All that glitters
All that glitters is not gold, the saying goes, but there’s a particularly burnished glint to most of the world’s metals at the moment. Fuelled by what has been described as a ‘super-commodity’ boom, Klondike-style rushes are springing up in pursuit of gold and the Earth’s other metals.
As Geographical went to press, the price of gold stood at an all-time high (US$1,923 an ounce on 6 September). Meanwhile, most of the ten most valuable metals that we remove from the planet’s crust are either at or near their record prices. The rate at which these metals are being taken out of the ground is, in almost all cases, unprecedented, powered by ferocious global demand from China, Brazil and other emerging nations.
In many respects, this is good news. The resources are often in developing nations, and the combination of high demand and high prices has the potential to raise living standards for some of the planet’s most impoverished people. On the other hand, the mining industry’s track record isn’t encouraging.
For decades, it has been excoriated by environmentalists and social-welfare organisations. Mining may be a dirty job, but no mining company ever suffers a shortage of labour. Wages are generally low, and social damage and environmental pollution often outweigh benefits to local communities.
Gold, thanks to its mercurial place in the human consciousness, will always catch the eye, but the boom affects most other metals. According to Sweden-based mining analysts the Raw Materials Group, all of the world’s most valuable metals currently enjoy record production. Last year, the total gold yield was 2,500 tonnes (in 1984 it was just 1,460 tonnes), approaching its highs of the turn of the 20th century. Copper is at an historic high (16,050 tonnes, double that of 1984). The same goes for iron (1,814 million tonnes, compared with 815 million tonnes in 1984), silver (22,500 tonnes, up 176 per cent since 1984), nickel (1,525 kilotons; kt), lead (4,100kt), uranium (60 tonnes) and zinc (12,100kt). Bauxite production has been running at a high of 200 million tonnes or above for the past three years, compared with a 1984 baseline of 92 million tonnes.
The sceptical view is that these mining revenues will generally be squandered by governing elites, exacerbate corruption, or, as happened in the Democratic Republic of the Congo (DRC) and Sierra Leone, spark conflicts. This concern has reinvigorated talk of ‘the resource curse’, the view that natural resource abundance is, on balance, more of a hindrance than a driver for development.
Amazon annihilation
One of the major areas of worry is not, as you might expect, the large international corporations, or even regional ones, but small-scale, or artisanal, mining. Since 1998, artisanal mining has been responsible for 20–30 per cent of global gold production, according to Jennifer Swenson, assistant professor of geospatial analysis at Duke University’s Nicholas School of the Environment. Recent research by Swenson and colleagues, using remote sensing, has linked the record price for gold with a six-fold increase in deforestation in parts of the Peruvian Amazon.
Most of the gold mined artisanally in the Madre de Dios region comes from alluvial deposits in the channels and floodplains of Amazon tributaries. According to Swenson, mining deforestation, averaging 1,915 hectares a year since 2006, outpaces nearby settlement deforestation, as miners blast river banks and clear floodplain forests to expose potentially gold-yielding gravel.
Gold is unique, Swenson points out, because it can be mined with relatively low technology, making it accessible to unskilled workers. ‘There are bigger companies involved, but it’s really a case of poor migrants coming down from the high Andes to the lowlands. It has taken everyone off guard – this is spontaneous artisanal mining and it has got so big, so quickly. Huge areas of primary forest are being cleared spontaneously. The untouched forests have completely gone. Usually when you get deforestation in the Amazon, people settle or graze cattle, there’s still an ecosystem. But the forest has been completely annihilated. You’re left with ponds laden with mercury. I can’t see how these areas will ever recuperate.
‘It’s open season,’ she continues. ‘The area is changing so quickly, there will be lots of repercussions. There’s already child slave labour, an increase in prostitution.’
Messy issue
Artisanal gold mining also brings with it alarming side effects from the use of mercury. Small-scale gold mining is the second-largest source of mercury pollution, behind the burning of fossil fuels, and is responsible, says Swenson, for one third of all mercury released into the environment. Miners mix mercury with gold-containing ore, separating it out from the rest of the ore as the heated mercury is vapourised.
Mercury from artisanal mines travels widely, settling in sediments and moving up the food chain into fish, fish-eating wildlife and humans. According to the UN Environment Programme, ten million miners and their families in Brazil, Venezuela, India, Indonesia, Papua New Guinea and Zimbabwe suffer health problems from mercury used in artisanal mining.
