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Exactly How Can Gold Be “Dirty?”
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(February 27, 2007) A public relations campaign called “No Dirty Gold” is out to help consumers avoid gold that has been party to any of the evils of humankind. Anyone with a sense of history realizes that not much aboveground gold is going to pass such a test...
The bedrock raw materials of the jewelry industry, gold and diamonds, are both compact and extremely valuable. Also, they are both prospected by individuals and also mined on an industrial scale. Because they are both forms of concentrated wealth, they often inspire the worst in people: smuggling, cupidity, cheating, and a disregard for social and environmental costs in the getting.

In this decade, jewelry marketers have made efforts to confront and deal with the ‘dark side’ of decorative minerals, mostly publicly with diamonds from Africa. Starting even before the release of the Leonardo DiCapricio film “Blood Diamond,” there has been a campaign to confront the reality of how diamonds are obtained, and whose hands they might pass through before showing up in your jeweler’s showcase.

Back in 2004, the Associated Press reported on such organized efforts:

"The jewelry industry has already started the process of guaranteeing that its raw materials came only from socially and environmentally friendly mining companies, according to Jewelers of America, an industry group."

"For several years, the group has been pushing a policy of supporting “responsible mining of minerals and metals,” said Fred Michmershuizen, director of marketing for the New York-based group."

"Jewelers of America played a leading role in reducing the sale of so-called blood diamonds that help fund wars in Angola, Sierra Leone, Congo and Liberia. Last year, 45 countries signed on to an agreement requiring every diamond to be accompanied by a certificate of origin."

Today, the concept of “dirty gold” is similarly being put forth (see NoDirtyGold.org). The argument is being made that the element gold, to be commercially acceptable, should be held to certain ethical and moral standards, including: it should have not been a trade item in a war zone or used to finance any human conflict, should be mined at no harm whatsoever to residents local to the mining operation, and should be mined in a way that has or leaves no harmful effects to the local wildlife or water sources. Pretty tough standards for a metal that is entirely fungible, malleable, and, unlike diamonds, totally uncertifiable in its essence. But the shining idea is to bring pressure to bear upon retailers, chiefly jewelers, to sell only gold items whose provenance is provably of the ‘clean’ variety.

From their press release of February 8th, 2007:

WASHINGTON, DC – This Valentine’s season, 11 jewelry retailers are announcing their support for the No Dirty Gold campaign’s Golden Rules criteria for more socially and environmentally responsible mining, bringing the total number of jewelry retailers supporting the Golden Rules up to 19. The list includes 7 of the 10 largest U.S. retailers of jewelry, and represents about 22 percent of the country’s total jewelry market. The companies added to the list this year are: Fred Meyer and Littman Jewelers, Ben Bridge Jeweler, Wal-Mart, QVC, Birks & Mayors, Commemorative Brands, Brilliant Earth, Leber Jeweler, TurningPoint, Boscov’s and Michaels Jewelers.

“It is important for us as retail jewelers to do all practically in our power to adhere to the principles of the No Dirty Gold campaign. It is the ‘right thing to do’ for our community, our customers, as well as the world environment,” said Jonathan Bridge, co-CEO of Seattle-based Ben Bridge Jeweler.

“By signing onto the Golden Rules, these jewelry retailers have burnished their reputations as industry leaders. Customers in Paris and mining-affected communities in Peru alike will take note of their support for improved mining practices,” said Payal Sampat of environmental organization EARTHWORKS and co-director of the No Dirty Gold campaign. More than 55,000 consumers worldwide have signed a pledge calling on jewelers and mining companies to provide an alternative to “dirty” gold.

The “No More Dirty Gold” campaign is patterned on the concern over diamonds from shady or undocumented sources in Africa. Starting in the 1990s, the world began to notice that much of the proceeds of diamond mining in Angola and other parts of Africa was being used to finance civil wars between nations and tribes. Diamonds, being small and easily smuggled and traded, were becoming the financial bedrock of some of the world’s bloodiest civil and ethnic conflicts.

In short, diamonds themselves were giving diamonds a bad name. There was a fear among firms from DeBeers to Zales to your corner jeweler that potential new brides would start to see through these little clear and colorless stones, and instead begin to appreciate the beauty of a well-cut piece of turquoise, fire opal , or even petrified wood to seal their vows.

The Kimberley Certification Process exists today to ensure that the diamond your jeweler shows you in fact is ‘conflict free’ and not tainted by the actions of Africa’s civil strife, child soldiers, or its very miners themselves. But the Kimberley process is not without its flaws. For one, a diamond is certified as ‘clean’ by the government of its supposed point of origin. Being that some of the most corrupt governments in the world rule many nations in Africa, this is a very small assurance. And, as always, diamonds can easily cross borders and therefore earn ‘certification’ in their new country. But for DeBeers, the Diamond Council, and both chain and local diamond merchants, image is all. Whether any organization could demonstrate any measure of lives actually saved through the Kimberley Certification Process is, of course, the unanswerable multi-billion dollar question.

