Climate Change Risks and Opportunities

Goldcorp supports Canada’s ratification of the Paris Agreement, which brings all countries together to undertake efforts to combat climate change and adapt to its effects. As a member of the Mining Association of Canada, we are prioritizing innovative policies and activities to address climate change and are promoting efficient and responsible energy use in our projects and operations.

We believe we can make a positive contribution to the achievement of the Paris Agreement’s goals, and are proactively participating in industry and government outreach activities related to energy and climate change policy. Some of the public policy campaigns we participated in during 2016 include: the Ontario Cap and Trade framework, the Canadian government’s Price on Carbon policy and Metal Mining Effluent review, the Canadian Environmental Assessment Act review, Natural Resources Canada’s Energy, Innovation and Mining policy consultation, and Ontario’s Long-Term Energy Plan.

Related to climate change, there are regulatory and physical risks and opportunities.

Regulatory Risks and Opportunities

Governments have introduced climate change-related legislation in every jurisdiction in which we operate, including Québec, Ontario, Mexico and Argentina. We expect our costs to increase, with new requirements to pay for carbon emissions, whether in the form of a tax, a cap-and-trade system, a fine, or the purchase of renewable energy credits. Typically there is a phase-in period for these costs, and we expect that some of the costs can be offset by increasing our energy efficiency and technological innovation. However, as the regulations phase in, we expect costs to increase at some operations.

This kind of change often results in technological advances and cultural changes, and we are ready for opportunities to advance innovation, improve management practices, and form new partnerships between vendors, stakeholders, customers, and research and development entities.

Physical Risks and Opportunities

Climate change has the potential to physically impact our operations. Several potential risks and opportunities are outlined in the table below:

Risk Description Potential opportunities

Sea level rise

Rise in global waterbodies as a result of changes in climate.

Our operations are not directly threatened by sea level rise. All our operations are located well inland, at elevations of between 100 and 3,000 metres above sea level.

Extreme weather events

Extreme events (increased frequency or intensity of hurricanes, increased snow pack, prolonged drought, flooding events, forest fires, etc.) have the potential to disrupt mining operations.

Improvement and advancement of our water balance and modelling tools. Improved predictive modelling and analysis of potential operational impacts. Improved water stewardship.

Resource shortages

Mining and processing depend on the regular supply of consumables (such as diesel, tires, reagents, etc.) to operate efficiently. In the event that the effects of climate change cause prolonged disruption to the delivery of essential commodities, then our production efficiency is likely to be reduced.

Active engagement with our suppliers to understand forecasted resource shortages which could impact the supply of products required for our mining activities. Improved planning and increased efficiency of material usage.

Water availability

Various climate change models show potential increases or decreases in precipitation at the macro level.

Reduction in water consumption. Innovation studies around improved tailings management systems to potentially result in lower water consumption intensities.

Energy Consumption

Energy use at our operations is primarily in the form of diesel fuel, propane gas, natural gas and electricity. Diesel is consumed in the transportation of ore and waste rock, for on-site backup electricity generation, for light plants, and occasionally for heating. Electricity is purchased from utilities, or in some cases from private providers, and consumed for both mining and milling operations. The most significant uses of energy are the transportation of ore, the ventilating and heating underground work environments, and comminution (crushing and reducing rock to small fragments).

Our total energy consumption decreased by approximately 4% from 2015 to 2016.

Direct and Indirect Energy Consumption (MWhe)1, 2, 3

Fuel Type, Direct Energy 2016 2015 2014 2013 2012 2011

Diesel (MWhe)

2,130,200

2,327,000

2,242,800

2,121,200

1,931,000

1,708,000

Bio-diesel (MWhe)

0

800

13,000

7,100

0

0

Gasoline (MWhe)

24,900

32,100

34,100

38,800

35,200

29,400

Propane (MWhe)

101,800

121,800

114,900

119,600

119,400

134,200

Natural gas (MWhe)

120,300

129,300

168,600

145,700

62,600

55,800

Renewables (MWhe)

400

400

400

800

600

0

Explosives (MWhe)

72,300

96,900

232,500

209,200

62,500

57,200

Energy Intensity

The energy intensity of each of our mines depends on the type of mine, its ore characteristics, process throughput, size, and type of processing. Each mine’s intensity varies based on depth, haul distance, rate of production, mine development and waste rock stripping ratios.

Energy intensity on a tonne-moved basis is shown in the graph below, from 2011 through 2016. Energy intensity from 2015 to 2016 increased by approximately 25%, primarily due to a significant decrease in tonnes moved (the normalization factor) combined with maturing (deepening) mines. As our mines mature, production zones tend to move deeper and further away from material handling and processing infrastructure. This typically leads to increased energy intensity; however, our energy strategy helped to provide some mitigation for this.

Indicator 2016 2015 2014 2013 2012 2011

Total material moved (ore + waste rock) [t [metric]]

212,603,099

277,727,570

264,123,721

255,131,843

244,973,167

232,062,643

Total direct and indirect energy consumption (from GRI.1.9.1.27 and EN4) [kWh]

4,830,199,425

5,066,841,626

4,910,241,827

4,674,037,337

4,157,068,078

3,662,462,569

Energy intensity (total energy/ore + waste tons) [kWh/t [metric]]

22.7

18.2

16.9

16.4

16.2

15.5

Energy Savings and Initiatives

Energy is essential for operating our mines. Digging, loading and transporting ore, ventilating our mines, and the mineral extraction process all consume significant energy. The efficient use of energy, and access to secure and reliable energy sources, are key to our long-term success. We also recognize responsible energy management as a key focus in addressing climate change issues.