Events in Madre de Dios frustrate many observers who feel passionately that artisanal mining and the metals boom can be a force for good. ‘Artisanal mining is very tricky, it’s a source of tension between the mining industry, communities and governments,’ says Jim Cust, a PhD student at the Oxford Centre for the Analysis of Resource Rich Economies. ‘There’s no easy answer. A lot of practices around artisanal mining have big questions over safety, and wider economic implications for conflict and strife. On the other hand, they can provide opportunities for bottom-up economic growth in places where options for peasant farmers are limited.’
Mitigation efforts often amount to little more than airborne patrols by under-resourced law officials or policing of porous land and water borders. ‘A paper structure for environmental-impact assessments exists, but the price of gold is so high that people just ignore it,’
says Swenson. ‘Governments are limited by resources and geography. It’s a really messy issue. If governments somehow managed to stop small-scale mining tomorrow they would be left with large migrant populations on their hands that had no means to survive.’
Bigger impacts
The sheer speed with which mining set-ups are emerging has left everyone playing catch up. In South America, Swenson has reported how professional hunters are stockpiling wild game for miners in Nouragues Natural Reserve in French Guiana, and that mining threatens national parks in seven countries across the continent. The IUCN recently reported that one in four of Africa’s World Heritage sites were threatened by commercial mining or fossil fuel projects, including Selous Game Reserve (Tanzania), and Aïr and Ténére Nature Reserve (Niger).
‘The link is the increase in gold prices, and the fact that the easy oil and gas is running out,’ says Mariam Kazam Ali of the IUCN’s World Heritage Programme. ‘The exploration stage causes damage – they put dynamite in – but the bigger impacts are secondary; people move into an area, they have to eat, they have low-paying jobs, so often they poach wildlife. It’s very difficult to keep pace. Often the manpower to do so isn’t there. Watchdogs such as us may only have a few people in an office. It’s a real worry.’
Trade-offs may offer a way out. Ali points to a proposal for a uranium mine on the perimeter of Selous National Park in Tanzania. ‘It’s worth two per cent of GDP to Tanzania, so it’s significant,’ she says.
‘You might argue that if the uranium mine proceeds, you could compensate by adding another protected area where there have been problems with development.’
But flexibility in all cases would be inappropriate, Ali warns. ‘World Heritage sites have a strong no-development policy, and it’s there for a reason,’ she says. ‘These sites are the best of the best; they cover just one per cent of the world’s surface, and they’re meant to be protected for our children’s children.’
Resource challenge
A lot is at stake, and the pressure on these World Heritage sites may just be the start of the resource challenge for Africa. A World Bank assessment, The Changing Wealth of Nations, concludes that subsoil resources are worth around US$125,000 per square kilometre in OECD nations, but just US$25,000 in sub-Saharan Africa, suggesting that the continent has so far been largely overlooked. ‘Interest in sub-Saharan Africa has, until now, been much lower than elsewhere,’ says Cust. ‘From a geological point of view, the resources in the two areas are likely to be similar, so that suggests that we will see a boom in activity in sub-Saharan Africa.’
Such activity won’t necessarily be all bad news. There’s little doubt that mining has the potential to be a force for economic good, and it would be simplistic to characterise the industry as universally detrimental to the poor global south. Diamond mining has transformed Botswana over the past 20 years from one of the world’s poorest to among Africa’s most prosperous countries. Between 1990 and 2003, poverty in Chile fell by almost half – and by 60 per cent in the key mining region of Antofagasta, according to the International Council on Mining and Metals (ICMM).
Things are rarely so straightforward, however. The ICMM, which was established in 2001 to improve sustainable-development performance in the industry, says that more than 50 countries are significantly dependent on mining. These countries are mainly developing or transition economies and are home to more than 3.5 billion people, of whom 1.5 billion live on less than US$2 per day.
The polarised view of the industry has historically hampered progress. ‘From the 1980s onwards, the environmental movement portrayed mining as the big baddie. The industry didn’t see itself as evil, it saw itself as providing resources the world needed. I suspect the answer is somewhere in-between,’ says Anthony Hodge, chairman of the ICMM, which represents 19 mining companies and 30 affiliated mining associations.
Hodge acknowledges that mining must now embrace the full life cycle of a mine project. ‘Many of the greatest problems facing the mining industry today stem from the fact that this hasn’t been done in the past. During the 1960s, the mine design process was limited to the end of operations,’ he says.
‘The worst situation is where there’s serious corruption all through the process; one party gets all the benefits, someone else gets all the costs and another all the risks, and no-one takes responsibility.’
The end of impunity?
Too often, mining has had a shocking record on safety and social rights, but optimists argue that the emergence of social-justice movements, ethically aware shareholders and consumer power mean this doesn’t have to be the case. So, is it possible that many resource-rich countries face a singular opportunity, a generational window, to escape persistent poverty and achieve economic growth?
