Banks store it, people wear it, and in times of trouble, the world’s wealthiest hoard it. But what are the social and environmental costs of gold?
In light of global inflation, investors are flocking to gold as a ‘safe-haven asset’ to protect their wealth. Because unlike money, gold’s value is retained or even hightened in times of financial uncertainty.
As fears of a recession loom due to the war in Ukraine and the poor state of post-pandemic markets, demand for gold rose by 34 percent in the first financial quarter of the year – the highest it has been since 2018.
Globally, central banks hold more than 35,000 metric tons of gold, about one fifth of all gold ever mined. They typically have strict sourcing policies and buy over the counter from bullion banks, internationally-recognised refineries, or directly from the world’s largest producers like China, Australia, and Russia, respectively.
With Russia as the worlds third largest producer of gold, The Global Gold Transparency Initiative stated in March that banks must have a complete and accurate understanding of their gold supply chains, or risk inadvertently funding the war of Ukraine.
But for jewellers, sourcing gold isn’t always squeaky clean. The process has also been notoriously linked to human rights violations and environmental issues which affect the lives of workers, their families, and local communities.
You’ve probably heard about blood diamonds before, but gold doesn’t have a particularly good rap when it comes to human ethics either.
To maximise overall profit, many mining companies evade legislation by cutting costs on safeguarding measures. This leaves workers without sufficient protection from potential injuries and death from accidents, such as mine collapses.
This malpractice is not uncommon either, as 16 million people currently spend their working days in mines with unsafe conditions. On top of this, completely unauthorised mines are estimated to employ about 1.5 million globally.
Even in places where conditions are better, the risks of working in mines are always present.
In 2018, at least 950 workers were trapped in an underground gold mine in South Africa when a storm caused a power cut that prevented them from getting out. Engineers worked to get the lift in order, while rescuers evacuated one person at a time. It was a particularly stressful situation, considering 80 South African workers had reportedly died inside mines in the year prior.
Despite this, many residents continue to work in gold extraction as the risks are outweighed by the need to feel their families.
Environmental destruction and pollution
‘Striking gold’ is not as simple as striking an axe to solid rock.
During large-scale mining processes, chemicals like arsenic, lead, cyanide, and mercury are used to extract the gold. These toxins are subsequently released into the surrounding land and nearby rivers.
In small-scale mines, trees and shrubs are cut down before the land is dug up to search for tiny flecks of gold. Extracting these tiny pieces from the dirt is only possible by using large quantities of mercury.
A cocktail of these chemicals leak out into the environment, contaminate community drinking water, and threaten biodiversity – including the well-being of workers who have reported developing neurological problems and reproductive issues after handling them.
On top of this, the mining process produced a ton of waste, at least 20 tons for a standard gold wedding ring.
The term can be misleading, as there are two types of meaning tied to labels that indicate ‘fair trade’ gold.
The first is where workers are paid sufficiently from the miners, to supply chain workers, retailers, customers – and everyone in between. A large percentage of mines have listed their gold as ‘fair trade’ for adhering to these trading practices, without necessarily complying with international ethical standards.
The second branch – which most people would hope for when buying pieces of gold – is only awarded to mines that meet the internationally recognised FairTrade Gold Standard.
These mines will have strict requirements on site conditions, health and safety, chemical management, women’s rights, child labour, and protection regulations for the environment – especially surrounding water and forests.
Of course, deposits of gold sourced from certified mines will sell for a premium. However, many new jewellery dispensers have made considerable efforts to source their gold from ethical mines. Still, supply chains are complex, making it difficult to know where gold has come from one hundred percent of the time.
As regulations continue to slowly tighten on illegal mines, consumers should be adamant about checking the gold-sourcing details from jewellers before making a big purchase. It’s the least we can do, as so many risk their lives to obtain it.
Deputy Editor & Content Partnership ManagerLondon, UK
I’m Jessica (She/Her). I’m the Deputy Editor & Content Partnership Manager at Thred. Originally from the island of Bermuda, I specialise in writing about ocean health and marine conservation, but you can also find me delving into pop culture, health and wellness, plus sustainability in the beauty and fashion industries. Follow me on Twitter, LinkedIn and drop me some ideas/feedback via email.
The recent heatwaves across the UK and Europe were only possible due to climate change. Yet, despite the alarming conditions, adaptation to this new normal is happening far too slowly.
You might’ve noticed things are a little warmer across Europe this week. Whether you’re escaping to the office just for AC, or battling a sweaty commute on public transport, cities across the continent have been grappling with temperatures of 37...
New research by more than 150 political scientists has found that European voters are now almost five times as likely to vote for far-right parties as they were in 1995. Anti-establishment parties have also seen a surge in popularity.
Far-right parties are on the rise across Europe, new research suggests.
Analysis by more than 150 political scientists from 21 countries was recently published by PopuList, with the study led by...
While billions have been poured into manufacturing hydrogen the dirty way, experts in Canada found what was once thought to be impossible: a steady stream of white hydrogen.
Last year, thanks to a surge in solar panel installations, the world raved about how renewables overtook coal to become one of the largest suppliers of energy. Not to burst that bubble, but as great as that achievement is, it only...
Parasocial relationships have always existed, but social media has made them feel more personal. For Gen Z, constant access to influencers, streamers, and idols is blurring the line between fandom and real connection. What does the research say?
Have you ever watched so many interviews of your K-pop bias that it feels like you know them as a friend? Or what about when you’re watching your favourite streamer? They say...
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.
0 comments
