Every year, according to the World Gold Council, as much as 3000 tonnes of gold are pulled from the earth. The Council estimates that 190 400 tonnes of gold have been mined throughout modern history, with most of it (about two-thirds) extracted since the 1950s.

Despite how much has already been mined — nearly all of which exists in above-ground stores because gold is virtually indestructible and easily recyclable — demand for newly mined gold remains strong. The jewellery sector is the largest industrial user of it, consuming nearly half of all newly mined gold annually. The tech sector uses about 8% annually, but it is the finance sector and governments that take up most of the rest.

In many cultures, gold is a symbol of wealth, luxury and love, whether in the form of a wedding band, a candelabra, ingots or an iPhone. But like so much that we consume, the production process behind gold is rife with negative social, environmental and economic impacts. Far from the exception, injustice, destruction and inequity are systemic traits of this industry.

The social, environmental and economic impacts of gold mining

Research on gold mining shows that the social impacts within and connected to the industry go far beyond what have become normalized labour issues in global supply chains (e.g. low-wages, unpaid overtime, long hours, and lack of safety equipment and training). They are, rather, among the most horrific that one could imagine. Though very little labour is involved in large-scale mining operations, labour conditions within artisanal and small scale mining, in which an estimated 10‒15 million people work around the world, are incredibly dangerous and even deadly. Much of this sector is informal and, in many cases, illegal, which means that it is largely unregulated. Mine collapses and the toxic health impacts of using mercury in the mining process are common problems, as are the worst forms of child labour and sexual violence against girls and women. Some research has even found that gold mining is linked to human trafficking, and of course, it is well known that gold, as a “conflict mineral” mined in the Democratic Republic of Congo and neighbouring countries, funds armed conflict and violence. Research shows that these problems are not limited to this region.

Djoubissi gold mine, Central African Republic. Labour conditions in small scale mining are often deadly. Image credit: Reuters

Outside the labour force, violent repression of those who resist new large-scale mining operations in their communities is well-documented. In some cases, activists and community leaders have been arrested, prosecuted, beaten and even murdered. Whole communities have been pushed off their land and forced to relocate by such developments, disrupting livelihoods, ways of life, social ties and causing psycho-social harm to both adults and children, according to research conducted in Ecuador by Dr Maria Fernando Soliz. Toxic pollution of land and waterways is a direct result of gold mining, and the mining sector generally, and has a disastrous impact on ecosystems, agriculture and fishers and public health.

And, though the discourse of development is typically used by investors and governments to justify new large-scale mining operations, research shows that, due to a combination of factors including low-wages, tax incentives and subsidies, and corruption and bribery, the positive economic impact of large-scale mining on most gold mining communities is marginal at best (see research on gold mining in Colombia by Mariana Gomez Soto).

Good governance and regulation are the solution to many of these problems

Why do these problems exist? Well, as with any contemporary commodity that has its history rooted in colonialism (coffee, sugarcane, tea and chocolate are key examples), injustice and inequity are built into the very social and economic relations that structure the production and global value chains for gold. Governance within this industry, as within the mining sector as a whole and so many others, has always come from the top down and been contoured to meet the desires and interests of those who sit at the top of the value chain.

Research by SEI and many others shows that weak, ineffective, inequitable governance (or a lack of any) is a critical issue within the global mining sector (see research by Rasmus Kløcker Larsen, Toby Gardner and Claudia Strambo). The social and environmental impacts described above are evidence of the fact that governments in producing nations are failing to enforce already existing laws meant to govern this sector. The systemic nature of tax incentives and subsidies to mining companies show that governments are also failing to ensure that citizens are properly compensated for the mineral wealth held by their communities and nations.

What’s more, the research cited above shows that communities — especially indigenous ones — are largely left out of the planning process for new large-scale mining developments. And often, when they are included, their perspectives, knowledge and concerns about social, environmental and economic impacts are marginalized and discounted, so as to make their inclusion inconsequential.

All of which is to suggest that governance is the critical issue behind the systemic problems in gold mining and the greater mining sector. Research that tackles the questions of what barriers are getting in the way of the development of equitable and inclusive governance, and of strong and effective regulation, should be a priority.