Eco-gold, Another Deceit?

Gearid Loingsigh

09/04/2014
goloing@gmail.com

In March the people of Cajamarca, Colombia, voted overwhelmingly

against the presence of mining companies in their territory, a stunning
victory over Anglogold Ashanti (AGA). The people voted not just against
mining but also in favour of water, the environment and against the
destruction of the environment that goes hand in hand with gold mining.
At the end of March, the felling of forests and the destruction of the
ecosystem in the Department of Putumayo caused a flood and landslide
that swept away Mocoa, leaving hundreds of victims in its wake. In
Switzerland at the end of March, the Better Gold campaign was
launched. These events are connected.

After the victory of the people in the public referendum in Cajamarca,

the Colombian government discredited and rejected the result, stating
that it was not binding and the mining would have to continue. When
the river and the mud engulfed Mocoa, the government asked for our
solidarity, and asked us not to think too much about the causes of the
disaster. There is no shortage of NGOs that earn their bread reconciling
the demands of the people with the needs of the multinationals and the
state. They will not be missing from Cajamarca. They will be there
again, as truth be told, the reconciliation discourse is ever present. They
will say that we have to negotiate, that you have to understand the point
of view of others, now that we are living in times of peace, and we all
have to build a new country together, including the mining companies
and perhaps we will have to listen to the paramilitaries that threatened
the El Salmn1 magazine for its reporting on and analysis of mining (By
the way, there is no greater honour than a magazine being threatened
by such lunatics). In the midst of this debate come the proposals for
eco-gold, green gold, sustainable gold, just gold, a long list of
euphemisms, or as the Swiss say, Better Gold.

The Better Gold campaign is not the only one of this nature, there are
many and they all have similar aims. The first one is to convince us that
there can be gold that does not harm the environment, they sow doubts

1 Note for English version: This article was originally written in Spanish
for El Salmn, a left wing journal in the coffee growing region of
Colombia. The magazine received various threats from the
paramilitaries after the massive vote against mining. It has long
campaigned against Anglogold and mining in general.
among the people and shift the focus of the debate. The Better Gold
campaign is one of those campaigns by NGOs that have been bought off
by the mining companies. It is not a baseless accusation to blame the
NGOs of being responsible for this fifth column that the companies want
to set amongst us. On the official Better Gold website Fair Trade
International appears as a member i.e. the champions of fair trade (in
reality trade that is slightly less unjust, but that is a topic for another
day).

Better Golds Mines

Better Gold promotes, according to themselves, a gold that is better in

social and environmental terms. They support three mines in South
America. One of their mines is in the town of Cuatro Horas, Per, which
barely produces 360 kilos of gold per year, according to Better Golds
website. Another mine they support is Sotrami in Santa Filomena in the
Atacama Desert, one of the driest spots on the planet. This mine
produces about 400 kg per year. The web page does not yet have much
information on the other mine.2 Regardless, we can see that they are
small mines, their production is low compared to that of a large open
cast mine or a deep shaft mine. The smallest AGA mine in South Africa,
Kopanang, produces between three and four times that amount,
depending on the year.

Just because they are small mines and what Better Gold itself and other
responsible gold initiatives call sustainable, they are not ecological.
They also use cyanide in the gold extraction process. So, what is better
about them if they use the same poisonous chemicals as the large
companies? In the case of the Sotrami mine, Better Gold claims that
through the electrification of the area the town will stop consuming
80,000 gallons of diesel per year, with a resulting reduction in CO2
emissions equivalent to 779 tonnes. We have no reason to doubt this
achievement. But, what has it got to do with a more sustainable gold?
The answer is nothing. What we have here is trickery, a sleight of hand.