‘There’s a big push internationally from users of metals,’ says Hodge. ‘Microsoft, Intel, computer manufacturers, the electrical industry, car makers – they increasingly demand that resources provided to them by producers, smelters, refiners, are sourced in a socially responsible fashion.’
The political oversight also has more teeth nowadays. Last year, the US Congress approved the Cardin-Lugar transparency amendment, which will require a high degree of disclosure of payments by resource-extraction companies registered in the USA with the Securities and Exchange Commission.
Corruption is being addressed, too. The Extractive Industries Transparency Initiative is a coalition of governments, companies, civil-society groups, investors and international organisations. Its aim is to strengthen governance by improving transparency and accountability by overseeing the verification and full publication of company payments and government revenues from oil-, gas- and mineral-extraction. So far, ten countries are compliant, (including the Central African Republic, Timor-Leste and Liberia); and 24 others (such as Indonesia, DRC and Kazakhstan) are candidate countries.
But, as Cust, points out, transparency alone won’t solve the problem. He’s involved in another project, the Natural Resource Charter, drawn up by a group of lawyers, economists and other experts assembled by Professor Paul Collier, director of the Centre for the Study of African Economies at the University of Oxford. Cust describes this as a ‘living document’ that will evolve in parallel with the latest best practice and global standards. ‘The intention is to cover the entire chain, from discovery, to concessions, processing, tax revenues and the spending of revenues,’ he says.
‘The aim is to help countries better harness their natural resource wealth towards poverty reduction and sustainable growth, and inform citizens about the importance of the debate, so that they can hold their governments to account,’ he continues. ‘Mining companies recognise that they can no longer operate with impunity away from their headquarters because this will come back to bite them.’
Shift in values
But then there’s China. Cynics argue that because China is driving much of the demand, its poor human rights record will mean that efforts to improve governance will come to nought.
But Hodge argues that the concerns about environment and social justice we’ve see in the West are ‘finding an expression in China’.
On a recent visit to China, Hodge says, he was surprised at the level of commitment to aspire to Western mining standards. ‘I’m not naive – plenty of Chinese mining practices leave a hell of a lot to be desired,’ he says.
‘Can they do it on their own? I doubt it, and I also doubt that any Chinese company could currently meet the ICMM’s standards.
‘But there is a big push to be part of the modern age,’ he continues. ‘Chinese companies are increasingly international, and when they work with companies in the West, they have to address the standards of the West. They also have a tremendous need for raw materials.’
Fundamentally, of course, mining companies are driven by the business, rather than the moral, arguments of ethical operations, but Hodge argues that the underlying reasoning reflects more significant societal changes. ‘If this doesn’t make business sense, then you will meet a tremendous amount of resistance, but it’s not “either/or”,’ he says. ‘It has to be both good business sense and the right thing to do. Ethical foundations and business sense go hand in hand. There has been a shift in world values over recent decades. There’s no single mechanism, but it’s vital to have support from the community. You can’t legislate for that.
Huge phenomenon
The worry is that the current unprecedented global boom risks leaving such good intentions behind. ‘The recent trend is spontaneous and rapid,’ admits Hodge. ‘I’m concerned that some people will come in, play the game and not understand what we are trying to do.’
Thanks to the price of gold – a commodity that, in physical terms of how much has ever been mined, might add up to a cube that just covers a singles tennis court – and other metals, the world is going through a truly, extraordinary and transformational period, described by Cust as ‘a super-commodity cycle’.
‘It’s a huge phenomenon and, inevitably, there will be more horror stories,’ he says. ‘Nobody can pretend that we or others can solve these problems, or even keep a lid on them. That’s naive. But the potential exists for a lot of good. Governments take these challenges seriously. Civil society, the media and citizens all have vital roles. New technologies, such as mobile phones and the internet, can be vital tools in this battle.’
Cust points to success stories, such as the USA and Canada, that have thrived on natural resources. ‘History hasn’t been kind to resource-rich countries, but to talk about a resource curse is simplistic,’ he says. ‘There’s no inherent curse – that argument suggests it’s better to leave the resource in the ground where it won’t do any harm and that somehow the world will then be a better place. That’s foolhardy. Countries have an ethical responsibility to harness the resources for their citizens.
‘The level of governance of a country where a resource has been identified can tell us a lot about which way it’s going to go in terms of prosperity or problems,’ he continues. ‘Institutions matter. You need to strengthen that governance, it’s what you make of that resource.’
Laborious process
Reining in the bad players and making sure everyone gets a fair slice of the pie will be a laborious process, admits Hodge. ‘In an ideal situation, in 20 years’ time, minerals and metals will be an industry that really knows how to listen, and not tell the world what to do,’ he says. ‘That would be an outstandingly good thing. In reality, every company has areas on which they can dramatically improve. I recognise there’s a long way to go before we get to that point.’
