The case for leaving gold in the ground

Christopher Pollon is the author of Pitfall: The Race to Mine the World’s Most Vulnerable Places, from which this essay has been adapted.

At Barrick Gold Corporation’s 2021 annual general meeting, I was waiting in an online queue with a few other journalists when my turn came to ask a question to chief executive Mark Bristow, who at that moment presided over the second-biggest gold mining company on Earth.

“At a recent mining conference, you were talking about ESG [environment, social and governance issues] and said, ‘Everyone uses metals from mining every day, but it’s an unloved industry, and we’ve got to change that.’ My question is, how is Barrick currently working to change that?”

Mr. Bristow thanked me for my question, and promptly instructed me to look around my office. “I don’t know where you live, but wherever you are, if you just look around yourself, and you take away everything that has been created through mining, you’ll feel very exposed.”

It was the fourth time I had been instructed by a mining industry professional to “look around” in the months spent researching my new book. During that time, I came to see it as more than a rhetorical question, or a defensive response. Especially if you live in a rich country, it is imperative that all of us take a careful look around us, in our rooms and homes, in our communities, in our places of work – as the first step to becoming aware of the metals we consume and, more importantly, the cost at which we rely upon them. Only by doing this can we begin to determine what resources we need – and what we do not.

So I encourage everyone reading this to stop for a moment to look around the room they currently occupy. I’ll start: A 360-degree scan from my home office chair revealed at least 16 things I own that could not exist without mining; five are electronics, including two cellphones (one inoperable), a printer, and a laptop computer connected to a monitor. There is steel in my stapler, scissors and pens, and aluminum in my window frames. All the window glass is made from sand, and there’s a mixture of copper, aluminum and steel (I think) in the smoke detector and fire sprinklers keeping my family safe. Framed above me are my grandfather Vittorio’s First World War medals, struck from recycled bronze, an alloy of copper and tin: One of them bears the all-caps inscription CONATAL NEL BRONZO NEMICO – ”struck from enemy bronze.” (Apparently the victorious Italians recycled the metal abandoned on the battlefield by their vanquished Austro-Hungarian foes.) About 125 pounds of copper wiring runs through my townhouse, less than the almost 200 pounds of copper wires in the average North American home. And without concrete, steel rebar, and massive amounts of quarried rock, gravel and sand, the building would not stand at all.

Other than the medals, there is only one mined object I could identify that had no practical function in my life: the 18-karat gold wedding band on my ring finger that exudes a dull light as I type these words. I always loved this ring and what it represents, until the day I learned that making this tiny piece of jewellery – weighing about a third of an ounce – generated at least 20 tons of mine waste on its journey from the earth to my finger.

If the idea is to minimize the environmental and social costs of mining – to dig as few destructive industrial mines as possible – we all need to take a good look around for real. Gold is a good place to start. There is enough gold in circulation today that we could stop targeted industrial gold mining and it would not affect the supply we need for its practical applications. The current rationale used by some miners to open up the global seabed to industrial mining – the idea that we should stop all deep-sea mining for battery metals once enough has been recovered to satisfy the world’s needs from recycled stock – already applies better to gold than perhaps anything else.

That’s because a vast majority of the gold mined today, according to journalist Brook Larmer, “is not vital to human existence; it has, in fact, relatively few practical uses.” Only about 10 per cent of the world’s gold demand comes from industry, where it is used primarily as an efficient, corrosion-proof conductor of energy. About half of the current gold in the world exists as jewellery, with the other roughly 40 per cent hoarded in coins and bullion (in bar form) by investors and central banks.

To get all this, gold generates more waste per ounce than any other metal. Billions of gallons of contamination have been released since cyanide heap leaching emerged in the 1970s – embraced as a “game-changing” approach that made it possible to economically exploit very low-grade gold deposits. Artisanal mining, which accounts for at least 20 per cent of gold production, is the biggest single source of mercury contamination in the environment. With the plummeting of gold ore grades globally – even more dramatically than for other metals – industrial gold mining now targets deposits of less than a gram per metric ton, which means such a gold mine needs to dig other metals out of the same ground to make it worthwhile.

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We can find wise counsel in the experience of Indigenous cultures who were immune to gold fever. To the Inca, gold was valuable as a source of spiritual power, but incomprehensible as a European means to material wealth and power. Aboriginal Australians lived for 50,000 years beside surface gold deposits without making a fuss about it. And environmental historian Bathsheba Demuth recounts how the Iñupiat, Yupik and Chukchi of the Bering Strait were well aware of the placer gold scattered in great quantities in their streambeds and creeks but didn’t care because it wasn’t useful to them.

“The worth of gold is not in its utility,” Ms. Demuth writes in Floating Coast: An Environmental History of the Bering Strait. “It contains no energy to sustain bodies or warm hearths. It is too scarce, heavy, and pliable to use for tools. It offers no shelter. Many people have died seeking it, but no person will die in its absence. The meaning and power of gold comes from the human mind, and how the human mind imagines gold’s inertia.”

