Russian gold giant Polyus pivots to hydropower

Russia's largest gold mining company Polyus has announced it will power its two biggest mines with hydropower in a major step towards emissions reduction by private businesses in the country's vast industrial sector.

Polyus signed an agreement with hydropower producer RusHydro to supply its Olimpiada and Blagodatnoye mines with energy, which currently comes from coal-fuelled power plants. The agreement will see 90% of Polyus' gold production being powered by renewables, thus reducing its overall emissions by one-third.

Oil and gas producers, mining and metal smelting dominate the Russian economy, helping to make it the fourth-largest greenhouse gas emitter in the world.

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The economic significance of Russia's industrial sector allows it a certain level of protection by the Kremlin, but climate change is becoming an increasingly important topic in the country which is witnessing rapid temperature rise in northern Siberia and the Arctic, melting permafrost, floods and annual forest fires.

In a statement, Polyus CEO Pavel Grachev said that the hydropower agreement "represents a landmark event for our company. Climate change is a global challenge, and it is important that as a responsible business we support the decarbonisation of the global economy.”

Polyus is the fourth-largest producer of gold in the world and the company says that the RusHydro deal allows for around 1bn kWh of electricity supply for the two mines this year. The news comes on the heels of a five-year deal announced last October to supply renewable energy to Polyus' Natalka mine in the country's far east.

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Russia is the seventh-largest producer of hydropower in the world with many Soviet-era dams still in operation. Around 20% of the country's energy comes from hydropower.

Nonetheless, studies suggest that Russia is presently using just 20% of its hydropower potential with usage limited by infrastructure issues, poor grid network and the country's sheer size, not to mention the historical dominance of coal and coal-fired power plants and the protection that the coal sector receives from Moscow.

While President Vladimir Putin has given his enthusiastic endorsement to the Paris Agreement, with the understanding that a pledge to ensure 2030 emissions are 33 per cent lower than 1990 levels requires no additional actions given the huge drop in emissions following the collapse of the USSR in 1991.

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