The myths and literature of the world contain countless warnings about the dangers of lust for gold, but few people – mythical, historical or present-day – heed the warnings. The Prose Edda, the thirteenth-century CE compilation of Norse mythology that finds parallels in the Germanic Nibelungenlied, tells us that the dwarf Andvari had a magical ring that could make gold (he could also turn into a fish). The mischievous god Loki captured the dwarf in fish form and demanded all of his wealth, including the wealth-creating ring. The dwarf gave up the ring, but not before cursing it, saying that it would bring ruin to anyone who possessed it. The ever-practical Loki handed the ring over to Odin, who gave it to Hreidmarr, whose sons killed him for his riches – and Andvari’s curse lives on. In the oral history of the Coloma people of northern California, where the discovery of gold at Sutter’s Mill in 1848 sparked the California Gold Rush, a chief with whom Sutter tried to negotiate a treaty warned him that the gold he sought ‘belonged to a demon who devoured all who searched for it’.1 The demon is still devouring, and this chapter details how those myths of the destructive power of the lust for gold play out in the real world on real people.
The curse of gold seems to have a twisted sense of humour, and quite often in mythology and fiction, nobody profits from greed. For example, the first-century Roman poet Ovid added a unique episode to the story of Perseus in his Metamorphoses. Fresh from slaying Medusa, Perseus stops for a rest in the kingdom of the giant king Atlas and mentions his famous father, Zeus (he of the rain of gold). Atlas remembers a prophecy that a child of Zeus would steal the precious golden apples that grow in his magical garden, the garden of the Hesperides, so he attacks Perseus. The annoyed hero uses Medusa’s head to turn the gigantic Atlas into stone, and the gods decide to place the heavens on his rocky shoulders. Perseus departs without the golden fruit, and presumably nobody benefits.2
The helmeted Perseus bringing to Atlas the head of Medusa. Cherubino Alberti, after Polidoro da Caravaggio, 1570–1615, engraving.
This theme resurfaces in B. Traven’s novel The Treasure of the Sierra Madre (1927), which was adapted into an award-winning film starring Humphrey Bogart in 1948. In it, three destitute American miners strike it rich in post-Revolutionary Mexico, but greed and paranoia lead one miner to believe that his partners are going to rob him. He robs them first, but as with Atlas, his preemptive violence backfires: he’s ambushed by bandits who don’t realize that his saddlebags are filled with gold dust, and it blows away as he expires. Frank Norris’s novel McTeague (1899) ends on a similar note: McTeague, having murdered his miserly wife for the $5,000 in gold coins that she refused to share with him, attempts to escape to Mexico but is cornered in Death Valley by his erstwhile friend Marcus. The two fight, first over their last few drops of water and then over the gold. McTeague kills Marcus, but his hard-won riches won’t prevent him from dying of thirst. When Erich von Stroheim filmed the novel in 1924 as Greed, it clocked in at eight hours and cost the studio more than $600,000 (about $8 million today). Studio head Irving Thalberg removed von Stroheim from the project and had it cut to just over two hours. The excised footage was then rendered for its silver content.
Sometimes, after suitable punishment, the greedy are allowed to see the error of their ways. In the King Midas legend as recounted in Ovid’s Metamorphoses, Dionysus rewards Midas for his kindness to the satyr Silenius by granting one wish. The king requests that everything he touches turn into gold. The blessing quickly reveals itself to be a curse – Midas realizes he can no longer eat or drink, as food and drink turn to gold as soon as he touches them. In Nathaniel Hawthorne’s A Wonder-Book for Girls and Boys of 1851, Midas’ daughter turns to gold when he touches her. He repents his greed and begs Dionysus to withdraw the gift. Dionysus tells him to wash in the river Pactolus, which transfers the golden touch to the waters that would later make the real King Croesus very rich. Midas retires to the woods to worship Pan.