Some question whether the world requires the gold we mine at all. “Do we really need this new gold mining for industrial uses, or could we reduce the harms on front-line communities and the environment by reusing gold that has already been mined?” The question was posed by Payal Sampat of the environmental group Earthworks, during a postscreening discussion at the online premiere of The Shadow of Gold, a documentary on the effects of gold mining. She added that massive quantities of gold sit in banks, in bullion form – enough to offset decades of current demand. The absurdity of gold as a financial instrument was captured by Harper’s writer Thomas Frank, when he descended 80 feet below Manhattan to visit the New York Federal Reserve Bank gold vault, then home to the world’s largest hoard of gold bars:

“Each [bar] was stamped with a number attesting to its purity, but as the gold room clouded my mind and nurtured my suspicions, I began to wonder: Who would assay the assayer? After all, the gold doesn’t circulate, or endure the everyday scrutiny of market actors. Instead, it’s locked in what looks like an unrenovated municipal jail. All we know is that when the wealth of the world shifts, the workers in that Manhattan sub-basement move a hand-cart of yellow blocks from one jail cell to another.”

When I floated the idea of voluntarily suspending industrial gold mining to minimize its significant harms – suggesting it’s better sometimes to leave the metal in the ground – one mining engineer I talked to, an Australian industry veteran, almost fell off his chair. “That’s batshit crazy, mate,” he gasped.

Despite its lack of utility, the inertia of the gold market is truly immense – worth over US$214-billion in 2021 and growing. By the time my book was published, gold was down about 10 per cent; this volatility did not stop Costco from selling out of a limited offering of one-ounce gold bars (with a two-bar limit per customer), marketed as a hedge against inflation and a means of diversifying investment portfolios.

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Keeping valuable metals in the ground sounds crazy to some, but it gets to the heart of determining what we collectively need versus what the market demands.

Over the past two decades, concerns about the environmental and social impact of industrial mining – not just gold – have prompted a flurry of bans and moratoriums, where leaving otherwise valuable metals in the ground is viewed as a best-case scenario.

A 1998 treaty banned “any activity relating to mineral resources” in Antarctica, followed by Costa Rica’s 2010 ban on open-pit mining. Seven years later, El Salvador banned all metal mining. Fears of widespread contamination have seen bans imposed on radioactive minerals in Greenland, Kyrgyzstan and Spain. And over roughly the same two decades, Argentina, Colombia, Ecuador and the Philippines have imposed various moratoriums on mining. There are also multiple bans and proposed moratoriums on deep-sea mining.

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The point here is: We can and often do say no to mining if we need to. When it comes to gold, we could stop building big dedicated industrial gold mines tomorrow, and not only would we still have everything we need for gold’s current uses but gold exploration and mining would not even need to end. Just change.

Artisanal gold mining is here to stay for the foreseeable future, because it will decline only when poverty is eradicated; it represents a last-resort activity that virtually anyone, including a child, can do to survive. Meanwhile, gold recycling as a form of mining will only grow: There is one hundred times more gold in a ton of smartphones than in a ton of gold ore, as a 2019 report published by the World Economic Forum reads: “The earth’s richest deposits of valuable materials are sitting in landfill sites or people’s homes. More needs to be made of these resources.” In 2017, Apple unveiled Liam, a robot that can separate all 61 ingredients in a phone (gold being the most valuable, and many of them rare earths), in less than 20 seconds. Apple has stated an aspirational goal: to “stop mining the earth altogether: no longer will we put freshly mined minerals into our products.”

I initially treated the idea of cancelling industrial gold mining as a thought experiment, until I learned this is not a new idea. In 2004, Earthworks and a group of other NGOs used its “No Dirty Gold” campaign to raise awareness of the real cost of gold mining – an industry they portrayed as both destructive and unnecessary. The Jubilee Debt Campaign, an activist movement to cancel the debt of the world’s poorest countries, has demanded that the IMF sell off its massive stores of gold bullion – currently worth about US$175-billion – and put it toward the debt.

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Recent efforts to leave gold unmined and in the ground come from surprising places. During Michelle Ash’s recent tenure at Barrick, where she was employed as chief innovation officer, she explored the possibility of extracting the value of proven gold in the ground, without the social and environmental harm of digging it up. Using blockchains as a digital ledger system to create reliable records of the measured gold reserves in the ground, investors could buy tokens representing a quantity of gold underground, which would be traded on a digital exchange. “Could we vault gold in the ground, creating a completely different investment class?” Ms. Ash asked in a 2017 IdeaCity address. “We [could] start using blockchain technologies, so that we don’t have to mine at all,” she said, noting that two-thirds of the gold produced is used as a “financial instrument.”

Ms. Ash says Barrick seriously explored doing this – ”creating social and economic value from gold that’s still in the ground.” But the project was abandoned in the aftermath of Barrick’s 2019 merger with Randgold. (Ms. Ash now works for Oz Minerals.) At least one junior company is trying to move this model forward, with a gold deposit in Northern Ontario, but it remains early days.

For Barrick, this was part of a wider experiment to see if Canadians of Indian heritage would buy, sell and trade electronic credits representing real units of gold – e-gold – with their relatives in India. (Indians buy more gold jewellery than anyone else on Earth – China is second – not just as bling, but as a store of wealth that women have traditionally brought to a marriage partnership.) Ms. Ash says they found that people were comfortable with buying and selling e-gold as a proxy for the real thing.

We could stop mining for diamonds, too, which are typically mined in big open pits, artisanally dug from streambeds, or dredged from coastal waters at a high environmental cost. Diamonds can now be created in a laboratory by placing carbon in a pressure chamber.

The idea of leaving valuable resources in the ground (or on the seabed) is a truly disruptive idea, and part of the way the world will need to change if mining is to evolve beyond being “unloved” – and emerge as something we can all live with. After all, the world needs metals, but the world does not always need more mining.

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In the earth: More on mining from The Globe and Mail

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