All large mining companies in the world invest in the communities. In

order to win over people, they build schools, support water projects,
electrification projects, which the mine also requires, as without
electricity and water there is no gold mine and without schools, workers
wont bring their families with them. It is that simple. There is no
difference between these projects and those of AGA in various parts of
the world. However, we would not likely accept that AGA was an eco-
friendly company and that its gold was better because it supported
2 The information on the Better Gold campaign, the members and the
mines they support comes from the official website
www.swissbettergold.ch
electrification. When we talk of an environmentally and socially
sustainable industry, we are talking about its actual business, the
extraction of gold. In this case, Better Gold, like all the other initiatives
do not deserve to be deemed sustainable. Their business activity
contaminates, destroys the environment and consumes large quantities
of water, and on this point the Sotrami mine located in the driest desert
in the world cannot be regarded as sustainable. Applying an average of
12 m3 of water per Troy Ounce (31.103 grams), Sotrami consumes at
least 155,000 m3 of water per year, enough to meet the basic needs of
8,300 people (the town where the mine is located has a population of
4,000). The Sotrami mine uses cyanide, followed by an agitation with
carbon and desorption process, which it is claimed helps absorb the
cyanide. The method is not exclusive to small-scale mining; the large
companies also use it. Perhaps the supposed good of the gold comes
from using this method, but if that were the case then we would have to
classify all the large companies as sustainable as well.

Better Gold Members

It should come as no surprise that these mines are not as nice as they
would like us to believe. When we look at the list of members, we find
various companies from the sector, such as diamond companies, or
Cartier and Swatch, companies that require gold for the manufacture of
their products, luxury items in one case and not so much in the other
case. We also come across companies such as Metalor. Metalor is a
company that shows us what is at stake when we uncritically accept
supposedly sustainable mining projects. Metalor boasts of being a
company that stands out for its work in pursuit of Conflict Free Gold
(something similar to the campaigns against blood diamonds) and a
responsible exploitation of gold. According to the World Gold Council:

The Conflict-Free Gold Standard provides a mechanism by which

gold producers can assess and provide assurance that their gold
has been extracted in a manner that does not cause, support or
benefit unlawful armed conflict or contribute to serious human
rights abuses or breaches of international humanitarian law.3

There then follows a series of declarations of good intentions in the text,

their adherence to various voluntary principles of the UN etc. Non
compliance does not entail real consequences i.e. there are no fines or
anything, they simply report it so as the companies in the production
chain know that the gold they have used does not meet the standard. It
is important to highlight that who evaluates whether the gold meets the
standard, is the World Gold Council itself, a body which in turn belongs
to the worlds large mining companies. We should also note that they
3 WGC (2012) Conflict-Free Gold Standard, page 1 www.gold.org
are only worried about illegitimate armed conflicts, invasions sanctioned
by states are not a cause for concern. Amongst the signatories are
some of the most internationally questioned companies, such as Barrick,
Newmont and Anglogold Ashanti, this last one being a beneficiary of
Apartheid and a financer of paramilitary groups in the Democratic
Republic of Congo.4

Another company that supports Better Gold is UBS, a specialist company

in the finance sector. According to its website, amongst its services are
asset and wealth management and its very own Investment Bank. 5 In
other words it is a predatory company from the financial sector, which
takes advantage of deregulation in order to maximise profits and there
are those who want us to believe that these people are concerned about
the environment and in favour of greater regulation to protect it.

But at the end of the day, the problem does not lie with the members
nor the mines but rather with the idea that the response to gold mining
is to promote gold that contaminates less (not to say cleaner like the
companies do, as it is not clean).

Gold, an unnecessary metal

One of the biggest problems with sustainable or eco-gold (though no one

knows what that is) is that it ignores the main problem. The mining
companies want to take the metal out of the earth and negotiate the
level of pollution and the destruction of the environment with the
communities. There is no mining without some degree of this and any
attempt by the NGOs to convince us of the opposite is a lie paid for by
their masters (the mining companies). They ask us to accept such
ruination for the communities for a metal that the world does not need.
The statistics from the industry itself show us exactly how useless this
metal is.

