The Last Gold Rush and the Real Cost of Bling

The Last Gold Rush and the Real Cost of Bling

Like gold? Dig deep. That goes for miner and consumer alike.

It used to be that miners worked with veins that were gold and not much else. Now, however, the easy pickings are gone and big mining companies covet deposits that hold as little as 0.015 ounces of gold per ton of rock that is dug from vast open pits. Most of it is microscopic flecks.

At that rate, making a single wedding band requires at least 20 tons of gold-flecked rock, which more often than not must be dug from far underground.

And even though hi-tech mining can process such deposits profitably, the easiest-to-reach sites are either depleted or spoken for. That leaves miners scouring increasingly remote, hostile, and fragile environments, such as high up on mountaintops and deep in jungles, to find what little of the precious metal remains in the ground.

Rising price

Whether rocks with such a paucity of precious metals are worth working depends on the price of gold. Five years ago gold was about $300 an ounce and some iffy deposits were left untouched. But recently gold has doubled to $600 an ounce, transforming these ugly-duckling deposits into what mining companies hope are golden geese.

One example is the Porgera Gold Mine is high in a Papua New Guinea jungle, on unsteady ground, and in an area where in water falls in sheets during the rainy season. The Nalunaq Gold Mine, meanwhile, recently became ice-covered Greenland's first gold extraction facility.

In the Andes mountains is the proposed "Pascua-Lama" mine. If the mine were to open it could each year for 20 years yield 750,000 ounces of gold worth—at $600 an ounce—$450 million, or about $9 billion over the course of the mine's life. On top of that the company, Canada's Barrick Gold Corporation, would extract 30 million ounces of silver, and 5,000 tons of copper concentrates per year.

What's the catch? The deposit sits on the border of Chile and Argentina, 15,000 feet up in the Andes in an area that sees more that its share of earthquakes. Part of the deposit, about 5 percent, lies under three glaciers, according to Barrick Gold senior vice president of corporate communications Vincent Borg.

So move the glacier

Using the theory that one big glacier is just as good as four little ones, Barrick Gold planned to move the ice that was between them and the ore to another nearby glacier. Recently, however, the newly elected administration in Chile told Barrick Gold to leave the glaciers, and the sliver of deposit that they cover, alone.

Any potential gold mine will elicit protests from environmentalists, and this one—with its unique threat to glaciers, which contribute to the headwaters of the regional water system, its extraordinary altitude, and its susceptibility to earthquakes (which critics say could unleash a flood of deadly chemicals)—drew special attention from anti-mining activists, including a chain email petition that was widely circulated, if not, Borg says, completely accurate.

The objections of the activists fall into two broad categories: cyanide and acid mine drainage.

Cyanide concerns

Gold mines use immense amounts of cyanide, about 180 tons of sodium cyanide worldwide each year, to extract gold from ore. And despite mining company's efforts to contain the cyanide and completely neutralize the deadly poison when it's worn out, an awful lot can go wrong with the stuff. From cyanide-laden trucks crashing into rivers, to collapsing tailings dams (which are the structures that are meant to contain ground-up ore and residual cyanide), to little leaks here and there, cyanide released from mining operations has killed wildlife, contaminated drinking water supplies, and at times killed virtually all aquatic life in stretches of river as much as 250 miles long.

According to Antonia Fortt, an environmental engineer at the Santiago, Chile, office of Oceana, a Washington, DC-based environmental group, the hundreds if not thousands of trucks hauling cyanide up 15,000 feet to the Pascua-Lama mine, often through howling winds, and at times next to the rivers that are the region's main source of water present far too great a risk to the livelihoods of local farmers and other indigenous people.

Borg says, however, that the roads will be constructed meticulously and that the roads will not run parallel to rivers.

Just as troubling, says Jim Kuipers, an independent mining consultant and mining facility inspector for Kuipers and Associates LLC of Butte, Montana, is the potential at this site for acid mine drainage, highly acid water that is produced when rocks containing sulfides, with which gold is often found, are exposed to air and water. Such acidic water can poison waterways and can leach heavy metals, such as arsenic and mercury, from rocks it passes over, introducing them to waterways as well.

Under control

Borg, however, says that Barrick will control acid generation and cyanide management with state-of-the-art technologies. And, he says, the company has, at a cost of at least $60 million, decided to voluntarily meet North American standards rather than the less restrictive Chilean standards for opening, and eventually closing, the mine. The higher standards, he says, require "more reclamation work, more monitoring work in the long term, more stakeholder consultation," he said. "You incorporate comments and suggestions and concerns, and those things often cost money and time."

Environmentalists now have little recourse other than hoping that Barrick's technologies work and promises are kept. It appears as though the company will break ground later this year. But even though it is likely that the activists won't prevent the mine from opening, the international attention it has drawn means that it will be watched closely, says Jamie Kneen, Communications and Outreach Coordinator for MiningWatch Canada.

"In a lot of cases the big disasters are actually preventable, if the engineering reports had gotten the proper attention in a lot of these places then there wouldn't be a problem," Kneen said.

Scott Fields has covered mining issues for the scientific journal Environmental Health Perspectives. Over the last two decades he has written on a wide range of environmental issues and geologic topics for Environmental Health Perspectives, Earth Magazine, and other science publications.