Midas is not the only legendary king whose greed and hubris led him to the brink of disaster. In the tenth- to eleventh-century CE Shāhnāmeh (book of kings), the national epic of the Persian-speaking world, the poet Ferdowsi tells us of a powerful and capricious king named Kay Kāvus. Goaded by an evil spirit disguised as a handsome youth, the king has a golden throne built for himself (illustrated on page 180), which is carried aloft by four hungry eagles lured into flight by chunks of meat tied to the throne. His goal is to fly into the heavens and learn their secrets; the king manages to fly all the way to China before the eagles are too exhausted to continue. The contraption crashes, but miraculously Kay Kāvus survives and repents.3
Another kind of myth about dangerous gold comes to us in the form of legends of lost mines and buried treasure. Among the most famous is the Lost Dutchman’s Mine, purportedly located in Arizona’s Superstition Mountains (although geologists doubt there is any gold in the area). The story goes that in the 1880s or ’90s, a German prospector named Jacob Waltz discovered a rich vein of gold but was attacked by Apaches (or by his greedy partner; the story has many different versions). He survived long enough to tell his tale to at least one person and left a crude map that unfortunately wasn’t accurate enough to pinpoint the mine’s location. There’s something to the legend – there was a real German immigrant named Jacob Waltz who actually did some prospecting in the general vicinity of the Superstition Mountains, and a gravestone helpfully but somewhat inaccurately identifies him as ‘the Lost Dutchman’ (he wasn’t lost; his mine was). And he just might have related the story of a lost mine on his deathbed, although he had given up mining nearly twenty years before. At any rate, it’s tempting to see the story as a harmless legend that helps drive tourism to the area; indeed, several thousand people a year head out into the mountains in search of the mine, and there’s a Lost Dutchman State Park for the less adventurous. But it can be deadly, too: several treasure hunters have died while searching, some under rather mysterious circumstances, including a 1930s adventurer whose skull was found with two bullet holes in it.4
French-language film poster for Treasure of the Sierra Madre (1948).
Walter Crane, ‘King Midas with his Daughter’, from A Wonder-Book for Girls and Boys by Nathaniel Hawthorne (1851). |
|
Oak Island, off the coast of Nova Scotia, is home to another mythical treasure trove, although what exactly is supposed to be there is unclear – the leading theory is that it is pirate booty, perhaps even Captain Kidd’s (probably mythical) lost treasure, which was advertised in the song ‘Captain Kid’s Farewell to the Seas; or, the Famous Pirate’s lament’ in 1701 as containing ‘two hundred bars of gold’. Other, even less plausible, theories include Marie Antoinette’s jewels and secret documents proving that Francis Bacon wrote the plays of Shakespeare. Treasure hunters have been digging on the island in a location known as the Money Pit for more than 200 years, discovering inexplicable signs of human workmanship like flagstones, layers of logs and, in some reports, stones bearing mysterious symbols. Each attempt has been more elaborate and costly than the previous one, and each attempt ends with the pit filling with seawater and the treasure hunters bankrupt – or, in at least six cases over the years, dead – all for a treasure that probably doesn’t exist.
A modern-day Money Pit was the Bre-x gold mining scandal in the mid-1990s. Bre-x was a mining company that claimed to have discovered an enormous gold deposit in Indonesia. Their stock price went through the roof, investors flocked to get a piece and it all came tumbling down when it emerged that Bre-x had fabricated the core samples by ‘salting’ them with gold. The company collapsed overnight, and investors lost billions of dollars.5
For as long as gold has been coveted, it has been stolen. The annals of the American West are full of tales of daring masked men stealing gold at gunpoint from horse-drawn carriages and then trains, but these were mostly small potatoes. In the biggest such theft, desperado Sam Bass and his Black Hills Bandits robbed a Union Pacific train of about U.S.$60,000 in newly minted $20 gold pieces in 1877, which would be worth a little more than U.S.$1 million today. On the other side of the Atlantic, the Great Gold Robbery of 1855 saw enterprising thieves steal 91 kg (200 lb) of gold from a heavily guarded train shipment; the thieves, who included guards and railway employees, had secured copies of the keys to the strongboxes containing the gold, and had replaced the loot with lead shot so nobody would notice a difference in weight. They were caught anyway.6
More sensational was the Brink’s-MAT heist of 1983, when a gang of thieves who had thought they were robbing a Brink’s warehouse of cash discovered £26 million in gold bullion. Although it was quickly obvious to authorities what had happened – like most big robberies, it was an inside job – none of the gold has been recovered. In 1984 the gang’s ringleader was sentenced to 25 years in prison, and in 1995 the High Court ordered him to pay back the missing £26 million. He was released from prison in 2000. Police suspect that much of the gold was melted down, and ‘it is claimed in some quarters that anyone wearing gold jewellery bought in the UK after 1983, is probably wearing Brinks Mat.’7 One might be tempted to believe that the gold was cursed – the deaths of as many as twenty people are linked to this fateful robbery, including several unsolved murders of suspected gang members and the death by stabbing of a policeman who was investigating the robbery. The most famous is Charlie Wilson, one of the thieves in the infamous Great Train Robbery of 1963, who was engaged in laundering some of the proceeds from the Brink’s-MAT job. An unknown hitman shot him and his German Shepherd outside his home in Spain in 1990.8
Shah Kay Kāvus Attempts to Fly to Heaven, in a Shāhnāmah manuscript, Iran, Il-Khanid period, gold and ink on paper, opaque watercolour.
