Fool’s Gold

Ten Problems with Gold Mining

Over 85% of gold mined today will end up as jewelry tomorrow.

Gold mining is not an essential industry like the harvesting of food or even paper production. It is certainly not sustainable, nor is it just.

Yet the cumulative impacts of gold mining worldwide, on local economies and ecosystems, is at least as bad as that of industrial forestry and agri-business. With more than 66% of all new mining exploration in the hard-rock sector currently focused on gold, the problems are going to get worse for people and places around the planet. Here’s just a sample:

1. Genocide: Every major gold rush has meant death and devastation for local people at the hands of fortune-seekers. The Mayans believed the Conquistadors ate gold – how else could they explain their insatiable lust for it? Californian Indian nations were decimated; first by the disease the 49ers brought with them, and then by the new Californian state government which put bounties on the heads of native people. The new government paid out a million dollars from its gold revenues for scalps in 1851 alone. From the Sioux of the Black Hills, to the Aborigines around Bendigo in Australia, the history of gold is tainted with blood; and today Amazonian tribes, like the Yanomami and Macuxi, the Galamsey of West Africa, and the Igorot of the Philippines are similarly endangered.

2. Water: Damage to water and water resources is the worst environmental consequence of gold mining. From California’s Sierra Nevada in the 1850s to the lands of the Pemon in Venezuela today, rivers have been ruined by people panning for gold, using high pressure hoses to spray down river banks and sift through the sediment for gold. The effects flow downstream, destroying plant and fish life. But modern mining is even more destructive of water resources: the gold industry in Nevada – where most gold in the US is mined – consumes more water than all the people in the state. The water table has fallen as much as 1,000 feet around some of the largest open pit gold mines in northeastern Nevada, says the U.S. Geological Survey. One of the mines consumes 100 million gallons per day – as much as the city of Austin, Texas. And that’s not all: water systems around mines are contaminated by cyanide and other process chemicals, and the acid mine drainage that runs off exposed rock.

3. Waste Rock: To make a simple gold wedding band, at least 2.8 tons of earth are excavated. The gold mining industry generates an enormous amount of waste compared to its product: the 2,402 tons of gold produced in 1997 resulted in 725 million tons of waste, which was contaminated with metals, acids, and solvents, according to Worldwatch Institute. The standard ratio of waste production in the United States gold mining industry is one to 3 million, meaning that for every ton of gold produced there are three million tons of waste rock. Most of the unsightly mess left behind is exposed to weathering and will ultimately leach acid and heavy metals associated with the gold into the local area at great ecological cost.

4. Free Access: In many countries, gold mining companies are allowed “free entry” to public lands – the most incredible corporate welfare – for mineral exploitation. In the US, it’s not entirely free – but the companies need only pay $5 an acre to “patent” a patch of federal land. This means the title is transferred to this private interest and is open to mining, ignoring any other values whether these be ecological, recreational or spiritual. Since 1872 the government has “sold” land equivalent in size to the state of Connecticut, under this law. This land contained $245 billion worth of minerals! Developing countries are adopting similar land access policies as well, pushed by corporate advisors: since 1994, more than 70 countries have changed their laws to attract foreign gold mining companies. As a result the gold mining industry in the global South is booming: between 1991 and 1997, exploration investments expanded 6 times in Latin America, quadrupled in the Pacific region, and doubled in Africa. Since a new “pro-development” mining act was adopted in 1995 in the Philippines, over a quarter of the land surface of the country has been handed over as gold mining prospects.

5. Indigenous Rights In the United States: The US – the second biggest producer of gold in the world – more than 70% of gold is ripped from native lands. The Western Shoshone, whose traditional domain covers most of Nevada, are the unhappy hosts to more than three dozen open-pit gold mines on their land, many at least a mile wide and a mile deep, with toxic ponds at the bottom. The Western Shoshone have continually been denied their land and treaty rights, as the United States increasingly allocates Nevada to multinational mining companies rather than to the rightful owners. The story is repeated around the globe. In Ghana, in the mid-1990s, thousands of traditional farmers were evicted and replaced for World Bank-sponsored gold mining operations covering hundreds of square kilometers. It is now estimated that 50% of gold produced in the next 20 years will come from indigenous peoples’ lands.

6. Mercury: For centuries, mercury has been used to chemically separate gold from ore, leading to major public health problems for miners and communities living around mineral districts. During the California Gold Rush, 7,600 tons of mercury were released into local rivers and lakes, resulting in neurological disorders and deaths amongst people exposed to this deadly toxin – at that time, mercury poisoning was known as “mad hatter’s disease”. More than 50% of mercury exposure today in the San Francisco Bay area is an historic legacy of the 1849 gold rush. Furthermore, millions of small-scale miners use mercury, from the Amazon – where they have invaded indigenous reservations – to the Philippines, resulting in the worst outbreaks in recent history of what we now know as Minamata Disease, and many other horrors. Of 500,000 “garimpeiros” (gold miners) tested in Brazil, more than 30% of them showed mercury levels above the World Health Organization’s tolerable limits.

