Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The World Gold Council (WGC) published Thursday the anticipated conflict-free standard, which aims to restrict production of the yellow precious metal in places where it already fuels or may trigger conflicts and human rights violations.
The guidelines were developed in collaboration with the council’s member companies, which include the world’s top gold producers.
According to the new set of rules and regulations, firms who apply the standard would be required to publicly disclose their conformance – either on their websites or in company reports.
Gold miners could use the standard as a benchmark to assess their operations and provide assurance that they did not cause, support or benefit unlawful armed conflict, or contribute to serious human rights abuses or breaches of international humanitarian law.
The council stated that norms provide further confidence that gold mining was an important source of social and economic development, if responsibly undertaken.
However, when there is armed conflict, even the best managed operation will need to take additional steps to ensure that both the gold it produces and its broader activities do not contribute to the conflict, said Terry Heymann, director of the council’s Responsible Gold division.
“Where a company can demonstrate that it is operating in an area assessed to be ‘conflict-affected or high-risk; in a way that does not support or benefit unlawful armed conflict, it should be encouraged to continue its operations,” he adds.
“It is essential that we combat any misuse of gold by militias and criminal networks. This has been the driving force behind the development of this standard,” Franco-Nevada (TSX, NYSE:FNV) chairperson and WGC board member responsible for leading the development of the standard, Pierre Lassonde, says.
Canadian Goldcorp (TSX:G) (NYSE:GG) and WGC chairperson Ian Telfer added that responsible gold mining was an important contributor to economic growth and social development in gold-producing countries.
The WGC standard is expected to complement and integrate with other industry-led initiatives, including the London Bullion Market Association’s Responsible Gold Guidance.
The standard can be downloaded here.
Image: Terry Heymann – Director, Responsible Gold – talking about the Conflict-Free Gold Standard.