Swenson suggests that only a determined international effort at regulation can bring the situation under control. ‘You need some international policy to control resource extraction,’ she says. ‘But I don’t see it happening. It’s all about gain.’
Instead, Swenson believes that change will only happen if the main consumers – in the West and China – alter lifestyle habits. ‘Maybe we can educate ourselves to consume less,’ she suggests. ‘If the carbon market to tax carbon dioxide emissions takes off, it may have an effect on the movement of natural resources. If we have to pay a real price to move goods from China to the West, then maybe it would slow down the global extraction industry.’
Matters may of course resolve themselves, as George Soros, the global financier with the Midas touch, has predicted. ‘The ultimate asset bubble is gold,’ he said in an interview last year. ‘It may go higher, but it’s certainly not safe, and it’s not going to last forever.’
Depleted uranium
During the Soviet era, more than 800 million tonnes of uranium mining and milling wastes were disposed of in tailings dumps in Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, a legacy of the Soviet Union’s nuclear industry. Uranium mined from Kyrgyzstan made the Soviet Union’s first atomic bomb.
Uranium isn’t strongly radioactive – it’s comparable with granite; the problem is that uranium minerals are associated with more radioactive elements, such as radium and radon.
In Kyrgyzstan, they were dumped unguarded near cities and upstream of the Fergana Valley, home to an estimated ten million people. Kyrgyzstan is geologically unstable and experiences about 3,000 earthquakes a year. A spokesman for the Kyrgyz Ministry of Emergency Situations said: ‘We realise there is a high risk that geological processes could create a regional ecological catastrophe, involving crumbling dumps and especially uranium tailings.’
Kyrgyzstan’s depleted uranium headache has been passed around the international community for more than two decades. A clean-up plan was initiated by the Organisation for Security and Co-operation in Europe, but the organisation became frustrated in its attempts to convince the international community of the urgent need to address the situation.
Eventually, the UN Development Programme agreed to take responsibility. Works to move tailings from some areas are due this year, funded by the World Bank.
Turning gold into lead
One of the most devastating examples of the health and social impacts of gold mining is that of Zamfara State in northern Nigeria. A discovery of gold deposits led to a two-year artisanal gold rush. Local women processed the ore at home, pulverising rocks with grain grinders, using the communal well to sift gold from the ore.
But the gold contained high levels of lead. Lead dust spread across the ground where children played, even settling in the fabric of village homes, most of which were made of mud.
According to Nigerian government officials, more than 280 children under the age of five died from lead poisoning in eight villages, with up to 3,000 more falling ill. Initially, villagers thought the children were dying from malaria; the alarm was raised only when health officials noticed that some villages had almost no children.
Last year, an international effort, including representatives from Médecins Sans Frontièrs, the World Health Organisation and the US-based Blacksmith Institute, set about remediating the area. They constructed a landfill site for contaminated soils and industrial waste, and removed highly contaminated materials from ponds.
Soil lead exposures have since dropped by 95 per cent, but this good work now risks being undone. ‘The project has completely run out of money,’ says Meredith Block, programme director for the Blacksmith Institute. ‘The international community has made it clear that it isn’t interested, so we think it’s up the Nigerian government to show some leadership.
‘We need money for earth movers and to build landfills – without it there’s not much we can do,’ she continues. ‘You need funds to continue with education about the right practices, for medical treatment and for environmental remediation.’
Prospecting in the UK
Visit a mine anywhere in the world, goes the saying, and you’ll find a Cornishman. Not in Cornwall, however; the last Cornish tin mine, South Crofty, closed in 1998.
But record prices and demand for tin may bring the industry back from beyond the grave. Last summer, a Canadian company, Celeste Copper, outlined plans for a £4million geology and engineering feasibility study at South Crofty.
‘There was a lot of tin left – it was market forces that closed South Crofty,’ says Mark Kaczmarek, who mined for 17 years and now lectures at the Camborne School of Mines. ‘If South Crofty were to reopen, it would restore a lot of pride. People of Cornwall have their own identity, and mining plays a role in that.’
South Crofty might just be the start of something bigger for Cornwall. Copper, zinc, wolfram and tungsten are also reckoned to exist in viable quantities, and other areas have higher and shallower grades than South Crofty, says Kaczmarek.
Elsewhere in the UK, the Grampian Highlands show good prospects for gold and base metals. Gold hasn’t been mined in Scotland for 500 years, but Scotgold, an Australian minerals company, calculates that Cononish near Loch Lomond and the Trossachs National Park could yield up to 30,000 ounces of gold per annum. In Northern Ireland, Dalradian Gold is test drilling for gold in the Sperrin uplands, where panning for gold is a popular tourist activity.
