- The Washington Times - Monday, August 14, 2006

SANTIAGO, Chile

Two years ago, U.S.- based Earthworks and Oxfam America undertook an inter-national “No Dirty Gold” campaign.

The organizers are harnessing the power of the marketplace. More than 80 percent of gold mined annually is used for jewelry, and the two groups have organized letter-writing protests and a media campaign asking jewelers not to buy gold from mines that harm the environment and nearby communities.

Eight leading jewelers, including Zales, Cartier, Helzberg and Tiffany & Co., representing $6.3 billion in U.S. jewelry sales, have done just that. The response is putting significant pressure on the gold mining industry to reform amid worries about the threat of long-term environmental damage to water, land and livelihoods.

The growing conflict comes as mining companies scramble to take advantage of the bullish outlook for gold, whose price has more than doubled since 1999 and now hovers near $610 an ounce, the highest in 25 years.

“The gold mining industry says it wants to make changes,” said Keith Slack, a coordinator for the No Dirty Gold campaign. “But we have not yet seen a broad, systemic change on the part of industry to really commit themselves to doing things differently, such as disclosing all relevant information on environmental impacts or involving communities in monitoring.”

“Most important, the industry does not yet respect the principle that where a community is opposed to a mining operation, they shouldn’t mine,” Mr. Slack added.

Jewelers join cause

Matthew A. Runci, president of Jewelers of America Inc., a trade group representing 11,000 jewelry stores in the United States, said his group’s experience with the “conflict diamonds” 1998 campaign had it moving in the same direction as the No Dirty Gold initiative by 2003. In the 1998 campaign, nongovernmental organizations began exposing the link between the diamond trade and civil wars and other abuses in African countries such as Sierra Leone, Angola and Congo.

“That experience [with conflict diamonds] helped inform us, guide us and commit the necessary resources to devise an approach to supply-chain management,” Mr. Runci said.

To resolve growing concern about how gold is produced, Jewelers of America and other jewelry and mining groups announced in May 2005 the creation of a Council for Responsible Jewellery Practices.

The council is considering a certification system with an independent, third-party auditing body and logo or labeling similar to certification schemes used in the timber industry.

“There can be responsible gold mining on a large scale. The issue is: ‘What specific social and environmental standards ought to apply to particular sorts of mines in particular sorts of places,’” said Michael Rae, director of the council.

Residents protest

The industry effort to reform gold mining is a response to growing protests over the negative effects of gold mines, especially in developing countries, where environmental policies are often lax or poorly enforced.

In northern Chile, Mario Mautz, an avocado farmer in the semiarid Huasco Valley, typifies the growing opposition to gold-mining firms. Mr. Mautz and hundreds of his neighbors have turned their protests against the Pascua Lama mine, pushed by Canada’s Barrick Gold, into an internationalcause celebre.

Protests and marches are frequent in Santiago, Chile’s capital, and Mr. Mautz says the protests will continue, despite the government’s environmental approval of the project in June. “As long as there are scientific doubts about the environmental impacts of this project, we will not stop,” Mr. Mautz said.

Other high-profile clashes have involved U.S. mining giant Newmont Mining Corp. In February, it had to pay $30 million in an out-of-court settlement with Indonesia after the country’s government accused the company of illegally dumping waste containing high levels of mercury and arsenic on an island in North Sulawesi province.

The Indonesian government said the dumping caused widespread skin diseases and neurological disorders among nearby residents. A top executive of Newmont faces a criminal trial that could put him in an Indonesian jail for 10 years.

Two years ago, Newmont had to cancel plans to expand its Yanacocha gold mine in Peru, the world’s second largest, after thousands of indigenous residents, concerned about harm from water pollution, seized the mine and its roads.

Process deemed risky

In recent years, residents of Esquel in Argentine Patagonia and Tambogrande in northern Peru voted in local referendums to oppose proposed gold mines in their communities — by 81 percent in Esquel and 93 percent in Tambogrande.

The backlash is partly attributed to mining methods introduced in the past three decades, which analysts say have intensified environmental damage. Nowadays, large-scale gold mining almost exclusively uses “cyanide heap leaching” to recover microscopic bits of gold from low-grade ore.

The vast destruction from modern, large-scale gold mining begins with blasting the ground to create huge, open-pit mines. Gold-mining specialists have said in interviews that, on average, to extract one ounce of gold to make a gold ring, miners remove about 20 tons of rock.

The debris from this highly wasteful process is sometimes as high as 30-story buildings, causing long-term toxic leaching problems.

Rock that contains significant concentrations of gold is taken to heap-leaching facilities, where it is sprayed with a cyanide solution to remove the gold. Millions of gallons of water is pumped out of the ground each day to dilute the cyanide, which can kill human beings and other creatures in minute doses.

In some developing countries, the cyanide-laden rock, called tailings, is dumped into rivers or the ocean when the heap leaching is done — a practice banned in the United States and Canada.

Mostly, however, tailings are pumped into “tailing dams.” There, if heavy rainfall doesn’t occur first and cause the ponds to overflow, over time the heavy metals and cyanide waste move toward the bottom of the dam.

Robert Moran, a hydrogeologist and international mining consultant for more than 30 years, said the liners in tailing dams almost always leak. “They all have ground-water contamination near them,” he said.

Luke Danielson, a lawyer and researcher who led a two-year review of the industry called the Mining, Minerals and Sustainable Development Project, said farming, fishing, hunting and other nature-based economic activities in developing countries are threatened by long-term mining contamination.

“The economic issue and the environmental issue for the poor people of the world are the same,” Mr. Danielson said. “The industry has to learn how to support sustainable forms of development, or it won’t get consent to operate.”

Regulation is key

Many gold mining companies respond that they are trying to better control the environmental effects. The use of cyanide, miners say, is the only viable option for obtaining gold nowadays. They assert that an industry self-regulation code for the manufacture, transportation and use of cyanide in gold mining — announced late last year with the help of the United Nations Environment Program — will ameliorate problems.

The International Council on Mining and Metals, a London-based industry group, is pursuing initiatives to improve environmental management. For example, it is putting together sustainable-development principles to spread “good practices.”

ICMM Secretary-General Paul Mitchell conceded to The Washington Times that “some mining companies handle their operations poorly,” but he insisted that critics should distinguish between such firms and those performing responsibly.

“Governments need to regulate more, and companies have to be more cautious in where they put their money,” Mr. Mitchell said. “But to say that the industry is universally disruptive is just not true.”

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