These gold-fever tragedies tend to be small, affecting only a few people (at least physically). But the reality of gold extraction is much more frightening. Gold mining at any level beyond simple panning leads to environmental damage, and the great amount of resources necessary to reach veins deep beneath the surface means that mining companies may be less interested in the welfare of their employees.
Mining, especially underground, is a dirty, dangerous job. The U.S. Bureau of Labor Statistics warns that even in strictly controlled, modern settings, ‘unique dangers include the possibility of cave-in, mine fire, explosion, or exposure to harmful gases. In addition, dust generated by drilling in mines still places miners at risk of developing either of two serious lung diseases: pneumoconiosis, also called “black lung disease,” from coal dust, or silicosis from rock dust.’ In less controlled settings, it can be a lot worse.9
One of the earliest accounts of the hardships of mining comes from first-century BCE Greek historian Diodorus Siculus. In his massive Bibliotheca historica, he describes the doomed slaves who worked Nubian gold mines in Ptolemaic Egypt:
And those who have been condemned in this way – and they are a great multitude and are all bound in chains – work at their task unceasingly both by day and throughout the entire night, enjoying no respite . . . All without exception are compelled by blows to persevere in their labours, until through ill-treatment they die in the midst of their tortures. Consequently the poor unfortunates believe, because their punishment is so excessively severe, that the future will always be more terrible than the present and therefore look forward to death as more to be desired than life.10
Using slaves to mine gold was not an uncommon occurrence: in the 1770s the Tokugawa shogunate in Japan sent vagrants to work as water carriers at the gold mine in Sado province.
The discovery in 1886 of immense goldfields in the Witwatersrand region of Transvaal in present-day South Africa set off decades of strife. The area had been colonized by fiercely individualistic Boers (from the Dutch word for farmers), a mix of Dutch settlers and French Huguenots and Calvinists who had fled religious persecution in Europe. The Boers lacked the population necessary to work their new gold mines, so they reluctantly allowed ‘outlanders’, mostly British miners, to be hired. The outlanders quickly outnumbered the Boers and began demanding political and economic rights, which the Boers were reluctant to grant since they would lose control of the state they had founded earlier in the century to escape British rule. A British-backed attempt to overthrow the Boer government failed in 1895, and when negotiations collapsed in 1899, the Boers demanded that Britain withdraw the troops that had massed on the borders of Transvaal, while the British demanded that the Boers immediately grant full citizenship to British settlers in Transvaal. War broke out, a costly, bloody conflict in which the outnumbered Boer army used guerrilla tactics against the much larger British army, to which the British under Lord Kitchener responded with a scorched-earth policy of destroying Boer farms and placing civilians in concentration camps where more than 25,000 Afrikaner women and children died of disease and malnutrition.11
Between 1904 and 1907, almost 64,000 indentured Chinese men on three-year contracts travelled to the goldfields to work in mines as part of a short-lived experiment to jump-start the ailing industry, which was still reeling from war. By 1910 the last of these workers were repatriated. During this short time, they suffered horrific living and working conditions (such as being underground for ten hours of the day), physical abuse by the white mine owners and brutal treatment by Chinese mine police hired ostensibly to keep order but more likely to deal opium, run prostitution and gambling rings, and either kill or drive to suicide their unfortunate debtors.12
The California Gold Rush of 1849 survives in popular history as a wild festival of boom and bust, pitting hardy and enterprising (white) men against fate and nature in a microcosm of Manifest Destiny personified. Beloved tales by Mark Twain and Bret Harte romanticized the squalor of the mining camps and made folk heroes of the plucky and individualistic miners, even though the bulk of the gold was extracted by mining companies. And until relatively recently, historians tended to glamorize it as a historic event, an unprecedented mass movement of people, without addressing the consequences. Although some people did get rich, most people’s reality was much grimmer, poorer and more violent.
