Environment

Climate Energy and GHG Emissions

Why are climate, energy, and GHG emissions important?

Climate change is one of the biggest challenges currently facing the global community. Mining is an energy-intensive industry. Mines consume energy through extraction, processing, and transportation of products. Energy use, particularly through fuel combustion and electricity consumption, causes direct and indirect GHG emissions, which contribute to climate change. COI expectations around climate action in the mining industry include reducing the carbon footprint and responding to potential climate-related risks. For Pan American Silver, reducing emissions and energy use provides us with cost savings and environmental benefits beyond our operating boundaries, and contributes to the global response to climate change.

Our Approach

We formed a Climate Change Committee with senior management in 2019 to oversee implementation of the TCFD recommendations and our commitments to the World Economic Forum’s CEO Climate Leaders Alliance.  We continually search for ways to improve energy efficiency at our operations and development projects.

Programs and Initiatives

  • Our Timmins operations have a dedicated Energy Manager who leads energy efficiency and GHG emission reduction programs at those operations and maintains our participation in provincial energy incentive programs.
  • We completed the installation of a new mine shaft at Bell Creek mine, which reduces our energy use compared to business as usual.
  • We implemented projects to install LED lighting at La Colorada, improve diesel power plant efficiency at Manantial Espejo, and optimize the use of ventilation fans at San Vicente, which reduced energy use compared to business as usual.

Monitoring and Evaluation

  • TSM Energy and Greenhouse Gas Emissions Protocol – Sites have self-assessed against the protocol and are in the process of implementing action plans.
  • Energy and fuel monitoring – We monitor energy and fuel use at all operations and estimate our greenhouse gas emissions on an annual basis. Our Mexican and Peruvian operations report independently calculated greenhouse gas inventories to national authorities.

Our Performance

Energy use

We use energy to mine, move, and process ore and waste rock as well as for mine ventilation and dewatering. The type and quantity of emissions from our operations are determined by the energy source and the nature of the way we mine and process ores that is largely dependent on the mineralogy of the deposits. The energy used at our sites comes principally from diesel fuel for powering heavy equipment and in some limited cases electrical power generation or electricity directly from regional or national power supply grids. The grid energy we use is becoming cleaner and more efficient each year since the jurisdictions where we operate all have been increasing renewable energy generation. Grid electricity has a lower carbon footprint than onsite electricity generation.

GHG Emissions

Greenhouse gas emission trends for our operations generally track our energy use. However, in periods such as 2017-2018, when we connected the Dolores mine to the national grid and supplemented the La Colorada electrical supply connection, we experienced a decrease in total GHG emissions as direct (Scope 1) emissions were transferred to cleaner grid electricity (Scope 2).  Our 2019 Scope 1 and 2 GHG emissions increased as expected due to the deepening and spatially distancing of our silver segment mines and the addition of the new gold segment operations from Tahoe.

GHG Emissions (Tonnes CO2eq)2019 Total2019 Silver Segment320182017
Scope 1: Direct Emissions1308,504171,328164,645179,842
Scope 2: Indirect Emissions (Electricity)2142,099126,739123,880113,971
Total Scope 1 and 2450,603298,067288,525293,813
Scope 3: Indirect Emissions (Value Chain)668,098Not EstimatedNot EstimatedNot Estimated

Notes:
(1) Pan American Silver used National Inventory Report Canada 2019 to calculate Direct (Scope 1) GHG emissions. The global warming potential (GWP) used for calculations is based on the information provided by the Government of Canada. Gases included in this calculation are CO2, CH4 and N2O.
(2) The GHG Protocol – purchased IEA tool 2019 for energy indirect (Scope 2) GHG emissions. Gases included in this calculation are CO2, CH4 and N2o.
(3) Silver segment consists of the six silver mines in existence prior to Pan American Silver’s acquisition of Tahoe.

