What Is Dirty Gold Mean ?

Post by : NGDlover
source : World Gold Council

"Dirty" gold could be a reference to gold which is not produced in an environmentally and socially responsible way.  This might include references made by pressure groups, mainly NGOs (non-governmental organisations) such as Earthworks and Oxfam in USA, who aim to promote improvements in the social and environmental aspects of gold mining (often referred to as "Sustainable Development").

World Gold Council member companies take the responsible production of gold, in line with the concepts of sustainable development, very seriously and there are many strict regulations and guidelines covering the mining of gold. Member companies have robust environmental, social and ethical standards and report on these through their annual reports.

1: Is gold mining a “dirty” industry?

Large-scale mining is a disruptive, but temporary, activity.  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. WGC members have comprehensive environmental, social and ethical standards and communicate these through their annual 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 from 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 (http://www.icmm.com/page/9992/making-mining-count-in-ghana-case-study)


2: Can I tell where gold comes from?

In 2008, 62% of the gold used in refining and manufacturing came from gold mining. The remainder came from recycling (old jewellery, bars, coins and industrial recycling, often referred to as "scrap"), which represented around 30% of gold supply, as well as  from stocks of gold bullion held by banks (including governmental central banks), representing 6% . 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 not currently possible.

Some companies are able to source limited amounts of gold from a particular mine (and therefore validate where it comes from), but this is not currently possible on a large scale.


3: How is the gold mining industry improving its sustainability record?

.The World Gold Council itself and several of its members individually are members of the International Council on Mining & Metals and support its Sustainable Development Framework which sets out principles to guide the responsible, sustainable production of gold and other metals.  WGC also supports the International Cyanide Management Code which governs the safe and responsible handling of cyanide in gold production.  In addition, WGC is a member of the Responsible Jewellery Council (RJC), which is working with the gold industry and other inputs to the jewellery industry to improve sustainable practices.