Russia’s biggest gold producer will power its two biggest mines using hydropower, in a major step towards efforts by private businesses to reduce emissions across the country’s vast industrial sector.

Polyus said on Thursday it had signed an agreement with hydropower producer RusHydro to supply its Olimpiada and Blagodatnoye mines, which are at present powered by coal-fuelled plants. It said the move would mean 90 per cent of its gold production would be powered by renewable energy and would reduce its company-wide greenhouse gas emissions by a third.

Russia’s economy is dominated by major oil and gas producers, mining companies and metal smelters, which help make it the world’s fourth-largest greenhouse gas emitter.

While the importance of the country’s industrial giants means they are politically protected by the Kremlin, rapid temperature rises in northern Siberia and the Russian Arctic, melting permafrost, flooding and annual forest fires are making climate change an increasingly important social issue in the country.

Pavel Grachev, Polyus’ chief executive, said in a statement 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, the world’s fourth-largest gold miner by production, said that the deal with RusHydro assumed that about 1bn kWh of energy would be supplied to the two mines this year. The decision follows a five-year deal announced in October to supply renewable energy to Polyus’ Natalka mine in Russia’s Far East.

Russia is the world’s seventh-largest producer of hydropower, with many dams that were built during the Soviet Union. Hydropower provides about 20 per cent of the country’s electricity.

However, studies suggest it is using just one-fifth of its hydropower potential, with usage limited by the country’s vast size, poor grid network and lack of investment, as well as the country’s historically large coal industry and use of coal-fired power plants.

President Vladimir Putin has enthusiastically endorsed the Paris agreement on limiting climate change, 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.