In 2016, global gold demand for the jewellery industry was 2,041.6
tonnes, a decrease of 15% in respect of 2015. 6 But demand for
investments increased dramatically rising from 918.7 tonnes to 1,561.1
tonnes. The ingots and coins accounted for 1,029.2 tonnes and the rest
were investments in Exchange-Traded Funds. Industrial demand was
322.5 tonnes. In 2016, mines around the world produced a total of
4 For more information on the financing of paramilitary groups see HRW
(2005) The Curse of Gold, HRW, New York. www.hrw.org
5 https://m.ubs.com/global/en.html

6 All figures on gold production, recycling, etc are taken from the
website of the World Gold Council and their document WGC (2017) Gold
Demand Trends Full Year 2016 www.gold.org
3,236 tonnes and 1,308.5 tonnes were recycled, giving us a grand total
of 4,570.8 tonnes. This means that in 2016 the mines produced
sufficient gold to meet industrial needs for 10 years and if we include the
recycled gold, 14 years. Furthermore, if we take a look at central bank
reserves around the world, we find that in March 2017, they held
33,292.8 tonnes. The majority of these reserves are concentrated in a
few hands. Ten countries and two banking bodies control 78% of the
central bank world reserves. Colombia barely has 5.8 tonnes and South
Africa the main producer of gold in the world has just 125.3 tonnes.

World Official Reserves7

Country / Body Quantity in Tonnes
USA 8,133.5
Germany 3,377.9
IMF 2,814.0
Italy 2,451.8
France 2,435.8
China 1,842.6
Russia 1,645.1
Switzerland 1,040.0
Japan 765.2
The Netherlands 612.5
India 557.8
ECB 504.8
Total 26,181.0

All of the countries with the largest gold reserves are the ones that most
consume it. If we put the reserves to an industrial use, we would have
sufficient gold for industrial needs for the next 103 years, at the 2016
rate of industrial use. If we only exploit the reserves of the countries
and banking bodies in the above table there is sufficient gold for 81
years without recycling a single gram. If we include private reserves we
get a figure of two and a half centuries.

Furthermore, the industrial uses are mainly for the electronics industry,
computers, cell phones etc. Of the 322.5 tonnes employed in industrial
processes, 254.5 were accounted for by the electronics industry. But in
the same year, 1.308.5 tonnes were recycled i.e. almost four times the
amount used in industrial processes and more than five times that of the
electronics industry. All of this means that with what we recycle we
could meet industrial needs.

7 WGC (2017) World Official Gold Holdings www.gold.org

That means that there is no such thing as sustainable gold; we dont
need it. These calculations not only presume that nothing is recycled,
but also that in the course of the coming centuries no alternatives to
gold are found or that our industrial uses are no longer relevant.

Just gold, an ideological battle

When they talk of just gold, they deceive us, it is stupid to talk of gold
produced in a sustainable manner and the NGOs such as Fair Trade
International are aware of this. Furthermore, the production they refer to
is relatively small, but it is not an economic initiative, but rather an
ideological one. The companies and their henchmen in the NGOs want
to convince us that there is such a thing as just gold, a gold that we can
use and exploit in a sustainable manner. The industry as such must not
be questioned, nor the uses we put their products to, but rather we
should back a supposedly sustainable proposal. Through this, they want
to tell us that it is possible, some day, to arrive at a point of social and
environmental equilibrium and consequently we should spend our time
on that and not on opposition as the people of Cajamarca did. Every
year the gold mining industry uses millions of kilos of cyanide (the
industry itself claims to use 65,000 tonnes per year), it removes billons
of tonnes of earth with all the negative consequences this has for the
eco-system.

This equilibrium does not, and cannot exist. The ecological and fair
trade proposals for gold, are a real-life fifth column in the environmental
movement and if they are accepted, when the towns in the sights of the
mining companies realise they have been deceived it will be too late.
That is why we must treat these initiatives like the Corporate
Responsibility initiatives, as public relations exercises that enlarge the
coffers of the NGOs who promote them and demobilise the communities
and absolve the companies of any blame.

The battle is not for just gold, but rather for a world without unnecessary
mining. For the communities that depend on gold, it is the search for
alternatives to the industry, something they will have to do, sooner or
later, when the mine runs out and for the agricultural communities, total
direct opposition to the arrival of the mining companies, the NGOs that
support them and the ecological/just/green gold tall tale.