‘The Used-up Man’, wood engraving, 1853, caricature of a failed California gold miner. |
|
Part of a tomb wall with a painted representation of Nubians offering gold nuggets and rings to the (unseen) king, c. 1400 BCE.
One in twelve Forty-niners died on the way to the goldfields, while there or on the way back. Death could come through illness, accident or violence. In an environment where most of the population was male and armed, the murder rate skyrocketed to as high as 500 per 100,000 inhabitants, or almost 100 times the current murder rate in the United States. One physician observer estimated that between 1851 and 1853, one-fifth of the people who arrived in California died within six months of arrival. In the absence of police or courts, vigilantism ruled: between 1849 and 1953 there were more than 200 lynchings in the goldfields.13
Miners of all races faced hardships, but non-white miners fared much worse than whites. Miners born outside the United States had to pay a steep tax to work, but payment did not mean freedom from violence. Mexican miners were beaten and robbed of their holdings, and in one camp sixteen Chilean miners were executed on trumped-up charges. Chinese miners were barred from testifying against whites in criminal and civil trials, forcibly evicted from their claims and sometimes murdered. A committee of the California state legislature acknowledged in 1862 that ‘it is a well known fact that there has been a wholesale system of wrong and outrage practiced upon the Chinese population of this state, which would disgrace the most barbarous nation upon earth.’14
Utagawa Hiroshige, Gold Mine, Sado Province, September 1853, ukiyo-e print.
‘Things as they Are’, picture of the gold rush in California, 1849, by Henry Serrell and S. Lee Perkins, lithograph on wove paper.
The worst treatment was reserved for Native Americans, who numbered about 120,000 in California in 1844 but only around 30,000 by 1870. (During the first ten years of the rush, the white population jumped by 2,000 per cent.) Native Americans died from disease, violence and starvation as their traditional lands were overrun by white hunters and then farmers. They were even left out of the story entirely – it was probably workers from the Maidu tribe, not their white overseers, who discovered the first nuggets of gold at Sutter’s Mill in January 1848, sparking the gold rush. The woeful story of what one tribe, the Wintu of northern California, suffered at the hands of white settlers in just three years serves to enscapulate the Native experience during the gold rush. In 1850 whites gave a ‘friendship feast’ where they served poisoned food, killing 100 Wintu; in 1851 miners burned a Wintu council house, killing 300; and in 1852, in the Bridge Gulch Massacre, whites attacked a Wintu camp, killing 175. Peter Burnett, the first governor of California, reflected the opinions of many white Californians when he said ‘That a war of extermination will continue to be waged between the races, until the Indian race becomes extinct, must be expected.’15 Speaking of this policy of extermination, the historians Robert Hine and John Faragher concluded, ‘It was the clearest case of genocide in the history of the American frontier.’16 This was par for the course for gold rushes – in the decade after the discovery of gold in Victoria and New South Wales, Australia, the white population rose more than 400 per cent while the aboriginal population fell to less than half of what it had been.17
Mining Life in California – Chinese Miners, from Harper’s Weekly, I/40 (3 October 1857), p. 632.
Although California outlawed slavery, thousands of Native Americans were virtually enslaved under the Act for the Government and Protection of Indians of 1850. This act enabled white employers to lease Native American convict workers, indenture free Native Americans overcome by personal debt, and kidnap Native children into private homes as exploited ‘apprentices’ who could legally remain bonded into their late twenties. An illegal slave trade quickly emerged to provide sufficient Native American children to work as domestics or farmworkers, making up for the shortage of women and children in the male-dominated gold rush.18
Native American groups in other parts of North America suffered at the hands of whites lusting after gold. The 1868 Fort Laramie Treaty between the United States and the Cheyenne and Sioux tribes of the Great Plains recognized the ownership by the Lakota of the Black Hills of South Dakota. But an exploratory survey by General George Armstrong Custer found large gold deposits, and President Ulysses S. Grant decided not to enforce the terms of the treaty. When white miners poured into the Black Hills and inevitably came into conflict with the Lakota, the U.S. Government attempted to purchase the land; when that failed, the U.S. resorted to military force. The best-known episode of this war was the battle of the Little Bighorn, where a confederation of Lakota, Northern Cheyenne and Arapaho led by Sitting Bull and Crazy Horse wiped out Custer and his 7th Cavalry, but the victory was short-lived, and the U.S. took control of the land.19
Gold rushes devastate the natural environment for years, even centuries. In California the influx of hundreds of thousands of people meant that the human population overran natural areas, leading to the near-extinction of species like the grizzly bear, the golden beaver, the tule elk, the pronghorn and many others. The miners needed to eat, and cattle and sheep quickly numbered in the millions, devouring native grasses and denuding vast swathes of land. (This is typical of mining: a recent study of western Ghana found that surface mining has resulted in the loss of almost 60 per cent of its forests and almost half of its farmland.)20
H. Steinegger after S. H. Redmond, General Custer’s Death Struggle: The Battle of the Little Big Horn, 1878, lithograph on paper.