October 2011
As Geographical went to press, the price of gold stood at an all-time high (US$1,923 an ounce on 6 September). Meanwhile, most of the ten most valuable metals that we remove from the planet’s crust are either at or near their record prices. The rate at which these metals are being taken out of the ground is, in almost all cases, unprecedented, powered by ferocious global demand from China, Brazil and other emerging nations.
In many respects, this is good news. The resources are often in developing nations, and the combination of high demand and high prices has the potential to raise living standards for some of the planet’s most impoverished people. On the other hand, the mining industry’s track record isn’t encouraging.
For decades, it has been excoriated by environmentalists and social-welfare organisations. Mining may be a dirty job, but no mining company ever suffers a shortage of labour. Wages are generally low, and social damage and environmental pollution often outweigh benefits to local communities.
Gold, thanks to its mercurial place in the human consciousness, will always catch the eye, but the boom affects most other metals. According to Sweden-based mining analysts the Raw Materials Group, all of the world’s most valuable metals currently enjoy record production. Last year, the total gold yield was 2,500 tonnes (in 1984 it was just 1,460 tonnes), approaching its highs of the turn of the 20th century. Copper is at an historic high (16,050 tonnes, double that of 1984). The same goes for iron (1,814 million tonnes, compared with 815 million tonnes in 1984), silver (22,500 tonnes, up 176 per cent since 1984), nickel (1,525 kilotons; kt), lead (4,100kt), uranium (60 tonnes) and zinc (12,100kt). Bauxite production has been running at a high of 200 million tonnes or above for the past three years, compared with a 1984 baseline of 92 million tonnes.
The sceptical view is that these mining revenues will generally be squandered by governing elites, exacerbate corruption, or, as happened in the Democratic Republic of the Congo (DRC) and Sierra Leone, spark conflicts. This concern has reinvigorated talk of ‘the resource curse’, the view that natural resource abundance is, on balance, more of a hindrance than a driver for development.
Amazon annihilation
One of the major areas of worry is not, as you might expect, the large international corporations, or even regional ones, but small-scale, or artisanal, mining. Since 1998, artisanal mining has been responsible for 20–30 per cent of global gold production, according to Jennifer Swenson, assistant professor of geospatial analysis at Duke University’s Nicholas School of the Environment. Recent research by Swenson and colleagues, using remote sensing, has linked the record price for gold with a six-fold increase in deforestation in parts of the Peruvian Amazon.
Most of the gold mined artisanally in the Madre de Dios region comes from alluvial deposits in the channels and floodplains of Amazon tributaries. According to Swenson, mining deforestation, averaging 1,915 hectares a year since 2006, outpaces nearby settlement deforestation, as miners blast river banks and clear floodplain forests to expose potentially gold-yielding gravel.
Gold is unique, Swenson points out, because it can be mined with relatively low technology, making it accessible to unskilled workers. ‘There are bigger companies involved, but it’s really a case of poor migrants coming down from the high Andes to the lowlands. It has taken everyone off guard – this is spontaneous artisanal mining and it has got so big, so quickly. Huge areas of primary forest are being cleared spontaneously. The untouched forests have completely gone. Usually when you get deforestation in the Amazon, people settle or graze cattle, there’s still an ecosystem. But the forest has been completely annihilated. You’re left with ponds laden with mercury. I can’t see how these areas will ever recuperate.
‘It’s open season,’ she continues. ‘The area is changing so quickly, there will be lots of repercussions. There’s already child slave labour, an increase in prostitution.’
Messy issue
Artisanal gold mining also brings with it alarming side effects from the use of mercury. Small-scale gold mining is the second-largest source of mercury pollution, behind the burning of fossil fuels, and is responsible, says Swenson, for one third of all mercury released into the environment. Miners mix mercury with gold-containing ore, separating it out from the rest of the ore as the heated mercury is vapourised.
Mercury from artisanal mines travels widely, settling in sediments and moving up the food chain into fish, fish-eating wildlife and humans. According to the UN Environment Programme, ten million miners and their families in Brazil, Venezuela, India, Indonesia, Papua New Guinea and Zimbabwe suffer health problems from mercury used in artisanal mining.
Events in Madre de Dios frustrate many observers who feel passionately that artisanal mining and the metals boom can be a force for good. ‘Artisanal mining is very tricky, it’s a source of tension between the mining industry, communities and governments,’ says Jim Cust, a PhD student at the Oxford Centre for the Analysis of Resource Rich Economies. ‘There’s no easy answer. A lot of practices around artisanal mining have big questions over safety, and wider economic implications for conflict and strife. On the other hand, they can provide opportunities for bottom-up economic growth in places where options for peasant farmers are limited.’
