Gold mining has become a scourge which afflicts many Latin American countries. In some places a few giant transnational corporations operate, but in other areas, people in their hundreds or thousands, crowd into jungle rivers or the guts of mountains for a few grams of gold. While the big corporations insist they deploy the latest technologies, promoting economic growth and providing jobs, small informal or illegal mining is under the shadow of contamination, violence and poverty.
In fact, both practises are equally terrible. In big gold mining operations there are all kinds of territorial and environmental impacts, and the oft-repeated promises of excellence in technology and management have collapsed. Pascua Lama, a gigantic operation located in the high Andes between Argentina and Chile, has repeatedly promised that it would be an example of environmental responsibility. The reality was different, and in the face of their bad management and failure to comply, the corporation was fined and suspended by Chilean justice.
It is in addition one of the most inefficient extractive industries. Among the first fifty global producers, the extraction average is five grams of gold for a ton of rock removed. Given this, no one should be surprised that it is an activity involving drastic environmental impacts.
Nor does small mining escape these problems. In several Amazonian sites in Colombia, Brazil, Ecuador and Peru, those activities take place in the midst of social and environmental desolation. In regions such as the Madre de Dios (in the south of Peru), it has become one of the principal factors in the destruction of the Amazon basin and local violence. As it advances, it leaves a deforested jungle and highly contaminated water and soil.
To consider that activities are only at the level of individuals or families, is an illusion, because it ends up involving hundreds of thousands of people, resulting in added and multiplied impacts.The image of an isolated man bent over, panning gold from the sand of the river bed, is a thing of the past in many localities. Huge dredging machinery appears from no-where in remote corners of Amazonia. Furthermore, the growth of informal and illegal gold mining is possible only because it has become involved with the formal markets, and the gold extracted can end up with the big mining corporations.
In spite of this, the mining industry in general, and gold mining in particular, is widely defended. These projects are presented as economic blessings and successful exports. It would appear that the need for gold has assumed an enormous importance for human welfare and development, and that this justifies all this destruction. Can this be true? Does gold have uses that are indispensable for the quality of life of persons or necessary for some key industrial use? If we do not export gold, will some productive chain be annihilated? Will national economies fall apart? This is simply not the case.
Only ten per cent of the demand for gold involves technology or medical use. All the rest is divided between two uses: jewelry (a little more than 40%) and the financial sector, including coin manufacture, ingots in banks and other financial uses (also a little more than 40%). For example, in 2012 the global demand was estimated at 4,415 tonnes, divided between jewelry (1,896 tonnes), “investors” (1,568 tonnes), and purchases from central banks (544 tonnes). In other words, 90% of gold extracted on this planet is to sustain sumptuary uses, the exhibitionist consumption of jewels, or speculation and backing up finances.  It is hard to maintain seriously that welfare or global development depends on the mining of gold.
An important part of all the gold in circulation comes from re-use and recycling. But the demand is so high, that there is pressure for more gold mining. Consequently, in the past few years records have been made in the mining for gold; in 2012 this reached 2.982 tonnes. The largest gold miner was China (400 ton), and the first Latin American country to enter the global top list was Peru, but in the fifth place. China has also become the first consumer of gold on a planetary level. Their needs have quadrupled in the last decade, and there it is used principally for jewelry.
Thus we find that the depredation involved in gold mining does not supply any key industrial process, nor any basic need. Rather it is tied to the fashion for jewelry, especially for the consumption of wealthy families in China and other countries, or to the needs of financiers. If Latin America were to stop providing gold for these ends, there would be no collapse. On the contrary, the quality of life of many communities in our continent would be greatly improved.
The best way to describe what happens with gold is to revive the notion of “preciosities” proposed by Immanuel Wallerstein in the mid-1970s. Essentially, these goods are expensive because of their symbolic value. Those who possess them and exhibit them simply flaunt their own wealth and power. Other examples are diamonds, rubies and other precious stones, fur coats or caviar. They do not function in the same way as other primary resources that are commercialized globally, such as those destined for food or other basic needs, or as elements employed in industry, such as iron. Latin American gold mining is not even an “industry”, since no manufacturing process is involved.
This condition affects gold mining both in corporate hands and in the informal or illegal operations. We cannot forget that both of these are the same: extractive mining. Both have negative impacts on social, environmental and economic fields. And both are tied to global markets, working together, to export gold to the global market.
Nor can we forget governmental responsibilities that promote political and economic conditions involved in these extractive operations. They have provided cover for big enterprises, in their investments, in conceding territory, in ensuring exports, granting subsidies (most of them indirect or hidden), and have even defended them with police and military forces. They are also responsible for the fact that innumerable families have no other alternativesbut to earn their meagre wages looking for gold nuggets in the jungle, since the State has left them undefended, with no other viable productive options.
All this results in the fact that, once the operations of these thousands of mines are installed, the State cannot (or is unwilling to) control them. Both count on political power. The corporate sector is more subtle but stronger and more widely entrenched, working from company boardrooms and the press. The artisanal or illegal miners work through local caudillos, mayors, or even some legislators, as we have seen in Peru. Violence and illegality appear in both cases, although in different ways.
This situation has to stop, and this kind of development should be ended as soon as possible. The drama involved in the mining of gold and other precious items, be they large, medium or small, undertaken by private persons, cooperatives or the State must be resolved by putting an end to these activities. The response should be radical, since the environmental damage and the social impact continue to grow, and get more serious over time. These problems cannot be resolved with new mining technologies, socially responsible management or some kind of new public policy, since gold mining continues at a vertiginous pace. The reaction cannot wait for years until the consumption patterns of the industrialized countries and the Asian new rich come to understand that the flaunting of jewels makes no sense and the global demand falls. Nor can we wait until the financial world repents of their gold addiction. The solutions must come from Latin Americans themselves, since they are the ones who must defend their own population and their environment. As a consequence of this, the mechanism to be applied is evident: Latin America should declare a moratorium on gold mining.
This implies suspending new mining operations and dismantling those already in operation. At the same time we need a regional regulatory framework that prevents new gold entering the market, with which the informal sector would rapidly disappear. On the other hand, continental trade based on re-use and recycling of gold already extracted should be permitted and encouraged. At the same time the State should provide new direction for financial, political and human resources that have traditionally sustained corporate mining enterprises, in order to support dignified productive options for all rural families.
We should not fear the idea of a moratorium on gold mining. It is a necessary step to confront a situation that has become so dramatic, that we cannot wait, if we really want to defend human life and the environment.
– Eduardo Gudynas is an analyst at CLAES (Centro Latino Americano de Ecología Social), Montevideo. Twitter: @EGudynas
(Translated for ALAI by Jordan Bishop)