Global Gold Rush: The Price of Mining Pursuits On The Water Supply – by Codi Yeager-Kozacek (Circle of Blue – June 15, 2012)

http://www.circleofblue.org/waternews/

Editor’s Note: While this posting is somewhat dated, it is definitely worth a read!

Circle of Blue, founded in 2002 and based in Traverse City, Michigan, is a non-profit affiliate of the Pacific Institute, and the premier news organization in the world covering freshwater issues

Water supplies remain key to the global boom in gold mining, driven by high demand and near-record prices.

Driven by historically high gold prices and increased interest from foreign investors, mining boomtowns are springing up all over the world and wreaking a rising toll on water resources and the environment. Many places where new mines are being opened and old ones expanded, local authorities and residents are reporting mounting evidence of severe water pollution from gold mining, which has intensified due to a nearly 50 percent per year increase in mining exploration budgets over the past two years.

In Romania, billions of Euros and thousands of jobs — a boon for an economically depressed region — are being weighed against the environmental impact of what would be Europe’s largest open-cast gold mine. In South Africa, the world’s fifth-largest gold producer, the government is struggling to deal with pollution from acid mine drainage and hundreds of tailings dams.

For Latin America, foreign investment in Peruvian mining is expected to be worth $US 50 billion over the next decade, while rivers that were once used by western Guyana’s indigenous communities for potable water are no longer fit for consumption since gold mining began in the region.

Likewise, mercury, used by individual prospectors to process gold, is spreading into the Colombian environment and exposing miners to health risks.

“Gold mining is one of the most destructive industrial activities — large open-pit gold mines generate vast quantities of waste, much of which is contaminated with cyanide and other chemicals used in separating gold from ore,” Payal Sampat, director of the No Dirty Gold campaign for Earthworks, told Circle of Blue.

The culprit is the high price for gold — $US 1,603.50 per troy ounce as of June 12 — buoyed by demand from rapidly growing Asian economies, which are pushing global markets to provide their more affluent populations with high-tech gadgets and other Western luxuries. Meanwhile, demand for technologies like smartphones, computers, and tablets, all of which use gold, is increasing globally, as vendors shipped 487.7 million smartphones to consumers in 2011, a 62.7 percent increase over 2010. Additionally, the electronics sector demanded 75.4 metric tons (166,228 pounds) of gold in the first quarter of 2012, according to the World Gold Council.

The increase in gold mining, moreover, is part of a larger trend of resource extraction and consumption, which includes everything from precious metals on the surface to oil shale deposits in the deep underground to diminishing water reserves that are used in the harvesting of both.

For instance, a revival in resource extraction is occurring in Michigan’s remote Upper Peninsula, where nickel, iron ore, and copper mines that have been closed for decades are being reopened due to a resurgence in the price of precious metals across the board. Shortages of water and energy have repeatedly delayed or stopped mining activities in South Africa, while Chile is struggling to keep up with electricity demand from the mining boom.

And with the global population expected to reach 9 billion by 2050, demand for minerals, metals, oil, coal, and natural gas will continue to encourage companies to dig deeper, in more remote regions, and more often — activities that require massive amounts of water — a resource that itself is becoming at risk under the pressures of climate change, overuse, and pollution.

What’s Driving High Gold Prices?

Gold, of course, has stirred the human spirit for millennia. It adorned kings, built empires, and lured European explorers across the Atlantic Ocean. It is no less revered today — used in an array of products, from jewelry and computers to pregnancy tests and catalytic converters in cars.

Gold prices in 2011 were 30 percent higher than in 2010, and global gold production rose from 2,560 metric tons to 2,700 metric tons (5.64 million pounds to 5.95 million pounds), according to the latest United States Geological Survey (USGS) Mineral Commodity Summary for gold. Gold prices have been steadily climbing over the past decade and reached record highs last August at close to $US 1,900 per troy ounce. Prices are now around $US 1,600 per troy ounce. The official sector is expecting gold to once again be a top-performing asset this year due to risks posed to the euro and the dollar, according to a recent poll conducted by UBS, an international banking and financial services group. The poll found that 22.5 percent of respondents predicted gold will be the “best performing asset class” between now and the end of 2012.

For the rest of this article, click here: http://www.circleofblue.org/waternews/2012/world/global-gold-rush-the-price-of-mining-pursuits-on-water-supply/

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