Mitigation efforts often amount to little more than airborne patrols by under-resourced law officials or policing of porous land and water borders. ‘A paper structure for environmental-impact assessments exists, but the price of gold is so high that people just ignore it,’
says Swenson. ‘Governments are limited by resources and geography. It’s a really messy issue. If governments somehow managed to stop small-scale mining tomorrow they would be left with large migrant populations on their hands that had no means to survive.’
Bigger impacts
The sheer speed with which mining set-ups are emerging has left everyone playing catch up. In South America, Swenson has reported how professional hunters are stockpiling wild game for miners in Nouragues Natural Reserve in French Guiana, and that mining threatens national parks in seven countries across the continent. The IUCN recently reported that one in four of Africa’s World Heritage sites were threatened by commercial mining or fossil fuel projects, including Selous Game Reserve (Tanzania), and Aïr and Ténére Nature Reserve (Niger).
‘The link is the increase in gold prices, and the fact that the easy oil and gas is running out,’ says Mariam Kazam Ali of the IUCN’s World Heritage Programme. ‘The exploration stage causes damage – they put dynamite in – but the bigger impacts are secondary; people move into an area, they have to eat, they have low-paying jobs, so often they poach wildlife. It’s very difficult to keep pace. Often the manpower to do so isn’t there. Watchdogs such as us may only have a few people in an office. It’s a real worry.’
Trade-offs may offer a way out. Ali points to a proposal for a uranium mine on the perimeter of Selous National Park in Tanzania. ‘It’s worth two per cent of GDP to Tanzania, so it’s significant,’ she says.
‘You might argue that if the uranium mine proceeds, you could compensate by adding another protected area where there have been problems with development.’
But flexibility in all cases would be inappropriate, Ali warns. ‘World Heritage sites have a strong no-development policy, and it’s there for a reason,’ she says. ‘These sites are the best of the best; they cover just one per cent of the world’s surface, and they’re meant to be protected for our children’s children.’
Resource challenge
A lot is at stake, and the pressure on these World Heritage sites may just be the start of the resource challenge for Africa. A World Bank assessment, The Changing Wealth of Nations, concludes that subsoil resources are worth around US$125,000 per square kilometre in OECD nations, but just US$25,000 in sub-Saharan Africa, suggesting that the continent has so far been largely overlooked. ‘Interest in sub-Saharan Africa has, until now, been much lower than elsewhere,’ says Cust. ‘From a geological point of view, the resources in the two areas are likely to be similar, so that suggests that we will see a boom in activity in sub-Saharan Africa.’
Such activity won’t necessarily be all bad news. There’s little doubt that mining has the potential to be a force for economic good, and it would be simplistic to characterise the industry as universally detrimental to the poor global south. Diamond mining has transformed Botswana over the past 20 years from one of the world’s poorest to among Africa’s most prosperous countries. Between 1990 and 2003, poverty in Chile fell by almost half – and by 60 per cent in the key mining region of Antofagasta, according to the International Council on Mining and Metals (ICMM).
Things are rarely so straightforward, however. The ICMM, which was established in 2001 to improve sustainable-development performance in the industry, says that more than 50 countries are significantly dependent on mining. These countries are mainly developing or transition economies and are home to more than 3.5 billion people, of whom 1.5 billion live on less than US$2 per day.
The polarised view of the industry has historically hampered progress. ‘From the 1980s onwards, the environmental movement portrayed mining as the big baddie. The industry didn’t see itself as evil, it saw itself as providing resources the world needed. I suspect the answer is somewhere in-between,’ says Anthony Hodge, chairman of the ICMM, which represents 19 mining companies and 30 affiliated mining associations.
Hodge acknowledges that mining must now embrace the full life cycle of a mine project. ‘Many of the greatest problems facing the mining industry today stem from the fact that this hasn’t been done in the past. During the 1960s, the mine design process was limited to the end of operations,’ he says.
‘The worst situation is where there’s serious corruption all through the process; one party gets all the benefits, someone else gets all the costs and another all the risks, and no-one takes responsibility.’
The end of impunity?
Too often, mining has had a shocking record on safety and social rights, but optimists argue that the emergence of social-justice movements, ethically aware shareholders and consumer power mean this doesn’t have to be the case. So, is it possible that many resource-rich countries face a singular opportunity, a generational window, to escape persistent poverty and achieve economic growth?
‘There’s a big push internationally from users of metals,’ says Hodge. ‘Microsoft, Intel, computer manufacturers, the electrical industry, car makers – they increasingly demand that resources provided to them by producers, smelters, refiners, are sourced in a socially responsible fashion.’
