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Among the many knock-on effects of COVID-19, there was a massive uptick in the demand for one of the world’s most alluring commodities: gold.
In the financial world, gold is considered a ‘safe haven’ in turbulent times, as investors flee high-risk assets and stock up on bullion or related mining securities as a store of value. Gold’s price surged 40 percent in a span of five months during the pandemic last year.
But the ripple effects that this gold rush has on the environment have not been widely examined, and particularly the impacts on one of the world’s most celebrated biodiversity hotspots: the Amazon. Not only does gold mining jeopardize the health of the Amazon’s some 3 million species, but also that of local communities and Indigenous peoples when the element is extracted in an unsustainable way.
When Amazonian landscapes are deforested to clear land for mining, greenhouse gases are released from the trees and soil, which store around four or five years’ worth of human-made carbon emissions. The change in landscape also inhibits the Amazon’s ability to regulate global weather patterns.
In recent times, gold has contributed to an estimated 10 percent of the Amazon’s deforestation overall. In parts of an area known as the Guiana Shield, which stretches through six countries in the northern Amazonian regions, gold mining has been the cause of 90 percent of deforestation. But Peru and Brazil, the countries that hold the two largest swaths of the Amazon, feel the effects of gold mining most acutely.
It’s not just the financial markets that drive Amazonian gold mining, nor is it simply the COVID pandemic. Jewelry, electronics, dentistry and numerous other industries keep the demand for gold high. So what’s to be done to make it more sustainable?
While price spikes in gold certainly spur more mining activities, ‘gold fever’ regularly grips vulnerable communities in the Amazon, where artisanal and small-scale gold mining offers an escape from rural poverty. These unregulated practices are found in more than 80 countries and involve as many as 20 million people, the Amazon Aid Foundation says.
Twenty percent of the world’s gold supply is produced by this informal sector, according to 2018 figures cited by the International Institute for Environment and Development.
“Small-scale surface gold mines, known as garimpos in the Amazon, are unlikely to disappear, given that the sector employs 200,000 people in the region,” says Marcelo Oliveira, a conservation specialist at the World Wildlife Fund (WWF) in Brazil. “It is urgent to minimize their impact while addressing the social and economic development of local communities.”
Improved regulation and law enforcement are vital to limiting this impact. However, this has proven to be difficult in recent years.
In Peru, the world’s fifth-largest gold-producing country, authorities clamped down on illicit operations in the informal town of La Pampa in 2019 only to see new ones spring up elsewhere in the Madre de Dios region.
Earlier this year, NASA satellite images confirmed the extent of gold mining activities in Madre de Dios, capturing graphic photographs of the “rivers of gold” operations employing thousands of miners in this regional hotspot of biodiversity.
“There are 2,419 garimpos operating legally in Brazil and a backlog of 16,687 in the process of obtaining a full license,” Oliveira says. “It is important to bring the latter group of garimpos into the system, while strengthening the government’s ability to monitor the sector and enforce the laws that govern it.”
Operating within the system in a sustainable way would allow miners to retain their livelihoods while limiting their impact on the environment.
Another aspect of regulation involves the use of mercury, which is a standard feature of unsustainable mining. The toxic metal is used to sift gold from the rock sediment, but it then finds its way into the air, waterways and food chain, where it can cause neurological and other disorders in people and wildlife.
In 2017, the Minamata Convention entered into force under the auspices of the UN Environment Programme (UNEP) in an effort to protect human health and the environment from the adverse effects of mercury. This global pact ratified by 128 countries also contributes to the UN’s Sustainable Development Goals, which have direct relevance to the health and well-being of gold miners.
Currently, mining operations are not prohibited from using mercury or cyanide in Brazil. However, the country is a signatory to the Minamata Convention, and a phase-out is urgent within the regulatory framework, according to WWF’s Oliveira.
Market solutions could also be considered in phasing out mercury. This might include direct sourcing from “mine to market,” which would provide incentives for artisanal and small-scale miners to invest in mercury-free technologies. This approach could be negotiated with refineries or manufacturers, such as jewelers, in exchange for the adoption of responsible mining practices, potentially with the support of certification schemes, according to Oliveira.
The recognition of Indigenous land rights is also key to preventing illegal mining by outsiders and the associated exploitation of local labor. For example, the Yanomami people of northern Brazil are among those most affected after decades of intrusion by gold miners who destroy the forests and import infectious diseases into the communities.
Last year, a Brazilian court ordered the expulsion of around 20,000 illegal gold miners from Yanomami land to help prevent the further spread of COVID-19 on the Indigenous reservation.
“Illegal mining is an existential threat to Indigenous, Afro-descendant and local communities in the Amazon region,” says Omaira Bolaños, director of the Latin America and Gender Justice Programs at the Rights and Resources Initiative in Washington, D.C. “The pandemic has provided cover for these activities to accelerate at an unprecedented pace.”
Legal recognition of land rights is just one step in the process of empowering these communities to defend their territories and ways of life, according to Bolaños. Governments, environmental authorities and civil society must also take measures to help these people protect their lands.
“Regulations supporting environmental and tenure rights should be implemented in a way that enables communities to maintain their existence, their cultures and livelihoods, while preserving the biodiversity of forested areas,” she says.
Improved gold mining practices also require engaging consumers and retailers at the end of the value chain by promoting awareness and certification requirements.
Organizations such as Amalena, Fairtrade, Solidaridad and the Responsible Jewellery Council help ensure that the production process excludes unsustainable suppliers, giving buyers more confidence in their purchase of clean gold.
The onus is largely on the consumer to exercise due diligence by asking retailers for evidence of sustainable industry practices in their supply chains. This could include a requirement for recycled gold, which reduces the need for mining since existing stock of this scarce precious metal is used for production. However, it is difficult to ascertain whether clean gold has been used in the recycling process because the refinery supply chains are not always transparent.
Jewelry, which accounts for 46 percent of the total above-ground gold stock in the world, is one of the main industries using recycled gold.
“Gold has been valued and mined for thousands of years and is always recycled, so virtually all the gold ever mined still exists in one form or another,” says Iris Van der Veken, executive director of the Responsible Jewellery Council (RJC) in London. “Gold is therefore an extremely sustainable product because it can be infinitely recycled.”
The RJC says its recycled gold may only be processed from end‐user, post‐consumer and investment gold and gold‐bearing products, as well as scrap and waste metals or materials arising during refining and product manufacturing.
It aims to ensure that gold is not associated with any human-rights abuses or criminality. The RJC’s Chain of Custody standard for precious metals provides robust and independently audited evidence that gold is responsibly sourced, while the group’s Code of Practices requires members to apply rigorous supply-chain due diligence in order to detect and mitigate risks – especially human-rights risks, according to Van der Veken.
The application of these standards and policies is critical to ensure that responsible practices are embedded throughout the industry, she says.
“Sustainability is a complex concept,” Van der Veken says. “For the millions of gold miners and their families around the world, sustainability means the income they make from mining. It is literally their livelihood, clothes and education for their children, as well as food on the table. Some of the miners are from the world’s poorest countries, and mining is often one of the few occupations available – especially in remote rural areas.”
New gold and recycled gold therefore shouldn’t be valued differently, and moral critiques should be avoided because they can result in unintended negative consequences for mining communities, according to Van der Veken.
“Recycled gold is not morally different to, or more ‘sustainable’ than, new gold,” she adds. “And, of course, today’s new gold is tomorrow’s recycled gold.”
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