast 2021 gold output of 6.5 million ounces, up from the 6 million ounces it expects to report this year.

While output was hit in some regions this year due to infections and governmental restrictions, Newmont said its forecast assumes operations will continue without major coronavirus-related interruptions next year and beyond.

Output through 2023 is forecast between 6.2 million and 6.7 million ounces, rising to as much as 7 million ounces through 2025. Spending is forecast to increase sharply to $1.8 billion driven by expansions in Ghana and Peru.

All-in sustaining cost, a closely watched industry benchmark, is expected to be around $970 per ounce of gold mined next year, below this year’s forecast of $1,015 per ounce. The cost is expected to further decrease through 2025.

Reporting by Rithika Krishna; additional reporting by Jeff Lewis in Toronto; Editing by Amy Caren Daniel and Marguerita Choy