After 1860, when larger mining companies adopted hydraulic mining, entire hillsides were washed away. The resulting silt and debris washed downstream, clogging rivers and causing massive flooding, such as a flood in 1862 that inundated the grounds of the state capitol building in Sacramento. Still, it wasn’t until 1884 that hydraulicking was banned in California, a testament to the lobbying power of the mining companies.
The devastation didn’t end when the hydraulicking ended. Mining during the California Gold Rush introduced as much as 36.3 million kg (8 million lb) of mercury into the environment, and there are lakes and rivers where the fish remain unsafe for consumption. And mercury use is still common among artisanal gold miners around the world, leading to continuing health problems. For example, the use of mercury in small-scale gold rushes in the Amazon basin has led to mercury poisoning among indigenous peoples who eat fish from polluted waters, as well as among the miners who lack proper safety equipment and breathe in mercury fumes. Mercury is linked to impaired cognitive and neurological development in children – and the children in a recent sample of the indigenous population in one section of Peru notorious for illegal mining had mercury levels three times higher than what is considered safe. In 2013, 140 countries signed the Minamata Convention on Mercury, which sought to limit mercury use internationally. The treaty prohibits new mercury mines, mercury-containing batteries and certain other electrical items – but does not require the banning of mercury in small-scale gold mining.
Not every gold rush leads to such awful consequences. In the so-called Automobile Gold Rush during the Great Depression of the 1930s, non-professional gold-seekers picked over the areas that had been depleted during the California Gold Rush almost a century earlier. The federal government encouraged the activity, printing booklets advising amateurs on how to build and operate basic gold-panning equipment and rationalizing that it was better for people to be roughing it in the wilderness than waiting on a bread line.21 However, misery-free rushes are the exceptions to the rule.
It is important to remember that gold rushes aren’t a thing of the past. As the price of gold continues to rise, the search for new, untapped goldfields continues. Even small-scale gold rushes that quickly peter out can cause human and environmental harm. In 2007 a Brazilian math teacher posted on his website about miners in Apui scooping up handfuls of surface gold. Within weeks thousands of prospectors arrived and the boomtown of Eldorado do Juma sprang up, where the bar owners and hardware dealers made more money than the miners. Some did strike it rich, including one elderly miner who dug up $19,000 in gold in a little over two weeks. But as in most rushes, most miners went away discouraged – or contracted malaria, which made a resurgence in the area.22
Although mercury is (mostly) outlawed, other chemicals used in industrial mining can wreak havoc on the environment and the people who live there. On 30 January 2000, approximately 100,000 cubic metres of wastewater burst through a dam into the Someş River at the Aurul gold mine in Baia Mare, Romania. The water was contaminated with an estimated 100 tonnes of cyanide, the byproduct of a process called gold cyanidation, which is used to extract gold from low-grade ore. As it travelled more than 3,000 kilometres (1,865 miles) downstream to the Tisza River in Hungary and thence to the Danube and out into the Black Sea, it polluted the drinking water of 2.5 million people and killed more than 1,400 tonnes of fish.
The Aurul mine had been in operation less than a year, but gold mining had been going on for more than 2,000 years – since the time of the Romans – in Baia Mare. But it wasn’t until the twentieth century that the area became hopelessly polluted. The World Health Organization reports that some adult residents’ lead levels are more than twice as high as what is considered safe, and some children’s lead levels are six times as high. The Săsar River, which flows through Baia Mare, had already been known as a ‘dead river’, with arsenic and lead levels hundreds of times higher than permissible.23
These environmental and health issues have plagued the gold-mining industry since its inception, but the adoption of a process known as cyanide heap leaching in the 1960s raised the environmental stakes. In this process a mining company creates a heap of crushed low-grade ore and pours a cyanide solution over it. The cyanide binds to the gold in the ore, making it soluble in water; the water is collected at the bottom of the heap and the gold removed by one of several chemical processes. Extracting enough gold to fashion a single wedding ring can produce as much as 20 tonnes of waste material.
