One of the world’s biggest gold refineries will look to stop sourcing metal from mines that fail to meet standards on carbon emissions.
MKS PAMP plans to curb emissions that come from its supply chain by 27.5% before the end of the decade, the company said in a statement Wednesday. As a result the Geneva-based firm may have to refuse gold from mines that create too much carbon dioxide.
Extraction of the metal forms the bulk of gold’s carbon footprint. Miners emitted almost a ton of carbon dioxide per ounce mined in 2019, according to S&P Global. The industry as a whole accounts for about 0.2% of the world’s emissions, Wood Mackenzie wrote in a report.
The target is approved by the Science-Based Targets Initiative, a collaboration between non-profit CDP and the United Nations. MKS PAMP is the first precious metals refinery to have one, it said in the statement.
“We may refuse to deal with some gold mines because we believe they are not doing the right thing,” CEO Marwan Shakarchi said in an interview. “We took a conscious decision on this. We will make less money.”
MKS PAMP is one of four major Swiss refineries which process two-thirds of the world’s gold. Though the family-run business is small compared to the miners and bullion banks that dominate the industry, it acts as a transit point between the world’s key markets. It also has to keep illicit gold out of the supply chain.
That task will become more difficult following Russia’s invasion of Ukraine. The nation is the second biggest gold miner globally, but its bullion has become taboo in the West. There are concerns the metal could leak into the wider supply chain through buyers in India and China, which may look to secure it at a discount.
MKS PAMP stopped accepting Russian gold after the outbreak of the war, the company said in a recent statement. Shakarchi expects the firms normal compliance measures to keep out material.
“I can put my hand on the fire and say neither directly or indirectly are we getting gold from Russia,” Shakarchi said. “If customer A starts sending us more metal we will ask the question twice.”