The political oversight also has more teeth nowadays. Last year, the US Congress approved the Cardin-Lugar transparency amendment, which will require a high degree of disclosure of payments by resource-extraction companies registered in the USA with the Securities and Exchange Commission.
Corruption is being addressed, too. The Extractive Industries Transparency Initiative is a coalition of governments, companies, civil-society groups, investors and international organisations. Its aim is to strengthen governance by improving transparency and accountability by overseeing the verification and full publication of company payments and government revenues from oil-, gas- and mineral-extraction. So far, ten countries are compliant, (including the Central African Republic, Timor-Leste and Liberia); and 24 others (such as Indonesia, DRC and Kazakhstan) are candidate countries.
But, as Cust, points out, transparency alone won’t solve the problem. He’s involved in another project, the Natural Resource Charter, drawn up by a group of lawyers, economists and other experts assembled by Professor Paul Collier, director of the Centre for the Study of African Economies at the University of Oxford. Cust describes this as a ‘living document’ that will evolve in parallel with the latest best practice and global standards. ‘The intention is to cover the entire chain, from discovery, to concessions, processing, tax revenues and the spending of revenues,’ he says.
‘The aim is to help countries better harness their natural resource wealth towards poverty reduction and sustainable growth, and inform citizens about the importance of the debate, so that they can hold their governments to account,’ he continues. ‘Mining companies recognise that they can no longer operate with impunity away from their headquarters because this will come back to bite them.’
Shift in values
But then there’s China. Cynics argue that because China is driving much of the demand, its poor human rights record will mean that efforts to improve governance will come to nought.
But Hodge argues that the concerns about environment and social justice we’ve see in the West are ‘finding an expression in China’.
On a recent visit to China, Hodge says, he was surprised at the level of commitment to aspire to Western mining standards. ‘I’m not naive – plenty of Chinese mining practices leave a hell of a lot to be desired,’ he says.
‘Can they do it on their own? I doubt it, and I also doubt that any Chinese company could currently meet the ICMM’s standards.
‘But there is a big push to be part of the modern age,’ he continues. ‘Chinese companies are increasingly international, and when they work with companies in the West, they have to address the standards of the West. They also have a tremendous need for raw materials.’
Fundamentally, of course, mining companies are driven by the business, rather than the moral, arguments of ethical operations, but Hodge argues that the underlying reasoning reflects more significant societal changes. ‘If this doesn’t make business sense, then you will meet a tremendous amount of resistance, but it’s not “either/or”,’ he says. ‘It has to be both good business sense and the right thing to do. Ethical foundations and business sense go hand in hand. There has been a shift in world values over recent decades. There’s no single mechanism, but it’s vital to have support from the community. You can’t legislate for that.
Huge phenomenon
The worry is that the current unprecedented global boom risks leaving such good intentions behind. ‘The recent trend is spontaneous and rapid,’ admits Hodge. ‘I’m concerned that some people will come in, play the game and not understand what we are trying to do.’
Thanks to the price of gold – a commodity that, in physical terms of how much has ever been mined, might add up to a cube that just covers a singles tennis court – and other metals, the world is going through a truly, extraordinary and transformational period, described by Cust as ‘a super-commodity cycle’.
‘It’s a huge phenomenon and, inevitably, there will be more horror stories,’ he says. ‘Nobody can pretend that we or others can solve these problems, or even keep a lid on them. That’s naive. But the potential exists for a lot of good. Governments take these challenges seriously. Civil society, the media and citizens all have vital roles. New technologies, such as mobile phones and the internet, can be vital tools in this battle.’
Cust points to success stories, such as the USA and Canada, that have thrived on natural resources. ‘History hasn’t been kind to resource-rich countries, but to talk about a resource curse is simplistic,’ he says. ‘There’s no inherent curse – that argument suggests it’s better to leave the resource in the ground where it won’t do any harm and that somehow the world will then be a better place. That’s foolhardy. Countries have an ethical responsibility to harness the resources for their citizens.
‘The level of governance of a country where a resource has been identified can tell us a lot about which way it’s going to go in terms of prosperity or problems,’ he continues. ‘Institutions matter. You need to strengthen that governance, it’s what you make of that resource.’
Laborious process
Reining in the bad players and making sure everyone gets a fair slice of the pie will be a laborious process, admits Hodge. ‘In an ideal situation, in 20 years’ time, minerals and metals will be an industry that really knows how to listen, and not tell the world what to do,’ he says. ‘That would be an outstandingly good thing. In reality, every company has areas on which they can dramatically improve. I recognise there’s a long way to go before we get to that point.’