That waste material is stored in ponds, behind dams and in caves and other natural sites. Leaks are distressingly common. A dam break in Guyana in 1995 sent 2.5 billion litres of cyanide-tainted water into the Essequibo River, the country’s primary waterway. A tunnel collapse in the Philippines in 1996 filled a 26-kilometre (16-mile) river with 4 million tonnes of gunk containing cyanide, cadmium, lead and mercury. In Papua New Guinea an American company dumps tailings into a deep trench in the ocean via a pipe – which broke in July 1997. And even when it’s not broken, it leaves hundreds of millions of tonnes of waste in the ocean, smothering life around it.24
Efforts to ban cyanidation have been largely unsuccessful, although there are exceptions. In 1998 a voter-initiated ban passed in Montana and was upheld by the state supreme court, but voters in several Colorado counties and one South Dakota city, who approved similar measures, were not so lucky, as courts ruled that the measures violate state and federal laws, respectively. Large entities like the European Union declined to ban cyanidation outright, but individual countries such as the Czech Republic and Costa Rica have outlawed it.25
So why is gold cyanidation still being used? As dangerous as it is, it’s safer than mercury, which had previously been the most common method of extracting gold from ore. It’s also the cheapest and most efficient method known thus far. But hope sometimes springs from surprising places, like a test tube in a chemistry lab at Northwestern University in Evanston, Illinois. In 2013 the postdoctoral fellow Zhichang Liu mixed a solution of gold salts with a solution of alpha-cyclodextrin (derived from cornstarch) and was shocked to discover that the process isolated the gold more efficiently and less toxically than cyanide. As of this writing, his team, led by the Scottish chemist Sir Fraser Stoddart, is in the process of developing a practical system for separating gold from scrap alloys safely.26
The price of gold has skyrocketed in the past few decades for a few related reasons. Not much new gold enters the market, so any increase in demand for the limited supply means that the price goes up. In uncertain economic times like the worldwide financial crisis that hit in 2008, investors turn to gold in the belief that it will retain value even if currencies devalue. And the exponential growth in economies like China and India means that more people have more money to invest. India has tried to crack down on gold importation by placing punishingly high import duties on it, but this has just led to an increase in smuggling – leading to recent amusing cases like $1.1 million in gold being discovered in an aeroplane toilet, or the traveller who was caught with 467 grams (16.5 ounces) of gold hidden in brassieres.
Conservative U.S. commentators including Glenn Beck and Sean Hannity have been urging viewers to put their money in gold for the past several years. Beck’s investment of choice was antique gold coins sold by Goldline International, which happened to be one of the sponsors of his TV and radio shows. In 2012 the company was ordered by a California court to refund $4.5 million to defrauded customers, who were misled about the relative value of the coins versus bullion.27
Playing the gold markets can make investors rich, but it can also backfire. Between 1999 and 2002, British Chancellor of the Exchequer (and later Prime Minister) Gordon Brown infamously auctioned off more than half of Britain’s gold reserves when gold was at a historic low. When the price shot up, it left Brown open to charges that he had ‘lost’ Britain billions of pounds. It’s easy to criticize Brown in hindsight, as the gold he sold is now worth billions more than it was when he sold it. But the situation is more complicated than that. The securities Britain invested in with the proceeds of the sale are worth a great deal today, albeit less than the gold would have been. There are rumours that Brown did it to stave off a bank failure, and it’s possible to argue that he did the right thing – Alan Beattie of the Financial Times writes, ‘Let speculators go gambling on a shiny metal, if they want to. For most governments in rich countries, holding gold remains a largely pointless activity.’ He argues that expecting governments to play the market, especially one as volatile as the gold market, is foolish. The debate will likely continue to rage.28
The increase in demand for gold has real consequences. These are evident in three regions that help us understand the human and environmental cost of the lust for gold in the twenty-first century: Peru, Papua New Guinea and the Democratic Republic of Congo.
A gold rush has been underway since 2000 in the Madre de Dios region of Peru, and illegal gold mining has destroyed more than 40,000 hectares of Amazon forest. There are an estimated 30,000 illegal miners in the region; most of them came because mining or providing services to miners is the only way they can make enough to feed their families. A U.S.-based research group reported incidences of forced labour, child labour, disregard for workers’ health and safety, and sex trafficking of young girls forced into prostitution.29
The Porgera gold mine in Papua New Guinea dumps 6 million tons of waste a year into the Porgera River, sending heavy metals downstream in quantities that would be illegal in more developed countries. More than 50,000 people have flocked to the area since the mine opened in 1990, most of them to pick through the mine’s tailings. For years, local residents have charged that mine security personnel have killed and physically abused these ‘illegal’ miners.
