What is meant by "dirty" gold?
"Dirty" gold is an emotive phrase used by lobbyists and NGOs (non-governmental organisations) such as Earthworks and Oxfam USA, whose aim it is to promote improvements in the social and environmental aspects of gold mining (often referred to as "Sustainable Development"). Many of these aims are shared by the gold mining industry.
The gold industry as a whole (mining companies, refineries, manufacturers and retailers) is working to establish an industry framework to strengthen and validate its credentials in the sustainability arena.
1: Is gold mining a “dirty” industry?
Gold mining, and mining in general, is by its very nature a dangerous and intrusive industry. It involves companies making material changes to the landscape which can have an impact on neighbouring environments and communities. It is for these very reasons that the gold mining industry takes its responsibilities towards sustainable development so seriously.
There are already many strict guidelines in place to fully regulate the mining of gold and to protect the interests of indigenous peoples and the environment. The majority of gold mining companies have comprehensive environmental, social and ethical standards and communicate these through their annual reports (see WGC Members' Sustainability Programmes or links section to link to some of the major gold mining companies' reports).
Gold has been recognised as being a world leading commodity in terms of its sustainability. Citigroup's 2006 research report entitled "Towards Sustainable Mining" recognises gold mining as being a leading industry in terms of its sustainability record. This report includes an analysis of how sustainable development pressures are likely to impact the supply and demand for commodities.
In an attempt to compare the impacts (positive and negative) of a range of sustainability issues, Citigroup constructed a commodities league table shown below. Gold compares favourably when viewed against other commodities, receiving the highest rating in the table, benefiting most rom sustainability pressures such as its long life cycle and high recyclability.
Source: Citigroup
Furthermore, detailed research conducted by the ICMM (International Council on Mining and Metals), supported by UNCTAD (United Nations Conference on Trade and Development) and the World Bank, has shown that gold mining has a particular benefit to recovering economies (see www.icmm.com/publications/1405Ghana.pdf ).
2: Can I tell where gold comes from?
Around 2/3rds of gold used in refining and manufacturing of gold comes from gold mining. The remainder comes from recycling (old jewellery, bars, coins and industrial recycling, often referred to as "scrap"), which represents around 20% of gold supply, as well as from stocks of gold bullion held by banks (including governmental central banks), representing around 13%. Gold jewellery, bars, coins and industrial components are therefore made from gold derived from a number of sources, with the most important being gold mining.
So in terms of production, there is not a straight line from the mine to the retail shop, as there is, for example, with diamonds. Gold is a globally traded product, like a currency, and refiners, manufacturers and retailers buy gold for jewellery from the international market, often from refineries or banks. Defining the primary source of gold used in a particular piece of jewellery or any other product is therefore virtually impossible.
Some small scale companies in the gold market are able to buy limited amounts of gold from a particular mine (and therefore validate where it comes from), but this is not practical on a large scale.
3: How is the gold mining industry improving its sustainability record?
In June 2006, a multi-stakeholder group conducted a dialogue in Vancouver to discuss options for developing a system of independent 3rd party assurance for mining.
As a result of this dialogue, the "Initiative for Responsible Mining Assurance" (IRMA) has been established by a group of mining companies, including Newmont and AnglogoldAshanti, retailers, including Cartier, Tiffany, WalMart and Signet Group, non-government organisations, such as Earthworks and trade associations, such as Jewelers of America, ICMM and the Council for Responsible Jewellery Practices (CRJP), to further develop options for independent third-party assurance in the mining sector (see www.responsiblemining.net ).
A coordinating committee drawn from the group will facilitate a process for the identification of responsible mining standards and a governance model for the assurance system, and has set a goal of establishing initial standards and a system for governance by mid-2007.
This latest development followed in the spirit of a number of mining related initiatives including the Mining Certification Evaluation Project, the Framework for Responsible Mining, the World Bank's Extractive Industries Review, the MMSD Report and the Global Mining Initiative, the establishment of the International Council on Mining and Metals (ICMM) and the ICMM Sustainable Development Principles, and the Council for Responsible Jewellery Practices (CRJP), which are all assisting in moving the gold mining industry to a more sustainable future.