Swenson suggests that only a determined international effort at regulation can bring the situation under control. ‘You need some international policy to control resource extraction,’ she says. ‘But I don’t see it happening. It’s all about gain.’
Instead, Swenson believes that change will only happen if the main consumers – in the West and China – alter lifestyle habits. ‘Maybe we can educate ourselves to consume less,’ she suggests. ‘If the carbon market to tax carbon dioxide emissions takes off, it may have an effect on the movement of natural resources. If we have to pay a real price to move goods from China to the West, then maybe it would slow down the global extraction industry.’
Matters may of course resolve themselves, as George Soros, the global financier with the Midas touch, has predicted. ‘The ultimate asset bubble is gold,’ he said in an interview last year. ‘It may go higher, but it’s certainly not safe, and it’s not going to last forever.’
Depleted uranium
During the Soviet era, more than 800 million tonnes of uranium mining and milling wastes were disposed of in tailings dumps in Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, a legacy of the Soviet Union’s nuclear industry. Uranium mined from Kyrgyzstan made the Soviet Union’s first atomic bomb.
Uranium isn’t strongly radioactive – it’s comparable with granite; the problem is that uranium minerals are associated with more radioactive elements, such as radium and radon.
In Kyrgyzstan, they were dumped unguarded near cities and upstream of the Fergana Valley, home to an estimated ten million people. Kyrgyzstan is geologically unstable and experiences about 3,000 earthquakes a year. A spokesman for the Kyrgyz Ministry of Emergency Situations said: ‘We realise there is a high risk that geological processes could create a regional ecological catastrophe, involving crumbling dumps and especially uranium tailings.’
Kyrgyzstan’s depleted uranium headache has been passed around the international community for more than two decades. A clean-up plan was initiated by the Organisation for Security and Co-operation in Europe, but the organisation became frustrated in its attempts to convince the international community of the urgent need to address the situation.
Eventually, the UN Development Programme agreed to take responsibility. Works to move tailings from some areas are due this year, funded by the World Bank.
Turning gold into lead
One of the most devastating examples of the health and social impacts of gold mining is that of Zamfara State in northern Nigeria. A discovery of gold deposits led to a two-year artisanal gold rush. Local women processed the ore at home, pulverising rocks with grain grinders, using the communal well to sift gold from the ore.
But the gold contained high levels of lead. Lead dust spread across the ground where children played, even settling in the fabric of village homes, most of which were made of mud.
According to Nigerian government officials, more than 280 children under the age of five died from lead poisoning in eight villages, with up to 3,000 more falling ill. Initially, villagers thought the children were dying from malaria; the alarm was raised only when health officials noticed that some villages had almost no children.
Last year, an international effort, including representatives from Médecins Sans Frontièrs, the World Health Organisation and the US-based Blacksmith Institute, set about remediating the area. They constructed a landfill site for contaminated soils and industrial waste, and removed highly contaminated materials from ponds.
Soil lead exposures have since dropped by 95 per cent, but this good work now risks being undone. ‘The project has completely run out of money,’ says Meredith Block, programme director for the Blacksmith Institute. ‘The international community has made it clear that it isn’t interested, so we think it’s up the Nigerian government to show some leadership.
‘We need money for earth movers and to build landfills – without it there’s not much we can do,’ she continues. ‘You need funds to continue with education about the right practices, for medical treatment and for environmental remediation.’
Prospecting in the UK
Visit a mine anywhere in the world, goes the saying, and you’ll find a Cornishman. Not in Cornwall, however; the last Cornish tin mine, South Crofty, closed in 1998.
But record prices and demand for tin may bring the industry back from beyond the grave. Last summer, a Canadian company, Celeste Copper, outlined plans for a £4million geology and engineering feasibility study at South Crofty.
‘There was a lot of tin left – it was market forces that closed South Crofty,’ says Mark Kaczmarek, who mined for 17 years and now lectures at the Camborne School of Mines. ‘If South Crofty were to reopen, it would restore a lot of pride. People of Cornwall have their own identity, and mining plays a role in that.’
South Crofty might just be the start of something bigger for Cornwall. Copper, zinc, wolfram and tungsten are also reckoned to exist in viable quantities, and other areas have higher and shallower grades than South Crofty, says Kaczmarek.
Elsewhere in the UK, the Grampian Highlands show good prospects for gold and base metals. Gold hasn’t been mined in Scotland for 500 years, but Scotgold, an Australian minerals company, calculates that Cononish near Loch Lomond and the Trossachs National Park could yield up to 30,000 ounces of gold per annum. In Northern Ireland, Dalradian Gold is test drilling for gold in the Sperrin uplands, where panning for gold is a popular tourist activity.
October 2011
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