The Canadian mining giant Barrick Gold bought the mine in 2006, but little changed. Human Rights Watch charges Barrick’s security forces with widespread abuses including frequent gang rapes of illegal miners, charges corroborated by research teams from Harvard University, New York University and the United Nations. Tellingly, even after the Harvard/NYU team presented similar findings to the Canadian government, in October 2010, under intense pressure from Canadian gold mining companies, the House of Commons failed to pass a law that would have required a modest level of monitoring of the overseas human rights records of Canadian companies. Although Barrick took steps to rein in the abuse, riots broke out as recently as December 2013 after private security forces and government police killed four local residents.30
Conditions in the Democratic Republic of Congo (DRC) are even worse. Three and a half million people died through violence, exposure, hunger and lack of medical assistance in the Second Congo War of 1998, in which Rwandan and Ugandan forces fought the Congolese dictator they had installed in 1996. After a series of treaties in 2002 ended most of the fighting, violent conflict persisted in the northeastern Ituri region, home to one of the world’s richest goldfields. Large-scale massacres were common, and the BBC estimates that between 1998 and 2006 more than 60,000 people died violently in Ituri alone.
The conflict wasn’t just fuelled by local rivalries. Multinational corporations seeking the rich gold deposits negotiated with armed groups with records of war crimes and human rights abuses: the corporations provided financial and logistical support for the militias, and the militias provided access to the gold. This set the stage for a pipeline of ‘conflict gold’ from the wartorn area, which funnels millions of dollars’ worth of Congolese gold through Uganda to European refineries. These European companies choose to look the other way, ignoring the fact that their refusal to investigate the source of the gold means that war criminals can continue to exploit the people of the DRC.31
Wealthy nations are taking steps to reduce the amount of harm that gold mining causes. In 2013 Swiss authorities launched a criminal probe of Swiss refiner Argor-Heraeus, charging that in 2004 and 2005, the company had processed three tons of ore that came from armed groups in the DRC. In the U.S. the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires companies to publicly disclose any use of conflict minerals from the DRC or adjoining countries, imposing a deadline of 2016 for companies to conduct a thorough independent inspection of their supply chain for conflict minerals. Mining companies can subscribe to the Voluntary Principles on Security and Human Rights, an initiative by governments, non-governmental organizations and industry to guide extractive companies on how to maintain the safety of their operations, observe human rights and respect fundamental freedoms.
Protestors outside Barrick’s annual general meeting, Toronto, 2008.
Since 2005 more than 400 jewellery companies have pledged not to buy gold from companies with poor environmental and human rights records after pressure from activist groups including Earthworks and Oxfam. Members of this voluntary Responsible Jewellery Council vow to track where their gold comes from. But because it’s voluntary, there’s no enforcement if companies fail to comply, and critics charge that compliance is minimal.
Public opinion might be the most effective tool in getting companies to take more responsibility for where they get their gold. The global consulting firm PricewaterhouseCoopers surveyed almost 700 companies about their efforts to comply with the new Dodd-Frank rules in July 2013. A large portion of the companies stated that they were concerned about negative consequences on their revenues – through loss of customers, boycotts and harm to their brand’s reputation – if they failed to comply.32
However, none of these efforts by industry associations, governments and non-governmental organizations get at the heart of the problem – gold mining is inherently bad for the environment and the people doing the mining, and as long as some people are willing to pay premium prices for gold, other people will do the dirty work of digging up more of it.
We opened this book with a chapter on humanity’s first use of gold – wearing it. Even after millennia of our interaction with gold, and all the uses that we’ve found for it, the vast majority of the gold mined each year goes to ornament; indeed, some estimates suggest that all the gold required for industry could come from recycling unwanted jewellery and defunct electronics. Thus it is our continuing desire to wear gold that leads to essentially the entire environmental and human price. As Stephanie Boyd wrote in her New Yorker profile of Madre de Dios, ‘If the real cost of gold is environmental destruction, teen-age prostitution, and forced labor, maybe the gold wedding band isn’t such a great symbol of love and trust.’33