7. Cyanide: Cyanide is the chemical-of-choice for mining companies to extract gold from crushed ore. Very low-grade ore, with minimal residues of gold, is crushed and piled on the ground, then sprayed with a cyanide solution. No mine has ever avoided leaking cyanide-laced water and waste into the ecosystem. In Kyrgyzstan, a major cyanide spill in 1998 resulted in 4 deaths and the evacuations of thousands of people living downstream of a Canadian-owned gold mine. At one U.S. mine, Summitville, taxpayers have already paid out $100 million in a few years for the EPA to simply contain – not clean up – contamination of local rivers. Meanwhile, a spill of billions of gallons of cyanide laced-waste from the Omai mine in Guyana caused the death of thousands of fish and scores of other animals downstream.

8. Dud Investment: According to Merrill Lynch, gold is “the duddest of dud investments”. Ever since the US dollar was decoupled from the gold standard, gold as a commodity has had no special value, with only 280 tons going to industrial uses per year, and yet some people continue to hoard it. The price of gold has been slowly dropping and is now well below the price of its production at many modern mines, which means companies mining new or “virgin” gold are a bad investment. Even the 35,000 tons of gold bullion held in central banks have lost 30% of their value over the last decade – a huge waste of taxpayer assets.

9. Dowry: Most gold is sold as jewelry and most of that is consumed in India. This is not however a simple tale of vanity or non-essential, excessive consumption. The women who wear it are themselves victims of the yellow metal: it is given as part of their dowry in wedding ceremonies and it remains the only form of wealth most Indian women are allowed to own and control. The repression of women in India is wrapped up in gold. Their emancipation may be advanced by rejecting the system of hoarding wealth in the form of gold jewelry – a phenomenon which has boomed with the growing disposable income of the country’s middle-class – and paying it as a fee to get a man’s hand in marriage.

10. Ecosystem Impacts: Contamination and waste of water, destruction of habitat and biodiversity, industrialization of wilderness, roadbuilding, and the dumping of huge volumes of waste in mined areas all negatively impact the environment around gold mines. “Frontier forests” – the last remaining old growth stands – are under seige by gold exploration. Fisheries suffer from heavy siltation and toxic run-off into waterways from gold mines. Today, all mines scrape away and dig up more earth than do the world’s rivers through natural erosion! The impact on wildlife is hard to calculate but between 1980 and 1990 seven thousand birds were found dead near cyanide-laced ponds at gold mines in California, Nevada and Arizona alone – the tip of the iceberg of gold mine – related deaths.

Demands of the Goldbusters Coalition:
• a moratorium on exploration for gold.
• a ban on new, large-scale and toxic chemical-dependent gold mining.
• that where the peoples and/or environment demands closure, the mine should be immediately decommissioned in an environmentally and socially responsible manner.
• that gold mining companies set up community-controlled funds to pay for the just transitions of workers retrenched from the sector; for the creation of healthy, alternative economies; and to pay for clean-up, monitoring and remediation of gold mines, long after they are closed.
• an end to all military, paramilitary and mercenary activity used to repress people and secure mining.
• that international financial institutions must not fund new gold mines or gold mining companies.
• that governments stop their support and subsidies of gold mining companies. (*GoldBusters supports subsidies for small scale community pilot projects for ecological mining of gold.)
• sustainable alternatives for communities in place of gold mining as the primary economic activity.
• that governments must demarcate the lands and respect the complete territorial rights of campesino, indigenous and tribal peoples.
• that any gold mining that does occur should be managed only in the strictest environmentally and socially-safe way, and should not include submarine or riverine tailings disposal nor seabed extraction.


Notwithstanding the almost inconceivable value attached to these masses of silver and gold, it is probable that they are really of no benefit to the world. They are obtained at the expense of immense toil, severe privation, and prodigious waste of life. The labor bestowed upon the pursuit of humbler minerals, or even in agriculture, would doubtless have yielded more solid advantages to mankind.
(from “Enterprise, Industry and Art of Man”, Boston, 1848)

For centuries, people have understood that gold mining is a big problem for both land and people.

The good news: there is an answer to the plague of gold mining sweeping the globe. If people want to wear gold, use it to fill cavities, or for micro-circuitry in computers and cell phones, that’s fine – but take it from recycled sources. We should mine the bank vaults first.

Of the 125,000 tons of gold ever dug out of the ground, more than 35,000 tons of it lies in the vaults of central reserve banks, at places like Fort Knox. In fact the US Federal Reserve owns 8,145 tons of gold – about 6% of all the gold ever mined – and the government’s own studies show there is a net economic benefit in selling some of this stock. Enough gold for more than 350 years of current, so-called “essential” use lies above the ground in bank vaults – we can recycle this stock for the few uses for which there is no substitute. Otherwise, all that bullion will keep gathering dust in the bowels of Fort Knox – where it doesn’t even accrue interest – while natural and human communities’ homes are dug up for jewelry.

This text was excerpted from
The Gold Album: Action Packed (PDF)
a report by Project Underground