But at least diamonds have the practical advantage of being ‘taggable’ and therefore somewhat traceable. For instance, diamonds from areas in Canada deemed to be conflict-free (i.e, not within sight of a hockey arena) today have serial numbers and logos of origin micro-engraved by lasers onto their girdles (the invisible ‘outer side’ of a round brilliant cut gem).

Gold, however, is readily convertible from one form to another, easily slipped across borders, and once it is refined, cannot be traced to its source. Should some countries’ gold production be labeled ‘dirty gold’ and become anathema to politically correct American jewelry-buyers, there will still be markets in Hong Kong, Calcutta, Malaysia, Dubai, and wherever gold is traded around the world, ready and willing to take on any pure gold with nary a thought to its origins.

Thus do markets work. The gasoline we put in our cars today in the US may be refined from Texas crude, but its more likely source is Hugo Chavez’ Venezuela, or some of our friends in the Middle East. We might try to ‘boycott’ a commodity from a particular location, but that just means that the same commodity will be diverted from across the world to fill the local need. Since fungible commodities flow to the market that pays the most, is there any sense in trying to pin down their geographical origin and make value judgments based thereon?

Not only is blaming an element for human sins illogical, it is also unworkable. As Dorothy Kosich at mineweb.com writes, “Thus far, however, no groups have publicly proposed a supply chain which could actually track the path of “green gold” from mine site to the retailers.”

Of course, no one except the most abject mining industry apologist would deny that gold mining is hard, dirty work that often wreaks havoc on the environment in which it is found. The environmental and social problems associated with gold mining are significant, and numerous instances of irresponsible mining practices have been documented over the past decade, many of which are cited on the website NoDirtyGold.org. But labeling gold without the proper pedigree as ‘dirty gold’ will only succeed in making a group of well-meaning but naïve consumers feel good about themselves as they purchase jewelry. This ineffectual boycott will not genuinely affect that gold’s marketability, and does little to address the problems associated with gold mining. Such issues are properly the concern of local and national governments through environmental, national resource, labor, and private property laws.

Over 125,000 tonnes of gold have been gathered, mined, worked into beautiful shapes, and fought over since the dawn of human history. Every single atom of it may potentially be ‘dirty gold.’ Your wedding band may contain atoms from the Golden Calf, or some other, perhaps less infamous, graven image. Your local jeweler, with his tasteful and well-lit displays, is likely offering you, unknowingly, traces of gold dug by enslaved captives of the ancient Greek or Roman Empires, gold from looted tombs in ancient Egypt, or gold ‘liberated’ from any number of rightful owners via the threat of violence, or cold-blooded murder itself.

Gold has been the ultimate recycled metal throughout human history, forever changing form as it changes hands. That universality has kept it flowing around the world. For instance, gold from the treasures of Peru, mined during the seventeenth century under conditions deadly to the South American natives, was sent back to Spain, melted, and spent prolifically throughout Europe for centuries – its atoms may reside today in British sovereigns, French or Swiss 20-franc coins, or even today’s brand-new Austrian Philharmonics gold bullion coins. Nor are US coins likely to be free of such taint. During the brief period of the California Gold Rush of 1849-1851, thousands of people starved, died of exposure, or were murdered outright during one of our nation’s most riotously lawless periods. The gold produced during this violent period of wealth creation resides today in old U.S. coins, in prized antique and heirloom jewelry, and in the vaults of Fort Knox.

The story of gold has always paralleled that of our species, both in its nastiness and in its brilliance. This soft, brilliant, non-reactive metal has been sought and admired by humans since the beginning of recorded history. From the “Tears of the Sun” to the root of all evil, gold has paradoxically embodied purity and covetiveness, security and strife, the beauty of art and the horror of conquest.

Today we are being advised to avoid something called ‘dirty gold.’ Yet, each year some 2500 tonnes of gold are mined, providing a decent wage for hundreds of thousands of people. Which of those miners would the ‘dirty gold’ idealists want to put out of work, simply because they are in the wrong part of the world, or digging on the wrong mountain, or living under the wrong dictator?

In short, 'No dirty gold’ may prove to be an effective marketing campaign to make American consumers feel good about choosing one group of retail jewelers over another. But on a practical level, it naively ignores how fungible commodities price, trade, and travel the globe. It is unlikely that any effort to stigmatize this element by geographical location or political boundaries will have any effect on gold markets or mining practices. -Richard Smith

 

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