This year we completed our first estimate of our Value Chain (Scope 3) emissions in accordance with the Greenhouse Gas Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard, using the Quantis Scope 3 Evaluator tool for all 15 categories except downstream processing of metal concentrates, which we found to be underestimated by the Evaluator. Instead, we obtained direct emissions data from our partner smelters in Peru and Mexico that process zinc and lead concentrates from our mines. These data allowed us to calculate more accurate downstream emissions for processing of our metal concentrates sold (124,601 tonnes CO2eq for 2019), which was used to complete the Scope 3 estimate.

Scope 1, 2, and 3 Greenhouse Gas Emissions

The summary totals of our 2019 Scope 1, 2 and 3 emissions are shown in the following figure.

The breakdown of our 2019 Scope 3 emissions (excluding metal concentrates) is shown in the following table.

As part of the climate action strategy led by our internal Climate Change committee, we will continue to improve on our emissions reporting and work with our partners on minimizing carbon emissions in our supply chain and downstream processing, product distribution, and product use.

GHG Emissions Intensity

The more ore we process at our sites, the more energy we use. Also, as our mines become deeper and spatially more distant, more energy is required for mine ventilation and dewatering, and more fuel is required to haul ore and waste rock over greater vertical and horizontal distances. We track the intensity of our GHG emissions (tonnes of Scope 1, 2 and 3 CO2 equivalent per tonne of ore processed) to help us understand the energy efficiencies of our processes and the effects of using cleaner grid energy.

Notes:
(1) GHG Emissions intensity was calculated using the total Scope 1 and 2 GHG emissions divided by Tonnes of ore milled.

The GHG emission intensity of our silver segment operations increased by 3.5% in 2019 to 0.029 tonnes CO2eq/tonne of ore processed. The main driver of the increase was Manantial Espejo operation, where fuel use increased for mine development and for transport logistics to and from the distant COSE and Joaquin satellite deposits. Other operations including Dolores, La Colorada, and San Vicente saw increased emissions intensity due to the deepening and distancing of those mines. The addition of the gold segment operations in Canada and Peru generated a lower company-wide GHG emissions intensity of 0.013 tonnes CO2eq/tonne ore processed, as the La Arena and Shahuindo operations are low energy intensity run-of-mine ore heap leaching operations with relatively short haulage distances.

Next Steps

  • Develop and publish a CEO Climate Statement
  • Include a full climate risk disclosure in accordance with the Task Force on Climate-related Financial Disclosure (TCFD) recommendations in our 2021 reporting
  • Develop an Energy and GHG Emissions Corporate Environmental Standard

Click here to see additional energy and emissions performance data:

  • GRI 302-1 Energy consumption within the organization 
  • GRI 305-1 Direct greenhouse gas emissions (Scope 1)
  • GRI 305-2 Indirect greenhouse gas emissions (Scope 2)
  • GRI 305-3 Value Chain greenhouse gas emissions (Scope 3

OVERVIEW

Material Topic: Climate, Energy, and Air Emissions.

Sup-topic:

  • Climate change
  • GHG emissions management
  • Energy use

Definition: Minimizing our energy consumption and  greenhouse gas emissions.

Feedback from COIs: Industry associations, regulators, and NGOs are prioritizing improved disclosure on and reductions of GHG emissions.
Investors are interested in disclosures on climate resilience and climate-related risk.

How we’re responding: We have expanded our reporting to include value chain (Scope 3) GHG  emissions. 
We completed an analysis of operational resilience and preparedness of our mines under different climate scenarios.

Potential risks and impacts

  • Climate change effects on local communities and broader society
  • Physical risks of climate change, such as extreme weather events and water availability, and impacts on ecosystems and biodiversity
  • Potential new carbon regulations and rising energy costs in the transition to a low carbon economy

Related SDGs

gri indicators

302-1 Energy consumption within the organization.

305-1/2/3 Direct (Scope 1) GHG emissions, Energy indirect (Scope 2) GHG emissions, Other indirect (Scope 3) GHG emissions.

305-4 GHG Intensity.