Our five-year Energy Strategy established 2011 as the “base year”. Then, beginning in 2012, we challenged ourselves to significantly improve our energy management and incorporate energy management as a component of operational decisions. One of our goals for the five-year period was to create a challenging and focused initiative that would cultivate a culture and standard that considers climate change as an integral part of doing business.

Our Energy Strategy was launched in 2012 with the following five-year targets:

Target Measure Progress

Energy management plan

All sites complete an energy management plan

100% achieved

Increase energy efficiency by 15%

Implement energy savings projects whose cumulative and recurring five-year savings equal 550,000 MWh4 (15% of 2011’s consumption)

84% achieved: energy savings of 460,000 MWh

Reduce emissions by 20%

Reduce annual GHG emissions by 240,000 tonnes of CO2e

73% achieved: reduced CO2e by 175,000 tonnes in 2016

Source 5% from renewables

Source 180,000 MWh from renewables (5% of 2011’s energy consumption)

83% achieved: 150,000 MWh sourced from renewables

These targets were internal and were designed to create a culture that considers energy management and climate change aspects as a key part of the business. We successfully implemented this change and will now carry forward energy management as part of our standard practices and seek continuous improvement in this area.

Some successful energy savings initiatives in 2016 include:

Red Lake Gold Mines Compressed Air Optimization

Compressed air is essential to power many of the tools used in underground mining, including jacklegs, bolters and diamond drills. When compressed air leaks, it causes higher energy consumption and increases the equipment’s maintenance needs. Near the end of 2015, a thorough review of the site’s underground compressed air network was completed, and a considerable number of leaks were identified and targeted for repair. Repairing these leaks has resulted in measurable cost savings and a power saving of 11,000 MWh in 2016.

Éléonore Ventilation on Demand

Éléonore implemented an advanced ventilation-on-demand technology for the underground mine, which has reduced its annual energy consumption by 23,000 MWh.

Éléonore Fuel Savings

Modifications to the road for hauling tailings decreased the distance travelled and allowed trucks to increase the daily tonnes moved, ultimately resulting in a 30% fuel savings, or nearly 500,000 litres of diesel per year.

Greenhouse Gas Emissions

GHG reporting is based on the GHG Protocol’s A Corporate Accounting and Reporting Standard and is divided into three categories, depending on the source:

  • Scope 1 (direct) GHGs are derived from sources that are owned or controlled by the reporting organization. Our principal source of Scope 1 emissions is fuel consumption for power generation and material movement.
  • Scope 2 (indirect) GHGs are generated at sources owned or controlled by another organization. Our principal source of Scope 2 emissions is purchased electricity.
  • Scope 3 (other indirect) GHGs include emissions from air transport of mine employees.

At our operations, Scope 1 and Scope 2 GHGs have been going down since 2013, and decreased by approximately 15% from 2015 to 2016. A major cause of the decrease in 2016 was that significantly fewer tonnes of ore were moved. We are not currently involved in any carbon credit or trading system.

Scope 3 GHGs in 2016 were 7,000 tonnes as compared to 4,735 tonnes in 2015. They represent air transport of employees to and from mine sites.5

GHG Intensity

GHG intensity” represents the GHGs produced for each tonne of ore processed and moved. We track GHG intensity across the company to measure our progress as we experience growth or divestment. In 2016, our GHG intensity was similar to the 2011 base year, as shown in the table below.

As our mines mature, production zones tend to move deeper and further from material handling and processing infrastructure. This typically leads to increased emissions intensity, but our energy strategy helps to mitigate this increase.

Indicator 2016 2015 2014 2013 2012 2011

GHGs, total [t GHG [metric]]

1,143,616

1,341,581

1,357,769

1,404,215

1,272,932

1,208,544

Total material moved (ore + waste rock) [kt]

212,603

277,728

264,124

255,132

244,973

232,063

Intensity (tonnes/ktonne)

5.4

4.8

5.1

5.5

5.2

5.2

Greenhouse Gas Emissions Savings

The following projects and initiatives resulted in GHG savings:

  • Musselwhite – management of base load electrical consumption and peak demand allowed the mine to operate without diesel power generation in 2016, saving 20,000 tonnes of CO2e.
  • Marlin – 100% of power consumption was sourced from renewable biomass, saving approximately 40,000 tonnes of CO2e compared to purchasing power from the public grid.
  • Peñasquito – 96% of power was sourced from an efficient, combined-cycle natural gas power plant, saving approximately 90,000 tonnes of CO2e.
  • Los Filos – 96% of power was sourced from the combined-cycle natural gas power plant, saving approximately 9,000 tonnes of CO2e.
  • Red Lake – repairing leaks in the compressed-air system saved approximately 450 tonnes of CO2e.
  • Éléonore – ventilation-on-demand in the underground mine saved approximately 4,000 tonnes of CO2e. Also, improvements to the alignment of the haul road used for tailings resulted in a shorter haulage distance which consumes less fuel and therefore equates to GHG savings of approximately 14,000 tonnes of CO2e.

For 2016, approximately 175,000 tonnes of CO2e was saved, or 14% of the 2011 base-year GHG emissions.

At the end of 2015, we decided to advance the study of a wind farm near the Cerro Negro project to the feasibility phase, based on favourable results from the pre-feasibility study. The study commenced in 2016 and will continue through 2017. The results will determine if the project will move to the execution phase.

NOx, SOx and Other Significant Air Emissions

The table below shows the emissions of significant air pollutants. Measurements were derived from multiple methodologies including direct measurement, calculations based on site-specific data, and calculation based on published emissions factors and estimation.

Air Emissions7

2016 2015 2014 2013

Carbon monoxide (t)

1,830

1,870

2,180

1,700

Oxides of nitrogen (t)

2,440

1,830

1,880

1,050

Sulphur dioxide (t)

40

20

20

10

Particulate matter (t)8

740

1,160

740

610