How has Newmont’s joint venture with Barrick to establish Nevada Gold Mines (NGM) progressed?
Newmont has been operating in Nevada for over 60 years. We developed the technology to be able to release gold from the very fine, low-grade oxide ore in Nevada 60 years ago, which opened up the region. Then Nevada moved through processing of oxide ore to double refractory ore which needs more complex facilities to release the metal, such as roasters.
Roll the clock forward to 2019, both Newmont and Barrick had been operating in Nevada for a long period of time, with maturing operations that sat alongside each other. The reality was that production profiles were coming off and costs were going up as processing facilities that were built 30 years ago were constrained for the ore bodies being mined today. There were also some boundaries between ore bodies that were set up historically that were constraining both companies.
The opportunity that came with NGM was to combine processing facilities and deposits, which gives you many more options in terms of how you blend different ores together within the constraints of processing plants, particularly through the Carlin trend, out west at Turquoise Ridge and Twin Creeks, and also because a lot of ore from the Cortez mine gets sent through to Carlin. Through this optionality, operational life can be extended, costs can be reduced, and shareholders of both companies get the benefit.
NGM is the flagship example of how the gold industry can look for opportunities to consolidate within a region. The industry needs to consolidate, as mining at scale is required to fund the technology needed for decarbonization, and NGM presents a pathway for what that looks like.
Can you elaborate on Newmont’s decarbonization initiatives?
In 2020, Newmont led the gold industry to set targets for 2030 for the reduction of scope 1, 2 and 3 greenhouse gas emissions. We are committed to reducing our scope 1 and 2 emissions by more than 30%, and our scope 3 emissions by 30% by 2030, with the ultimate goal of being net zero by 2050. Newmont will have those targets signed off by the Science-Based Target Initiative (SBTI), and we are committing US$500 million over the next five years to support these targets.
In the decarbonization effort we are working on three main areas. First of all, continuous improvement; we have a program called Full Potential which has been in place for over eight years and delivered more than US$4 billion of value across our operations. It is predicated upon all 12 of Newmont’s managed operations having a set of improvement projects which include carbon reduction initiatives in their business plans. When you reduce carbon intensity you are almost certainly improving efficiencies. The second big area is renewable energy where we can use wind and solar to replace other forms of electricity generation around our business. This will be the key step change for Newmont as the decade progresses. The third area is how to introduce and support new technologies such as bringing in hydrogen or battery electric to replace diesel.
What role do you think gold will play in a transition economy?
Gold has been a store of value for millennia and will be a store of value for a long time to come. Then you have to look at what role gold plays in society and what role it can play in the decarbonization effort. Newmont’s purpose as a company is to create value and improve lives through responsible, sustainable mining. Looking at the locations in which we operate, gold mining by reputable companies plays a huge role in creating wealth and improving the lives of local communities. As the world’s largest gold mining company, we look to set a standard that others can follow, and this is why the ESG piece is so important.
When it comes to decarbonization, as gold operations are developed, you will see more copper-gold mines coming online, such as Yanacocha or our projects in British Columbia. Newmont will always remain a gold miner, but copper and gold produced together will go hand in hand as a very important metal for decarbonization, along with a very important metal in terms of a store of wealth that improves lives.